Hampshire County Council Environment Policy Review Committee 21 July 2003 Term Maintenance Contract Report Report of the Director of Environment

Item 6

Contact: Alan Giles, ext 7712

1. Introduction

1.1 This report gives an update to Members on the current situation regarding the present highway Term Maintenance Contract (TMC). Some historical background information is provided on how highway maintenance work was managed prior to the contract. Details are provided of the innovative aspects of the new contract and some of the current issues that affect it.

2. History of Hampshire County Council Highway Maintenance Works Contracts

Hampshire County Council's Direct Labour Organisation

2.1 Hampshire County Council's Direct Labour Organisation (DLO) carried out routine highway maintenance works on Hampshire roads for many years from the early 1900s up to their takeover by Raynesway Construction Southern Limited (RCS) in 1995. Staff numbers in the DLO probably peaked in the 1950s and then gradually declined as more and more mechanisation took place in the 1960s and 1970s. Time and motion study initiatives carried out nationally in the early 1970s started to improve DLO efficiencies and work outputs, which up until then were often notoriously poor. In addition, the introduction of Bills of Quantities in the 1980s meant that only the works done were paid for. Prior to then, work was paid for on a time and material basis, which was not a good incentive for improving efficiency.

2.2 Up to 1984 the DLO was managed by the Divisional Surveyors who acted both as highway maintenance client (ie identifying and commissioning repair works) and also as contractor (managing the workmen carrying out repairs). The new structure separated the Area Surveyors (as clients) from the DLO (contractors), the DLO being managed by a separate department of the County Council.

2.3 In the 1980s Hampshire County Council was one of the leaders in moving towards an electronic works ordering system (which has served it well for many years and is finally due to be replaced this year). This system helped reduce much of the paperwork associated with the conventional works ordering systems in use throughout the country.

Compulsory Competitive Tender Contracts 1995-2000

2.4 In the early 1990s, Government legislation required most local authority work to be competitively tendered. It was recognised that going out to competitive tender might result in the DLO no longer winning the work and much of the experience and goodwill associated with the close working relationship between the DLO and the Highways Management staff might be lost. In addition, there were numerous informal working practices which had evolved over many years of integrated client and contractor working and had never been formally listed. The new Government Compulsory Competitive Tender (CCT) legislation therefore required the production of a completely new form of contract for highway maintenance works.

2.5 Although the former County Surveyor's Department had extensive experience of contract preparation and management for one-off construction works, this was the first time that a long term (five year) maintenance contract had been needed. There was little experience nationally with this kind of contract and the whole process was totally new, both from the point of view of local authorities but also for many of the large national construction companies trying to get involved in highway maintenance works for the first time. One of the major issues at the time of the contract preparation was achieving the correct balance between the capacity of the contractor to deal with emergency works (eg winter salting and snow clearing) for the County Council against the staff and plant resources needed to deliver the normal annual maintenance needs (see also paragraph 4.3 on Winter Maintenance).

2.6 In 1995 the first CCT was won by RCS, a subsidiary of Balfour Beatty, a major construction company. Hampshire's DLO, having lost the tender, was no longer viable and the staff and plant were transferred under TUPE arrangements to RCS. The first few years saw a number of steady changes as RCS started to bring in more commercial practices into the former DLO organisation and to establish new forms of working relationships with the Area Surveyors' staff who continued in their client roles. Generally the Area Surveyors were very supportive of the changes which were considered to provide a more cost conscious and time awareness attitude by the contracting staff and hence provide a better service. During the first few years of the contract, national initiatives looking at improving the working relationships between clients and contractors were starting to influence attitudes. The County Council and RCS were keen to build on those initiatives and in 1997 signed their first Joint Working Agreement. Although not quite a full Partnership agreement, it nevertheless committed both parties to work closely together for their mutual benefit and to achieve steady improvement in the contract performance.

Compulsory Competitive Tender Contracts 2000-2002

2.7 The first CCT contract was for four years, with a one year extension, from 1995 to 2000. It was originally hoped to move to a more partnership- based contract in 2000 but the contract preparation process could not be completed within the timescales. In addition, the proposed changes to the agency arrangements with the districts meant that the next TMC would need to be for the whole of the highway network in Hampshire. This was a considerable increase in the scope of the contract and would require extensive negotiations with the district councils and their DLOs. It was therefore decided that a short (two year) contract, based on the existing first contract, should be let to give sufficient time for a larger county-wide TMC to be prepared. The two year contract was again won by RCS and effectively meant that the first contract continued for another two years up to 30 April 2002.

