Agenda item

            The Sub-Committee received a report of the Strategic Director, Environment which sought consideration of the extension of the current Highway Maintenance Term Contract with Amey LG beyond 2010, as conceived in the original tender documents.

            At its meeting of 24^th January 2005, the Executive Board Sub-Committee resolved to award the Highway Maintenance Term Contract (HMTC) for an initial period of five years to Amey Infrastructure Services Limited (now Amey LG). The report noted that the tender document had identified the option to extend the duration of the Contract by five years by agreement of the parties. This procurement strategy was identified in the Original European Journal OJEU notice and was designed to maximise value for money from the contract by offering a reasonable term over which contract set up, overhead and operational costs could be recovered.

            The HMTC had now operated for four years and a decision was now required on whether the contract was extended in accordance with the original strategy or whether a new contract was procured. Amey LG had written to us formally, confirming their desire to extend the current contract and to continue to develop the partnership with the Council. Members were advised that the HMTC was based upon the Engineering and Construction contract (ECC), one of the modern forms of contracts and took the form of a schedule of rates covering most typical highway operations, principally:

• Reactive maintenance and repair of all highway features;
• Gully emptying and drainage repairs;
• Footway and carriageway structural reconstruction; and
• The winter maintenance function

The indicative value of the contract was £1.6m per annum, although typically around £2.5m worth of work was undertaken by Amey LG each year. The HMTC was designed to ensure that the Contractor could sustain sufficient resources to deliver not only the core highway maintenance operations but also an emergency response facility 24 hours per day, 7 days a week.

                        Rates contained in the contract were reviewed and adjusted annually to allow for inflation using standardised construction price and cost indices published by the Government. This mechanism ensured that variations of prices used across the Contract term were applied fairly and reflected actual cost changes in the industry.

            The HMTC contained a number of performance indicators against which the contractor was measured on a monthly basis, as set out in the report.

                        Amey LG provided a workforce comprising approximately 25 operatives plus administrative and support staff operating from a dedicated depot located in Widnes. They were a national company with resources that could deliver all necessary labour, plant and equipment. Health and safety performance was reviewed monthly by the Contract Administrator as part of the Contract progress meeting. Amey’s performance had been excellent in terms of reportable accidents and a continual programme of training and updating of operatives skills aimed to continue this trend.

                        Members were advised that if the option to extend the current contract was not taken up, then the Council would have to find an alternative way of delivering the highway maintenance service. A number of options had been considered:

·        Collaboration with neighbouring authorities;

·        Inviting “Spot” Tenders;

·        Procuring a new Term Contract; and

·        Extension of the current Contract.

In considering the request to extend the Highway Term Maintenance Contract to 2010, it was agreed that an update report be submitted to Members.

            RESOLVED: That

(1)       the Highway Term Maintenance Contract 2005 to 2010 with Amey LG (formerly Amey Infrastructure Services Ltd.) be extended for a period of three years to 31^st March 2013 with the option to extend the contract for up to a further two-year period by agreement and subject to continuing satisfactory performance; and

(2)       an update report be submitted to the Sub-Committee.