£9m has been saved by changing the way lines are painted on roads
£9m has been saved by changing the way lines are painted on roads

Transport projects will use 'alliancing' to cut costs

Will Green is news editor of Supply Management
6 December 2017

UK transport infrastructure projects will adopt a policy of “alliancing” when dealing with suppliers to cut costs.

As part of a wider efficiency strategy, transport bodies will commit to collaborating with suppliers and making them “partners in delivery”.

A Department for Transport (DfT) report said: “We will choose alliancing, or an approach based on collaboration, as a first resort.”

The report said this meant “maximising the opportunity for clients to articulate their objectives clearly, for the supply chain to advise on technical viability and to innovate and invest in skills, innovation and capital equipment”.

The DfT said traditional tender processes contributed to increased costs.

“Traditionally transport bodies have used competitive tendering of contracts as the main, and sometimes only, commercial lever to drive efficiency. Typically contracts will be placed with a first-tier supplier, who will directly execute little or none of the work, instead subcontracting to a selection of specialist second-tier organisations who may engage third-tier suppliers and so on.

“This practice results in overheads and bid costs being duplicated at each stage of the subcontracting chain. Joint delivery models that span all tiers of the supply chain can reduce costs and remove duplication, which benefits the client and supply chain.”

The efficiency strategy includes improving the way projects are set up, challenging standards and learning from best practice and innovation. The report said £9m had been saved in the first year by using thermoplastic for road markings rather then traditional screed lining, a move which had increased output per shift and doubled the lifespan of markings.

Meanwhile, Transport for London is aiming for £4bn of savings and efficiencies, in part through a new procurement model for station stabilisation works that involves engaging directly with small, lower-tier firms to drive quality improvements and standardisation, which will reduce costs.

The report said: “We will use our spending power, procurement levers and pipeline of construction work to support the construction sector in becoming more productive. This includes encouraging modern methods of construction, innovation and sharing best practice.

“To make it easier for suppliers to work with our organisations and reduce overhead costs, we will also develop shared and consistent procurement processes including standardised design, products, processes, documentation and procedures.”

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