Present Term Maintenance Contract

2.8 One of the major features of the Highways Network Management Best Value Pathfinder Review (see item elsewhere on the agenda) was the need to try and improve the overall efficiency of highway maintenance works carried out in Hampshire. Works were carried out on about 50% of the highway network by RCS as part of the existing TMC. The remainder of the works was carried out by nine different district DLOs and private contractors elsewhere in Hampshire. This was recognised by the district highway engineers as being inefficient and the idea of a single county-wide TMC was accepted with little problem.

2.9 Preparation for the present TMC started almost immediately after the award of the 2000 contract. The removal of the existing district agency arrangements required extensive negotiations with district DLOs and a lot of background information relating to the quantities of work that would now need to be included in the new contract.

2.10 The present contract was awarded once again to RCS (for the third time). It is for a five year duration, with the option to extend for up to three extra years, dependent upon quality performance as determined by Key Performance Indicators (KPIs).

Award Criteria

2.11 The new contract was also intended to be rather more radical in content than previously and includes:

(i) A Quality Element as well as price, in the assessment process. In other words the contract would not be awarded just to the lowest tenderer but on a points basis of 60% price and 40% quality. The Quality element included factors such as:

(a) organisation of project team;

(b) experience and qualifications;

(c) availability of resources/method statements;

(d) mobilisation and handover;

(e) continuous improvement;

(f) partnering;

(g) Direct Service Organisation - partnering agreement;

(h) KPIs;

(i) sustainability;

(j) recycling, re-use and waste minimisation;

(k) quality management; and

(l) communications.

All of the above items are major contributors to the day to day running of the TMC and are subject to ongoing development.

(ii) Performance-Based Specification items. This means that for some elements of the highway maintenance works, RCS is not given routine works orders but, for example, is expected to keep the `A' road network free of potholes.

3. Scope/Capacity of Work

3.1 The most obvious differences between the present contract and previous ones is the geographical area covered, which now includes the whole of the county highway network in Hampshire, and the scale of the works, which was previously running at about £11 million per year and is now running at about £25 million per year. In the first complete year of the contract 490 large maintenance schemes were carried out and approximately 19,000 minor works completed.

3.2 Works not carried out as part of the TMC are:

(i) Motorway and Trunk Roads - these remain the responsibility of the Highways Agency and are managed by the Motorway and Trunk Roads Area 3 Commission (a partnership of Mott McDonald and Hampshire County Council). Interestingly, the main contractor for the Motorway and Trunk Roads Area 3 network is also RCS. This has enabled some benefits of scale to be achieved in the running of both the county and Area 3 contracts.

(ii) Highway works in Southampton and Portsmouth - both are unitary authorities and responsible for their own highway maintenance arrangements, although there are several areas of close cooperation between them and Hampshire County Council.

(iii) Some specialist functions - work items such as main road surface dressing, anti-skid treatment and some bridge works are not included in the TMC.

3.3 Additional items included in TMC are:

(i) All tree maintenance and rural grass cutting works - this avoids the need for Hampshire County Council client staff to deal with different contractors and is particularly useful in emergency situations.

(ii) Items requested by districts - for example items related to works in car parks, etc which the districts, with the loss of their highway DLO staff, have no other convenient means of arranging.

(iii) Capital Improvement Works - A useful feature of the contract is the ability to include many non-maintenance works, eg Local Transport Plan (LTP) highway improvements and even non-highway works such as Chandlers Ford Railway Station. Using the TMC for such works considerably eases the procurement process and avoids the time consuming tendering procedures that are normal for these kinds of works, yet still ensures an economical price.

(iv) Gully Emptying - This enables better coordination of drainage maintenance works to be all done by the same contractor. Traffic management arrangements (when gullies on busy roads are cleaned) are also helped by having the work done by the main TMC contractor.

(v) Minor Roads Surface Dressing - Incorporation of this work enables better coordination of traffic management and the replacement of markings by the main TMC contractor.

Partnering

3.4 The TMC provides for the formation of a Partnering Board, which comprises senior staff from both organisations. The Partnering Board directs the ongoing partnering initiatives aimed at enhancing TMC performance by closer working arrangements between Hampshire County Council and RCS.

3.5 Current initiatives include:

(i) Joint Business Plan - moving towards a joint approach to looking at organisational aims and targets.

(ii) Quality Assurance (QA) - looking at closer coordination of QA between the County Council and RCS, including integrated processes where applicable.

