Archived decisions

Contact: Adrian Gray, ext 6892 email: [email protected]

1. Summary

1.1 The County Council has a statutory duty to maintain all highway infrastructure in a safe and effective manner. All traffic lights, signalled pedestrian crossings and other associated equipment are maintained through a contract to ensure that they operate effectively and safely for all users of these facilities with the repair of faults, replacement of equipment etc. The extension of this contract will ensure that the current high standards for the safe operation and maintenance of traffic control equipment in Hampshire are continued.

1.2 The current contract for the installation and maintenance of traffic signals and associated equipment came into force in July 2003, and brought together the earlier maintenance contract and the then separate installation contracts that were used to procure individual traffic signals, including those at pedestrian crossings. The breadth of the contract was expanded to include additional equipment, like closed circuit television and variable message signs, to provide, as far as was possible at the time, a single contract for the supply, installation and maintenance of traffic systems.

1.3 Some intelligent transport systems (ITS) that were under development at the time, such as the real-time passenger information systems, were excluded because the proposal for a county-wide system was still being developed at this time. Other ITS equipment was excluded because it was considered too specialist, eg support of the automated travel information broadcast system and the kiosks. It was also felt that including these devices might adversely affect the prices offered by contractors who would have to price a risk they would find hard to quantify.

1.4 The aim of bringing together the maintenance and installation contracts was to increase the attractiveness of the resulting contract to potential bidders, and to save staff time in preparing up to 20 individual tenders each year. The contract term was increased from five years to eight years, again to increase the attractiveness of the contract to potential bidders who could anticipate a longer tenure to off-set their initial set-up costs.

1.5 The current contract is on a partnering basis, although the works are specified in detail, with performance enforceable through a number of contractual penalties. The partnering element was included to facilitate closer working and to promote a shared responsibility for the quality of service provided to the public.

2. Details

2.1 The current contract has a facility to extend the contract annually after five years for a maximum of three additional years from July 2008 to July 2011. The extension is subject to performance and the mutual agreement of Hampshire County Council and Siemens.

2.2 Since July 2003 Siemens' performance has been continuously assessed using a number of key performance indicators. Overall, performance has met or exceeded the targets specified for performance. The partnering ethos has been successful in fostering closer working. One benefit to County Council staff has been access to free training, as well as specialist engineering support.

2.3 Siemens has indicated that it would be willing to continue with the contract, although it has expressed concerns over the impact of escalating steel prices on its profitability.

3. Targets and Outcomes

3.1 Siemens' performance has been continually monitored against a number of key performance indicators (KPIs), designed to evaluate performance in a more balanced way than would otherwise have been possible through a simple monitoring of the contract terms. The KPI assessments were initially reviewed at quarterly contract meetings, enabling a shared approach to improving performance, in line with the ethos of the partnering arrangement. The interval between meetings was subsequently increased to six months as performance was continually satisfactory.

3.2 It is intended to continue to monitor performance in the same way, but to develop the current KPIs to take advantage of new, automated monitoring available through Siemens' use of mobile data systems to record its engineers' activities. This has the potential to improve the accuracy of performance data, as well as reducing the amount of time spent manually collecting and evaluating data.

4. Standards

4.1 All works under this contract are carried out in accordance with the relevant highway standards and regulations for electrical installations.

5. Statutory Procedures and Consultation

5.1 There are no statutory procedures in extending the contract, which is a clause within the current contract.

6. Policy Considerations

6.1 The Procurement Innovation Group has been developing a future procurement strategy for highways related contracts within the Environment Department, and a report has been considered recommending that this contract remain separate from the new Term Highways Contract due to its specialist nature.

6.2 Asset Management is another initiative likely to have implications for the future maintenance of traffic systems. If the current level of service alters, there may be scope to vary the contract. At this time no further information is available on service levels. Extending the contract would give time for this to be resolved.

7. Sustainability

7.1 There may be opportunities to improve the sustainability of the maintenance and operation of equipment through the use of energy-efficient technologies, and the reuse and recycling of recovered materials. In addition, new regulations, such as the Waste Electrical and Electronic Equipment (WEEE) Directive, may introduce new requirements. The WEEE directive, which is European Law, requires UK legislation to enact it. There has been considerable uncertainty about how it will be implemented, and the current position appears to be that the Government is reviewing how best to implement it.

8. Maintenance Implications

8.1 Extending the current contract has no implications for existing maintenance arrangements. Costs currently increase annually in line with the retail price index, and through the addition of new installations, but measures are in place to minimise avoidable costs incurred through reporting spurious faults by utilising remote monitoring systems. This, along with contractual and performance monitoring, will ensure that the present efficient and cost-effective maintenance will continue.

9. Compliance in Achieving Contract Key Performance Indicator Targets

9.1 Two KPIs assess the principal works activities under the contract, time to attend and fix faults, and the availability of equipment on receipt of an order. A total of 8,900 faults have been reported over the period of the current contract, 89% of which were fixed within the specified period. A total of 97% of all ordered equipment was available on time. Other KPIs assess different aspects of the service provided by Siemens, and have generally been good or satisfactory. There are no poor performance issues.

10. Value for Money Compared with Re-Tendering

10.1 It is considered that the current price is competitive, and probably lower than would be achieved through open tender. The original tender was the cheapest in July 2003, and since then the annual price review has been based on the Retail Price Index, excluding mortgage interest. This is lower than construction-related price indices, and also ignores the escalating cost of steel, which is a major component of traffic signals installations.

11. Overall Consequences of Re-Tendering Now

11.1 Any new tender would require an advertisement in the Official Journal of the European Union, and the development of a new tender, specification and contract would involve advice from Corporate Departments.

11.2 This work would be expected to take six to nine months, and the timing of this report is to allow sufficient time for this to take place should a new contract be required.

12. Impact Assessments

12.1 A Race and Equalities Impact Assessment has been completed for the design installation, operation and maintenance of traffic signal installations. This assessment concluded that there is no unlawful discrimination in the delivery of this service.

Recommendations

1. That the Buildings, Land and Procurement Panel advises the Executive Member for Environment to approve the proposal to extend for one year the period of the current term contract for the installation and maintenance of traffic signals and associated equipment.

2. That the Executive Member for Environment approves the proposal to extend for one year the period of the current term contract for the installation and maintenance of traffic signals and associated equipment.

1154Rpt/AG