Contact: Adrian Gray, ext 6892

1. Summary

1.1 The following decision is sought:

That approval be given to award the term contract for the installation and maintenance of traffic signal and associated equipment to Siemens Traffic Controls for a period of five years from July 2003, extendable annually by additional periods of one year up to a maximum total contract period of eight years.

2. Reason

2.1 The existing traffic signal maintenance contract finishes at the end of June 2003.

3. Other Options Considered and Rejected

3.1 A 'do minimum' option was considered where maintenance and installation work would continue to be undertaken independently, with a term maintenance contract similar to the present arrangement and separate individual tenders for each traffic signal installation. Other options considered the scope for formal Public Private Partnering (PPP), and the scope for varying the equipment included in the contract.

4. Conflicts of Interest Declared by the Decision Maker or a Member or Officer consulted - None.

5. Dispensation granted by the Standards Committee - Not applicable.

6. Reason(s) for the Matter being dealt with if Urgent - Not applicable.

Approved by: Date:

Councillor K B Estlin

7. Introduction

7.1 On 2 October 2000 the former Planning and Transportation Resources Sub-Committee considered a report on the opportunities for a public/private partnership to deliver the development and maintenance of Intelligent Transport Systems (ITS) in Hampshire. Authority to investigate and develop this initiative further in association with the Chief Executive and the County Treasurer was granted. On 15 April 2002 a report to the Executive Member for Environment described the results of this investigation, and sought approval to seek expressions of interest in a partnering approach to delivering ITS services. Authority was granted to publish an advertisement in the Official Journal of the European Communities (OJEC) and the United Kingdom (UK) trade and local press. This report describes this process and the subsequent tendering process, and seeks approval to award the contract.

8. Background

8.1 The existing traffic signal maintenance contract terminates on 30 June 2003. Following the initial report to the former Planning and Transportation Resources Sub-Committee on 2 October 2000, a significant amount of work has been undertaken to determine the most appropriate arrangement for installing and maintaining traffic signal and associated equipment in Hampshire.

8.2 The study considered a number of alternative mechanisms, but concluded that, given the scale of this contract, a formal Public Private Partnership (PPP) would not be appropriate and that an informal partnership arrangement should be developed. This would provide a more flexible approach for both the County Council and the subsequent partner.

8.3 Existing maintenance contracts are in place for a number of different systems, together with separate, individual contracts for new installation work. A revised contract could amalgamate a large number of these existing maintenance contracts. The new arrangement would retain conditions of contract but would include an added value element in the form of a quality evaluation and partnering mechanism, allowing both the County Council and the private partner to look for innovation, improve service delivery and seek continuous improvement.

8.4 The study considered what services should be included, and concluded that the scope of the services should be extended to include not only maintenance but also the procurement of new ITS equipment, but exclude bespoke ITS systems like the replacements for the present STOPWATCH and Bus Departure Information systems.

8.5 The study considered the scope for assessing tenders against both quality and price, and concluded that a 20:80 split would reflect the aspirations of the County Council to deliver a quality service, while recognising the need to demonstrate the cost-effective delivery of the service. Allocating 20% of the tender assessment to the quality submission would provide a mechanism for assessing tenderers' proposals for developing partnering and ensure a high level of performance.

8.6 On the basis of the investigations undertaken, and to comply with the appropriate regulations, advertisements were placed in the OJEC and the national and local press, seeking interests in providing these services. Pre-qualification questionnaires were sent to contractors responding to the advertisements. A number of contractors who initially expressed an interest subsequently pulled out of the pre-qualification process, but those who submitted the required documents were assessed for a short-list of tenderers to whom tender documents were sent.

9. The Tender Assessment

9.1 The tenders received were evaluated against the two areas, quality and price, in the approved 20:80 ratio.

9.2 The quality evaluation assessed the tenderers' proposals for developing a partnering mechanism, together with their policies with regard to training, development and health and safety. The tenderers' procedures for monitoring and achieving key performance indicators (KPIs), together with their proposals for continuously improving performance in respect of these KPIs, were also evaluated.

9.3 The price evaluation assessed the cost of the works. An evaluation schedule of rates was produced to assess the comparative cost of maintenance works. Standard valuations were used to compare the cost of providing three typical installations, with an annual cost for new installation work derived from the anticipated annual programme.

10. Results

10.1 Siemens Traffic Controls are the leading tenderer in both the quality and price areas of the evaluation. Details of the tender evaluation results are provided in the confidential appendix to this report.

11. Financial Implications

11.1 The new contract will determine the cost of maintaining traffic control and associated equipment in Hampshire and the cost of new installation work for five to eight years. The contract will operate from July 2003 to June 2008 and is extendable annually for a further three years up to June 2011. June 2008 is the first formal contract break point, and the operation of the contract in terms of meeting the authority's desire to provide a cost-effective quality service will be reviewed prior to this date to determine whether to extend the contract beyond 2008.

11.2 The existing revenue budget makes provision for the maintenance of traffic control and associated equipment under the current contract, as well as the revenue costs associated with operating the urban traffic control (UTC) system and providing traffic and travel information. Details of the financial implications of the new contract are provided in the confidential appendix to this report.

12. Conclusions

12.1 The Siemens Traffic Controls' tender offers the best value in delivering the maintenance and new installation of traffic control and associated equipment. Siemens Traffic Controls' plans for developing partnering over the term of the contract, together with their response to the key performance indicators, is expected to produce tangible benefits to the authority, reflecting the aspirations of the County Council to deliver a quality service.

7764/ARG