(iii) New County Council Works Order System - ensuring that any new system is designed to suit the needs of both organisations, not just the County Council.

(iv) RCS Call Centre - making maximum use of the RCS Call Centre for the mutual benefit of both organisations.

(v) Recycling - maximising recycling opportunities from highway maintenance and other works in order to reduce waste going to landfill and reduce the need for importing new aggregates and other materials into Hampshire.

(vi) Depot and Property strategy - looking at a joint strategy to maximise opportunities for efficient land use relating to the ongoing life of the TMC.

(vii) Future Requirements - looking ahead to the next TMC. What is the future of partnership working? Investigate the possibility of moving towards a formal joint venture to deliver the Highway Maintenance service in Hampshire, with the benefits of efficiency savings from the integration.

Key Performance Indicators

3.6 During the original 1995-2000 TMC, a number of KPIs were developed to enable regular monitoring of contract performance. Items covered included such things as:

(i) completion of works on time;

(ii) quality of completed works;

(iii) prompt invoicing; and

(iv) accuracy of works orders supplied by client to contractor, etc.

3.7 It can be seen that KPIs are not just applicable to work done by the contractor but also need to relate to the work done by the client (in this case the accuracy of works order information). Data is collected from information supplied by client staff, the contractor and from the Works Order IT systems, and the results are discussed at regular client/contractor meetings. Particular issues are identified and changes made to improve the situation. As might be expected in a contract of this size and complexity, there are a large number of performance indicators, both new ones and those used in previous contracts. Examples of KPIs are shown in Appendices 1a and 1b. In the first year of the contract (starting in May 2002) there were several occasions when the quality of performance by RCS staff fell below acceptable standards. There was a number of reasons for this, including inexperienced RCS operatives, insufficient resources and a lack of understanding of the new arrangements by district agency staff. The majority of these issues have now been resolved and staff, through use of the KPIs, are able to concentrate on looking to achieve steady performance improvement over the next year. A review of the performance indicators is presently being carried out to ensure that there is no overlap or duplication of data collection, and that the outcomes from the remedial actions justify the time and effort required to collect and analyse the data.

Benchmark Club Performance Indicators

3.8 A number of local authorities and their highway maintenance contractors have joined a Benchmarking Club in order to compare performance indicator information and help to disseminate best practice in the industry. The County Council and RCS were founder members of the Club, which was based on the `Rethinking Construction' initiatives supported by the Department of Trade and Industry (DTI). There are presently 28 member authorities and the Club was chaired by the County Council in 2002 and is presently chaired by RCS.

Prices

Price Comparisons

3.9 The new TMC prices were compared with those for the previous highway maintenance contracts (both DLO and private contractors) in place with Hampshire County Council and the districts at the time of contract award. There have been some concerns that individual rates for some items in the TMC may be higher than in previous contracts. Although this is true for some individual rates, the overall results show a different picture.

3.10 Comparison prices varied but on average the new TMC contract was calculated to cost approximately 2.4% less to deliver the same quantity of work compared with the alternative contracts previously in place. In the first year of the contract, works were valued at approximately £23 million.

3.11 It is important to remember that both the client and contractor are looking at the overall package of works done under the TMC and the overall cost to deliver those works. Selection of only the cheapest rates by the client staff (a process known as `cherry picking') and the award of the more expensively priced works to cheaper contractors is not possible, as it would be entirely counter-productive and against the spirit of the contract.

Contract Price Changes

3.12 Negotiated changes to tender prices are still possible within the contract and, where agreement can be reached, can result in benefits to both client and contractor in adjusting some inconsistencies in pricing which have arisen from the original tendering process.

3.13 Recent examples of these price changes relate to tree maintenance works and vehicular crossings. For tree maintenance, the original tender prices were considered to be poorly thought out and did not reflect actual costs. Rates for new planting were much too high and maintenance work was low. Although this meant a good deal for the Highway Maintenance client, the contract rates discouraged new planting work being ordered by other County Council departments and would have resulted in an overall reduction of work ordered through the contract. A re-negotiation of the rates to the mutual satisfaction of both parties has now rectified that situation.

3.14 With regard to vehicular crossings, the tender rates allowed for three categories: small, medium and large. However, this sometimes oversimplified the situation and resulted in both the customers and contractor thinking that the pricing was unfair. The rates have been renegotiated and are now based on crossing width (ie number of kerbs) and area of tarmac between the kerb and driveway, which still remains extremely simple to measure but is a fairer method of assessing the cost. Following recent advice from Chief Executive's Legal Practice, in the future the public will also be given the option to chose their own contractor if they wish.

