DRIVING IMPROVEMENTS FOR THE MANAGEMENT AND MAINTENANCE OF THE SCOTTISH TRUNK ROAD NETWORK CONTRACTOR CONSULTATION– DECEMBER 2008

ISBN 978-1-906006-40-2 (Web only)

This document is also available in PDF Format (420k)

CONTENTS

PURPOSE OF CONSULTATION
MAP OF THE SCOTTISH TRUNK ROAD NETWORK
THE CONSULTATION PROCESS
BACKGROUND INFORMATION
PART 1 – REVIEW OF CURRENT MANAGEMENT AND MAINTENANCE ARRANGEMENTS
PART 2 – POTENTIAL FUTURE DELIVERY STRATEGIES
PART 3 – INFORMATION ON EXISTING OR POSSIBLE FUTURE COLLABORATION/PARTNERING ARRANGEMENTS
PART 4 – FUTURE CONSULTATION
ANNEX A

PURPOSE OF CONSULTATION

Scotland is now moving forward to deliver integrated transport at a strategic level more effectively. In pulling together different modes, the contribution of the trunk road network is inescapable. To allow the full range of movements on which commerce and industry, communities and society depend, the Scottish trunk road network needs to be managed as efficiently and effectively as possible.

Over the years, Scotland has been at the forefront of good practice in managing its network through the deployment of techniques to assess road pavement conditions, in encouraging the development of materials best suited to the Scottish climate and conditions, and through procurement structures such as design and build contracts to deliver good value for money. Arrangements made for maintaining the road networks have also reflected changing circumstances.

The current arrangements are set in the existing third generation management and maintenance term contracts for the Scottish trunk road network, which came into effect in 2006 and 2007 and expire between March 2011 and March 2014. These contracts reflect a transition in practice over the last 12 years. It is now an appropriate time to reflect on current practice, to consult on whether the current arrangements remain the most appropriate way to continue to drive improvements in the future, to begin considering how the trunk road network in Scotland should be managed and maintained beyond expiry of the third generation contracts and to start planning any required changes.

This Driving Improvements consultation paper presents options for continuing or introducing new arrangements. It is also seeking to ensure that as many opportunities as possible for collaborative and partnership working with other parties are incorporated into future contracts.

Transport Scotland needs to take an early view on the procurement strategy and the types of contract that will succeed present arrangements. These may involve a radical progression or more modest development of the existing contracts. This consultation paper seeks to set out what Transport Scotland sees as possible future courses for the development of trunk road maintenance contracts. A number of questions are developed through the text, but any views on wider issues would also be appreciated.

By undertaking consultation at this time, alternative options, which because of their greater sophistication may require significant extra preparation, can be fully considered. Transport Scotland considers that it is only through the engagement of as many parties as possible with this consultation that the efficiency objectives for Scotland’s road network can be fully realised.

Significant levels of expertise exist within the engineering and procurement teams of individual public and private organisations. Driving Improvements is seeking access to these knowledge bases with a view to gaining professional advice on possible future service delivery strategies and potential collaboration and partnering opportunities that offer the real prospect of overall efficiencies and economies of scale for Scotland.

In 2006, John F. McClelland CBE published his Review of Public Procurement in Scotland Report & Recommendations, commonly referred to as the McClelland Report. Recommendations in the McClelland Report included the pursuit of greater collaboration and partnering by public bodies, greater sharing of knowledge by public bodies and ultimately the delivery of efficiency savings to the public purse. Transport Scotland is keen to ensure that the future management and maintenance of the Scottish trunk road network makes substantial progress towards achieving the recommendations of the McClelland Report.

MAP OF THE SCOTTISH TRUNK ROAD NETWORK

THE CONSULTATION PROCESS

Individual Contributions

Driving Improvements is seeking feedback on:

• the current management and maintenance arrangements;
• potential future delivery strategies; and
• the potential for future collaboration and partnering opportunities.

To supplement the responses to the questionnaire accompanying this consultation document, face-to-face interviews and/or workshops may be conducted.

Responding to this consultation paper

For Driving Improvements to be a success it is important that as many professional views as possible are taken into account. We are inviting written responses to this consultation paper by 20 February 2009.

