16 July 2009 | Jake Kanter
The Highways Agency (HA) has revamped its procurement strategy in preparation for a £6 billion road improvement programme.
The organisation aims to secure better value from its £2 billion annual spend by "mapping" all the vendors in its seven-tier supply chain. It will analyse major contracts and the purchasing activity of preferred suppliers. It will also judge suppliers according to sustainability credentials and use better contract management.
Over the next five to 10 years the HA will maintain and improve the UK's A-roads and motorways, introducing new technology, such as electronic road signs. The purchasing strategy is aimed at helping the HA become more commercial by boosting spend visibility.
The Department for Transport's OGC procurement capability review last year said its multiple agencies - including the HA - had a "limited grip on spend". The organisation hopes better understanding of its supply chain will reduce waste, and improve visibility of potential savings.
"Value for the Highways Agency is the overlap between quality, cost and time," procurement director David Poole told SM. "We try to define it in terms of the overall [road] user experience. Extended roadworks that save money, but close the M1, would not be acceptable."
The HA will also strengthen contract management processes to improve supplier performance. This includes introducing a "motivating success toolkit", where vendor performance is measured and linked to their chances of winning future work.
On sustainability, suppliers have been told to track the sources of all major materials by 2012 and purchase a minimum of 25 per cent of goods from sustainable sources. The Agency has set other targets such as reducing materials to landfill by 50 per cent over the next three years.
"Sustainability will become a differentiator in our supply chain. We're saying [to suppliers] we don't use it as a selection criteria now, but get ready for it," explained Poole.