Performance Specification

3.15 One of the innovative aspects of this contract is the introduction of a number of `Performance Specifications'. The traditional way of commissioning construction or maintenance works is for the client to decide what work needs to be done and then to instruct the contractor to do that work in accordance with standards set out in the contract. With Performance Specifications, the contractor is required to maintain certain aspects of the highway structure to an agreed standard, arranging its own inspections and deciding itself what needs to be done and when. Payment for the works is a fixed amount per year, relative to the overall length of the road network maintained and not to the maintenance works actually carried out. The client staff will carry out routine audits of the process but it is intended that with a long term maintenance contract (as is the case with the Hampshire TMC), there are sufficient incentives for the contractor to take over those responsibilities with as much reliability as the client. As in most new developments such as this, benefits do not appear immediately. Under the present arrangements, where the Performance Specification applies, the roads are being inspected both by RCS and the County Council staff, which is obviously a duplication of effort. However, in the longer term, with a build up of trust between the two parties, this duplication can be reduced and then hopefully eliminated altogether, resulting in an overall more efficient operation, where contractor's staff are both inspecting and carrying out immediate repairs when defects are identified.

3.16 Performance Specification clauses have been included for the following aspects of the TMC:

(i) `A' road routine maintenance (eg minor repairs, potholes, kerbs, etc);

(ii) `A' road sign cleaning;

(iii) `A' road road-marking maintenance;

(iv) all roads gully emptying; and

(v) winter maintenance.

3.17 Good performance in carrying out the above works will count towards the points scored in assessing the extension of the contract for the first one year period. Examples of some Performance Specification Indicators are given in Appendix 2.

3.18 It should be noted that larger maintenance works which require major structural repairs to `A' roads are not part of the Performance Specification. These are dealt with in the normal way by maintenance works being identified by the client and then specific repairs being ordered through the contractor.

Innovation

3.19 One of the aspects of this contract is the commitment by both parties to continuous improvement and innovation. Construction-related work, including highway maintenance, needs to be robust and reliable. The public expects road repairs to last many years. As a consequence, construction and maintenance techniques tend to be very conservative in nature and slow to change. It was the intention of this contract to be more open minded about new techniques and prepared to put in a degree of time, effort and money to trialling new processes, plant and materials. As a leading local authority, the County Council can become a major showcase for innovation in construction. Many of the aspects mentioned in the Award Criteria above, including use of KPIs, Performance Specification, Recycling Initiatives, etc are part of the innovation process.

3.20 Recent specific initiatives include:

(i) a major change to the way in which potholes are repaired (slightly more expensive and time consuming but expected to generate longer term savings by achieving better quality repairs); and

(ii) demonstration of mini-tarmac plants that can be transported from depot to depot and used to recycle old tarmac from road excavations.

4. Issues

Winter Maintenance

4.1 A major review of winter maintenance activities, including the salting routes, will be carried out over the summer of 2003. This will take into account expected changes to national legislation as well as local operational issues relating to the extent of the highway network salted during icy conditions.

4.2 Experience built up over many years by both County Council client staff and former County Council DLO staff now employed by RCS has ensured that the winter maintenance response of RCS under all of their contracts with the County Council has always been of a high standard. However, one important aspect of this work that needs to be understood is the very fine balance between RCS resourcing of the TMC contract for highway maintenance works and its capability to resource winter maintenance activities. It is not possible for RCS to obtain salting vehicles and trained HGV drivers at short notice. The same staff and vehicles used for the day-to-day highway maintenance activities are used to resource the winter maintenance work. This means that it is very difficult to provide for anything other than the existing salting routes unless there is a corresponding proportionate increase in the resources used for the highway maintenance activities, which in turn have to be supported by higher, sustained maintenance funding. Simply providing additional funding for winter maintenance works alone will not suffice. At present the situation is looking reasonably optimistic, with increased Government LTP funding and increased funding from the County Council. Preliminary conclusions from the Winter Maintenance Review indicate that five to six additional salt routes are likely to be desirable and that there is sufficient workload in the TMC to be able to provide the required winter maintenance resources. However, any future reductions in highway maintenance allocations may have a marked effect on the ability to sustain winter maintenance salting routes at the desired levels.