Please send your response with the completed Respondent Information Form (see ‘/media/47574/hand.jpgling your response’ below) to: drivingimprovements@transportscotland.gsi.gov.uk

If you have any queries contact David Hamilton on 0141 272 7364.

We would be grateful if you would use the contractor consultation questionnnaire provided.

If there are other issues that you consider to be relevant to the development of the next generation of contracts, please do not hesitate to include your views in your response.

/media/47574/hand.jpgling your response

We need to know how you wish your response to be handled and, in particular, whether you are happy for your response to be made public. Please complete and return the Respondent Information Form which is enclosed with this consultation paper as this will ensure that we treat your response appropriately. If you ask for your response not to be published we will regard it as confidential and we will treat it accordingly.

All respondents should be aware that the Scottish Government is subject to the provisions of the Freedom of Information (Scotland) Act 2002 and would therefore have to consider any request made to it under the Act for information relating to responses made to this consultation exercise.

Next steps in the process

Where respondents have given permission for their response to be made public (see the attached Respondent Information Form), these will be made available to the public in the Scottish Government Library one month after close. We will check all responses where agreement to publish has been given for any potentially defamatory material before logging them in the library. You can make arrangements to view responses by contacting the Scottish Government Library on 0131 244 4552. Responses can be copied and sent to you, but a charge may be made for this service.

What happens next?

Following the closing date, all responses will be analysed and considered along with any other available evidence to help us reach a decision on the shape of the fourth generation term contract for the management and maintenance of the Scottish trunk road network. We aim to issue a report on this consultation process by three months after close.

Comments and complaints

If you have any comments about how this consultation exercise has been conducted, please send them to the e-mail address above.

BACKGROUND INFORMATION

Scale and role

The trunk road network comprises all motorways and some of the main A roads in Scotland. The current view of the Scottish Government is that the trunk road network should:

a. Provide the road user with a coherent and continuous system of routes which serve destinations of importance to industry, commerce, agriculture and tourism;

b. Define nationally important routes which will be developed in line with strategic national transport demands; and

c. Exclude those roads which predominately serve local needs.

The Scottish trunk road network forms approximately 6% of the total public road system by length, yet carries 37% of the total traffic volume and 62% of all heavy goods vehicles. Traffic flows can range from 1,600 vehicles per day on rural trunk roads to over 160,000 vehicles per day on the busiest stretches of motorway. The network is therefore pivotal and vital to the social and economic wellbeing of Scotland.

The Scottish trunk road network budget for 2007/08 was approximately £170 million.

Responsibility

Local Roads Authorities are responsible for all non-trunk roads in Scotland, whilst the trunk road network is the direct responsibility of the Scottish Ministers, who have statutory responsibility under the Roads (Scotland) Act 1984 for its management and maintenance. Scottish Ministers have established the national transport agency Transport Scotland to oversee their statutory responsibility.

Approximately 3,123km of the trunk road network is now directly managed and maintained through four individual term contracts. This excludes the M6 DBFO and M77 PPP contracts, which have separate management and maintenance contracts in place.

Five objectives have been identified for the Scottish trunk road network, which future Operating Company contracts will be expected to deliver:

1) Customer Service: To enable a "customer oriented" approach to be further developed in the way roads are managed and maintained.

2) Value for Money: To achieve the maximum efficiency in the use of the substantial sums of money expended on the maintenance of the network.

3) Effective Management: To encourage innovation and skilful management to maximise trunk road capacity and gain the best use of the network.

4) Flexibility: To accommodate change to the trunk road network.

5) Reliable Journey Times: To assist in the provision of journey time information to Traffic Scotland.

PART 1 – REVIEW OF CURRENT MANAGEMENT AND MAINTENANCE ARRANGEMENTS

Framework, Duties and Auditing

The current third generation of term contracts has seen the Scottish trunk road network continue to be separated into four geographical units (see page 2). Four successful bidders have each established an Operating Company to run one of the four units for five years, each extendable to seven years at the discretion of Scottish Ministers.

The existing contract documents for the third generation of term contracts can be found at
http://www.transportscotland.gov.uk/road/maintenance-and-management/3rd-generation-operating-contracts

The Operating Company term contracts are considered to benefit from operating under the ethos of a partnering culture delivering a spirit of openness and trust. Benefits considered to result from the contracts are: integrated delivery teams which eliminate duplication of effort; optimisation of risk allocation and management; and measurement of performance and continuous improvement against auditable key indicators.

