Agenda item

[Report of the Director of Environment and Neighbourhoods. To be introduced by the Cabinet Member for Neighbourhoods.]

This report seeks the approval to award an interim highways contract, covering both planned and reactive highways works, to Marlborough Highways Limited for a period of up to 9 months and a maximum value of £4m (four million pounds) under the London Construction Programme (LCP) framework.

The Cabinet Member for Neighbourhoods introduced the report which sought approval to award an interim highways contract, covering both planned and reactive highways works, to Marlborough Highways Limited for a period of up to 9 months and a maximum value of £4m (four million pounds) under the London Construction Programme (LCP) framework;

This decision followed on from the Cabinet decision in July 2019 not to award Lot 1 (Highway Term Maintenance Contract) and the Cabinet Member outlined that the Council needed to put in place an interim contractual arrangement, to ensure it complied with the statutory requirements under the Highways Act 1980 and Traffic Management Act 2004 and maintained the programme of works as stated in the Sustainable Transport Works Plan approved by Cabinet in June 2019.

Cabinet noted that awarding an interim contract, through the LCP framework, allowed direct better control and performance management of highways maintenance works which was lacking with the previous award of contract through the LoHac agreement. This interim award would allow the Council time to undertake a review of the highways services and consider the future delivery options (i.e. in-house, via a partnership with another Borough, 3rd party contractor, hybrid etc.).This review would also inform the scope (if any) of re-procuring a future term highways contract.

In response to questions from Cllr Morris, the following information was noted:

• The current contractor Ringway Jacobs would remain in place for a transition period until December and the new contractor would start in September.

• There would be no change in the cost, due to this being an interim contract, the works for this 9 month period were up to £4m. This cost was based on the number of jobs agreed to be completed by the contractor for this period which would not have altered according to the contract arrangement.

• The minutes of the 9^th of July meeting were referred to as providing information on taking forward an interim contract rather than  long term contract.

Further to considering exempt information at item 20,

RESOLVED

To agree, pursuant to CSO 7.01 (b) (by selecting one or more contractors from a Framework) and CSO 9.07.01(d) (All contracts valued at £500,000 (five hundred thousand pounds) or more may only be awarded by Cabinet), to award an interim highways contract, covering both planned and reactive highways works, to Marlborough Highways Limited for a period of up to 9 months and a maximum value of £4m (four million pounds) under the London Construction Programme (LCP) framework.

Reason for decision

The delivery of the Highways requirement, both planned and reactive, contribute to the delivery of a number of Council priorities, as well as supporting the Council in complying with its statutory duties arising out of the Highways Act 1980 and Traffic Management Act 2004.

The current provider (Ringway Jacobs) has commenced demobilisation activity, having assumed a new provider would be place by the end of September 2019. There have been continued challenges with the current provider in delivery of the works and performance levels.

The Council needs to undertake a review of the highways service delivery options.

The Council would need to re-procure a highways term contract; however, the time taken to undertake this activity would go beyond the current arrangements with Ringway Jacobs and leave the Council exposed in relation to not being able to undertake its statutory duties or planned maintenance in accordance with the current programme of works. The LCP Framework was established in June 2019 and has a Highways Lot (5). The framework has provision for a direct award; directly awarding to Marlborough Highways offers the most expedient and practical solution ensuring the Council has no break in service provision for reactive and planned highways works. The primary reasons for selecting Marlborough Highways Limited instead of one of the other four providers are:

Marlborough were successful in securing the street lighting term contract and therefore will be mobilising their operation at the same time;

·         Any TUPE of staff will be simplified and contained within a single provider (i.e. staff will TUPE from Ringway Jacobs for street lighting and highways services).

·         Both street lighting and highways will operate out of a single site within the Borough. An alternate framework provider would either need to establish a site within the Borough or within a distance that would enable them to service the contract within contractual timescales.

·         It is extremely unlikely an alternate provider on the LCP framework would be willing to establish a site within, or nearby, the Borough for a contract with a maximum duration of 9 months.

·         Marlborough are already delivering a number of highways works within the Borough as part of previously tendered works packages.

·         The rates under LCP framework are more favourable than those under the current LoHAC contract.

Alternative option considered

Continue with current provider under the LoHAC framework – our experience of using Ringway Jacobs (RJ) over the past years has demonstrated that the provider is not delivering the level of performance required or the savings initially anticipated. Whilst continuation with RJ would appear to offer the Council a seamless way forward, there are a number of historic commercial issues yet to be resolved. Therefore, it would be prudent for the Council to carefully consider the risk, financial or otherwise, associated with an arrangement beyond the end of September.

The rates under the LCP framework are more favourable than those under the LoHAC framework and therefore presents better value to the LoHAC framework.

Conducting another full OJEU procurement or Mini Competition under an existing framework for a longer-term contract. These options could not be considered due to the time constraints and the fact that it would not be possible to establish a contract by 30^th September 2019.