Call Centre

4.3 As part of its obligations under the Area 3 Motorway and Trunk Roads Commission contract, RCS provided a call centre based at the Area 3 Motorway and Trunk Roads office at Winnall. This call centre is manned 24 hours a day and was offered for use in the County Council TMC. This has proved to be very beneficial and use has gradually expanded to include a number of aspects, such as receiving out-of-hours highway-related emergency calls from the police, coordinating winter maintenance activities, coordinating highway emergency activities (eg flooding), accepting out-of-hours calls from public utilities on behalf of County Council client, etc. The RCS Call Centre is also being used as the main out of hours call facility by Fareham Borough Council.

4.4 As part of the partnering process, further studies are taking place to see if there are other aspects of work that the call centre can assist with to help improve efficiency and a better response to the public, particularly with respect to out-of-hours works and emergencies.

Emergencies

4.5 The new TMC arrangements, particularly the county-wide scale of operations, has provided opportunities for a highly efficient and effective emergency response facility. However, there is still a learning curve to be gone through both on the part of the contractor and client staff. Storm situations in October 2002 demonstrated a need for slightly improved coordination on the part of the contractor and more disciplined use of call centre facilities on the part of the client staff. Each emergency situation is reviewed, lessons learnt and, where necessary, changes made to procedures or to the training of staff concerned.

4.6 RCS has facilities to deal with major coastal oil pollution and forms one of the County Council's main resources for dealing with this kind of pollution.

4.7 It is important, however, to appreciate that, although RCS can provide an important level of emergency response and a considerable amount of specialised plant and staff, it cannot do everything. It does not have major recovery vehicles for dealing with overturned lorries, etc, nor does it have sealed vehicles that can dealt with contaminated or pollution spillages. These aspects of emergency work will still need to be dealt with by other specialists.

4.8 The main factor in dealing with emergencies is having someone that you can rely on at short notice. RCS has proved itself to be a loyal and reliable partner in a wide range of emergency situations.

Contract Spend

4.9 Highway maintenance expenditure under the TMC was expected to start at about £21 million per annum and rise steadily over the life of the contract. The use of the TMC for other capital construction works and highway improvements would also add to the spend on the contract. Actual expenditure during the first 11 months of the contract (1 May 2002 to 31 March 2003) was just over £23 million. It is possible that expenditure during the 12 months of 2003/04 financial year will approach £30 million. At the £30 million level, there is a 1% reduction in contract rates. Hence, it is in the interest of the County Council that, where additional capital or other maintenance works can be suitably and economically done through the TMC, this is encouraged as much as possible. This has already occurred in several cases, with renegotiations of contract rates where appropriate.

Recycling

4.10 Recycling is one of the main aspects of the TMC. Raynesway and its main resurfacing sub-contractor, Foster Yeoman, are working with the County Council to help achieve the County Council's Public Service Agreement (PSA) target on recycling, reducing landfill by 40,000 tonnes per year. Opportunities to make a major contribution to this through recycling of road excavation materials, where possible by putting them back through the tarmac producing plant, is already starting to have an impact. Excavated blacktop from highway works is being stockpiled at the main depots and then collected and taken to the Foster Yeoman asphalting plant at Micheldever for recycling.

4.11 There are also other aspects of recycling, such as the use of road gully waste, to be used as compost. This is not entirely straightforward since it requires the gully waste to be properly drained and dried (sometimes requiring additional special drainage facilities to be built at depots) and then mixed with green waste and shredded material from tree and shrub maintenance works. The Environment Agency still has concerns about pollutants in the gulley waste but the initiative is now up and running and being continuously monitored.

4.12 RCS and the County Council, together with a number of other partners, have made two bids for DTI support with regard to recycling under the `Partners in Innovation' initiative. Support, if successful, will be in the form of matched funding. The projects proposed are:

(i) Demonstration Project to Optimise Resource Usage in a Defined Geographical Area; and

(ii) Addressing Technical Barriers to Recycling and Alternative Aggregates.

4.13 It has been confirmed that the first project has been accepted as a proposal in the second round and is now going through the contract negotiation stage. Once the contract has been agreed the project will go live. Assuming all is well the project should start in July. The total cost of this project is £487,000.

4.14 Alternative funding is being sought for the second project as that was not successful in the second round. The estimated cost of this project is £390,000.

Public Service Agreement

4.15 Hampshire County Council has a PSA target relating to highway maintenance on `B', `C' and unclassified roads (no further deterioration to structural condition by the end of 2003 and 0.02% improvement in condition by the end of 2004). Achievement of the targets will be very dependent upon overall levels of highway maintenance funding. Over the next two years it will be important to identify and deal with specific areas of need within the present network. RCS is aware of the importance of meeting the County Council's PSA targets with regard to highway maintenance and will work closely with Hampshire County Council to achieve the targets.

