Highways Agency pulled up on contracting practices

7 January 2010

7 January 2010 | Jake Kanter

Serious doubts have been raised over the UK Highways Agency’s (HA) ability to secure value for money from its road maintenance spend.

A report by the Public Accounts Committee (PAC) today said the Department for Transport body does not have sufficient spending information and must improve commercial and contract management skills.

The group of MPs found the HA is not using data on supplier costs effectively and lacks “basic facts”, such as how much road resurfacing costs have increased. As a result the agency is spending substantially more on services in one region than another, according to the committee.

The agency also relies too heavily on the procurement process to drive savings rather than appropriately managing supplier performance and is not applying “whole life costing” to all its maintenance schemes.

Overall, however, the PAC said HA procurement is not a “bad story” and road maintenance contracts offer the potential to secure value for money.

Committee chairman Edward Leigh said: “The agency must maintain and improve the commercial skills and technical knowledge of its staff. They must be better informed and more robust in their management of contractors, not just at the procurement stage but also over the whole life of the contract.”

HA procurement director David Poole told SM last summer that the organisation was “mapping” all the vendors in its seven-tier supply chain to secure better value. He also set out plans to improve contract management by introducing a "motivating success toolkit", where vendor performance is measured and linked to their chances of winning future work.

Responding to the PAC report, HA chief executive Graham Dalton said the organisation will strengthen commercial teams and take greater action to control costs.

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