The Operating Companies deliver a complete management and engineering service, providing the day-to-day maintenance tasks, winter treatment including provision of all storage and equipment requirements. They undertake projects valued individually up to £250,000 "as of right" for the renewal and improvement of the fabric of infrastructure and arrange competitions for larger works under discrete contracts whilst supervising the winning contractors.

The Operating Companies work under a rigorous self assessment quality assurance regime and are audited for contractual compliance. Auditing is undertaken on behalf of Transport Scotland by the Performance Audit Group (PAG). PAG also inspects and monitors the financial, technical and performance aspects of the Operating Companies, check payment requests from the Operating Companies and carry out inter-Unit comparisons and value for money investigations at the request of Transport Scotland.

Payment for services is based on a combination of lump sum fixed price items where the nature and extent of the work can be reasonably quantified, and repayment against quoted rates for those areas of work that have to be re-measured. Winter maintenance is essentially undertaken on a lump sum basis, but the payments are factored on the basis of the Meteorological Office Open Road Index (MOORI) using a specifically derived formula.

Innovation in the supply chain up to delivery of defined service levels often provides contractors and suppliers with opportunities to offer better value for money. Specifications have traditionally given a preferred design solution to define how a service is to be delivered or an item is to be constructed. This method provides little incentive for suppliers to explore options for alternatives which satisfy the employer’s ultimate performance requirements but may also add value to the product. Transport Scotland therefore wishes to explore the opportunities to introduce performance specifications to the supply chain over as wide a spectrum of management and maintenance of the network as possible.

PART 2 – POTENTIAL FUTURE DELIVERY STRATEGIES

Three possible long-term strategies for future service delivery have been identified, taking consideration of the McClelland Report. It is recognised that Driving Improvements may conclude with a hybrid strategy, or indeed an entirely different strategy, being identified as most desirable.

Other options have not been identified here but alternatives to those described would be welcomed from respondents to this consultation document.

Strategy 1 – Developed Operating Company Contracts

This strategy would seek to continue with the principles employed for the third generation term contracts whilst taking into account the experiences learned and also seeking to establish greater partnership working between the new Operating Companies and Local Roads Authorities.

Strategy 2 – Developed Operating Company Contracts (including Collaboration Framework Contracts)

This strategy would, similarly to Strategy 1, seek develop the Operating Company Contract but in addition it would make contractual provision for participating Local Roads Authorities to procure services through it.

Strategy 3 – Maintain, Finance and Operate Contracts

Under this type of contract, the service provider would fully take over the management and maintenance of the trunk road network within a Unit, maintain the network to a pre-determined standard and return the network at the end of the contract in a pre-determined condition. The service provider would have real ownership of the network for the duration of the contract and might receive payments purely in terms of continuing availability and traffic use, and incur liabilities in relation to levels of service, road safety and quality of contract compliance.

PART 3 – INFORMATION ON EXISTING OR POSSIBLE FUTURE COLLABORATION/PARTNERING ARRANGEMENTS

Benchmarking

"In any environment, understanding an activity’s performance and results compared to those of other undertakings is not only interesting, it provides the opportunity to recognise success or otherwise relative to peer operations. It also provides the stimulus for positive action and also potentially information which through additional analysis and understanding can drive improvement through the spread of best practice. In the private sector although companies do rely on benchmarking internal efficiency and external results there is often, for obvious reasons, a reluctance to share best practice with outsiders, particularly competitors. This inhibitor should not exist in the public sector."

McClelland Report 2006

Co-ordination

The existing third generation contracts make provision for liaison between organisations for the co-ordination of operations.

Collective purchasing

The McClelland Report states that substantial savings should be possible through the collective buying power of public bodies.

Economies of scale

The McClelland Report states that substantial savings could be made possible through economies of scale with respect to service delivery.

PART 4 – FUTURE CONSULTATION

Future consultation

ANNEX A

List of Consultees
Amey
Bear Scotland
Civil Engineering Contractors Association (CECA) (Scotland) and members
Highways Term Maintenance Association (HTMA) and members
Scotland Transerv