Health and Safety Issues

4.16 Both the County Council and RCS take their health and safety responsibilities very seriously. Due to the close relationship between the design of works, their method of construction and the ultimate maintenance of the works, the County Council and RCS work closely together to ensure that health and safety issues (which include requirements under the Construction, Design and Maintenance regulations) are given a high priority. Joint health and safety training for staff of both organisations already takes place. There are financial incentives offered to RCS staff to encourage a good health and safety performance.

Quality Assurance (QA)

4.17 The work of the County Council and RCS obviously is closely integrated and it makes sense to similarly integrate the QA processes relating to those works. A major review of the Highways Network Management whole QA system is currently taking place and the opportunity has been take to involve RCS staff in that process. The joint process mapping is being investigated and further work to achieve greater integration is planned.

Computer Systems and Information Technology (IT)

4.18 The County Council was one of the pioneer authorities in introducing an electronic works order system for its highway maintenance DLO. This system has served it well for many years but is now due for replacement. The new system due to be introduced this autumn will be supplied by Exor Corporation, the major supplier for highway-related applications. RCS will be a user of the new system and it is included on the working groups involved in the process of agreeing the details of the new system.

4.19 As part of its routine gully emptying work, RCS is logging the position of the gullies, as well as the time and date of the visit, using their Global Positioning Satellite system (GPS) and passing this data to the County Council. This enables the position of gullies that have been cleaned to be easily identified on the County Council mapping systems and thus help monitor contract performance.

5. Future

Partnering

5.1 The present partnering arrangements are steadily being developed and expanded. With regard to the future, there is a view that, in order to achieve the maximum benefit from the partnering process, an even closer integration of the client and contractor organisations is desirable. This could see the formation of a joint venture partnership to deliver the highway maintenance programme of the County Council. It is interesting to note that in many ways this goes back to the days of the old Divisional Surveyors, when client staff directed the Hampshire DLO in carrying out highway maintenance works.

5.2 The main difference in the future would be that the contracting side would have the resources and commercial experience of a major national contractor behind it and there would be a much more modern approach to looking at innovation, efficiency and effectiveness than existed with the old DLO. On the client side there has been a major change in the attitude of staff over the years in understanding the vital importance of public relations and in delivering services that the public want (not just what highway engineers think are the technically correct solutions).

Performance Specifications

5.3 It is intended that as experience is built up on the use of Performance Specifications further work items will be included. For example, this can be done by widening the use of the items to include `B' and `C' roads, or by looking at new work items entirely that can be dealt with in this way (eg bridge repairs, etc). At present, just a year into the contract, both parties are still getting used to the new arrangements and no firm conclusions have been reached.

Key Performance Indicators

5.4 The principles of KPIs are simply those of good management - monitoring activities and progress and feeding back the results to obtain future improvements. KPIs have made this a more formal process, instead of the rather hit and miss procedure of the past. The main changes for the future are likely to be not so much the introduction of new or modified performance indicators, but more the cultural change to staff using them to accept that KPIs (ie the regular formal monitoring of activities, feedback and analysis to look for improvement opportunities) have to be an integral part of the day-to-day work process and not something additional. Once this cultural change starts to be achieved then it may be found that KPIs become like QA - a built-in process that is simply taken for granted.

Conclusions

5.5 The new TMC has just reached the end of its first year. It is one of the largest highway maintenance contracts in the country, even including those on the Motorway and Trunk Road network, and contains many new features that are innovative for Hampshire County Council, for contractors and for local authorities nationally.

5.6 The price of work under the new contract is on average 2.4% less than that which would have been paid under the former contracts let by the County Council and the district agents. Work quality and opportunities to improve efficiency and effectiveness are reviewed as an ongoing process as part of regular meetings between all levels of staff from both organisations. Individual issues of poor quality that occurred in the early days of the contract have been addressed and considerable improvements made.

5.7 In general, both the County Council client staff and the RCS management are pleased with the progress of the contract and look forward to a long term working future together to deliver the highway maintenance and other construction-related services in Hampshire.

Recommendation

That the Director of Environment report back to this Committee in summer 2004 with

regard to progress on the Term Maintenance Contract.

Section 100 D - Local Government Act 1972 - background papers
The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.
NB the list excludes:
1.	Published works.
2.	Documents which disclose exempt or confidential information as defined in the Act.

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