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West Sussex County Council

Highways Delivery Procurement– Outline Business

Case

Prepared by Joe Dowling and Anthony Lindsell

November 2016

of 47 Outline Business Case Final 28.11.16 Confidential & Commercially Sensitive

Revision Schedule

Rev Date Details Prepared by

Reviewed by

Endorsed by

1.0 20.10.16 Project Director Review

A.LINDSELL J.DOWLING

2.0 25.10.16 Core team Review

A.LINDSELL CORE TEAM



4.0 01.11.16 Senior Management Team Review

A.LINDSELL SMT CORE TEAM







8.0 15.11.16 Project Board Review

A.LINDSELL PROJECT BOARD

SMT

9.0 17.11.16 Project Manager Review

A.LINDSELL Y.KONG

10.0 28.11.16 Project Manager Final Review

A.LINDSELL Y.KONG PROJECT BOARD


Contents 1. Executive Summary ......................................................................................................................... 4

2. Introduction and Background........................................................................................................ 10

2.1 Introduction ................................................................................................................................ 10

2.2 Procurement Timetable .............................................................................................................. 10

2.3 Procurement Governance ........................................................................................................... 11

2.4 Aim of the Outline Business Case ............................................................................................... 12

2.5 Assessment Methodology ........................................................................................................... 12

2.6 Current Delivery Model ............................................................................................................... 14

2.7 Current Scope of Services ........................................................................................................... 14

3. WSCC Strategic Objectives and Influences ................................................................................... 16

4. Key Drivers for Change .................................................................................................................. 18

4.1 Procurement, Contracting, Standardisation ............................................................................... 18

4.2 Collaboration and Shared Services ............................................................................................. 18

4.3 Asset Management ..................................................................................................................... 18

4.4 Customer Satisfaction ................................................................................................................. 18

4.5 Benchmarking and Performance Improvement ......................................................................... 18

4.6 VFM, Affordability, Finance......................................................................................................... 18

4.7 Governance and Contract Management .................................................................................... 19

4.8 Incentives .................................................................................................................................... 19

5. Delivery Model Options Selection................................................................................................. 20

5.1 Options models ........................................................................................................................... 20

5.2 HMEP Procurement Route Choices Toolkit................................................................................. 21

5.3 WSCC HMEP Toolkit Outcome October 2016 ............................................................................. 22

5.4 Market Consultation – Soft market outcomes............................................................................ 22

5.5 Suitability, Feasibility and Acceptability of delivery models ....................................................... 24

6. Recommended Delivery Models for Full Business Case ............................................................... 27

6.1 Single Provider ............................................................................................................................. 27

6.2 Multiple Providers ....................................................................................................................... 29

6.3 Teckal ........................................................................................................................................... 31

7. Next Steps ...................................................................................................................................... 33

8. Appendices ..................................................................................................................................... 34


1. Executive Summary

1.1 Introduction

The provision of the current Highways Maintenance contract comes to an end on the 30th

June 2018. A new procurement is being undertaken to ensure services are in place from July

2018. The cost of this re-procurement has been considered and deemed necessary to achieve

the West Sussex County Council (WSCC) future objectives. The delivery model selection

process incorporated various activities and inputs and used the industry standard Highways

Maintenance Efficiency Programme Procurement Route Choices Toolkit as supporting

guidance of the suitability of the delivery model options for WSCC.

1.2 Procurement Timeline

1.3 Procurement Governance

A governance structure for this procurement was developed to ensure the right level of

transparency and input was in place throughout the procurement process across all levels.

Cabinet

Task and Finish group (Members)

Project Board

Project Team

Working groups

1.4 Aims of the Outline Business Case (OBC)

This document forms the qualitative assessment of the delivery model options for WSCC

Highways Services. The OBC has been developed with reference to each model’s potential to

support WSCC’s key objectives and drivers. The OBC filters the delivery model options from 8

models to 3 preferred models to be considered further in the Full Business Case. The OBC also

Phase 1 - Outline Business Case (OBC) – December 2016

Phase 2 - Full Business Case (FBC) – March 2017

Phase 3 - Delivering Procurement Strategy:

Issue Official Journal of the European Union document (OJEU) – April

2017

Contract Documents – June 2017

Pre-Qualification Questionnaire (PQQ)/Invitation to Tender (ITT)

combined – September 2017

Negotiation phase – November 2017

Final tender – January 2018

Contract award – March 2018

Contract start – July 2018


provides a rationale and justification for the rejected delivery models. The OBC will support

the key decision report for re-procurement to be made by Cabinet.

1.5 Assessment Methodology

In development of this OBC, WSCC consulted with Members, Officers and the industry through

market testing and independent procurement experts Collaborative Working Infrastructure

(UK) Ltd (CWI) who have been engaged to support this procurement. Information through

various activities was collated and analysed to provide an assessment of each model’s

potential to help achieve the objectives and key drivers for change that have been identified.

1.5.1 HMEP Procurement Route Choices Toolkit

This toolkit is industry recognised and was designed specifically for Highway authorities to

support decision making on delivery models.

1.5.2 Facilitated Workshops

A series of workshops/discussion groups were held to discuss and debate the various

requirements of the future delivery model along with the advantages and disadvantages of

the existing delivery model and the current contract.

1.5.3 Market consultation

A soft market testing day was run to gauge the views of the industry on what is attractive to

contractors in this new procurement and the current state of the market.

1.5.4 Peer review

A Peer review was commissioned by WSCC. The Peer review developed an understanding of

the priority settings and context for WSCC and identified the strengths and areas for

consideration of:

Planning and Performance

Enablers

Delivery

1.5.5 Site visits

Site visits are planned as part of the Full Business Case to undertake comparison of the

preferred delivery model options against our authority models.

1.6 WSCC Strategic Objectives and Influences

WSCC’s strategic objectives outlined in the Future West Sussex Plan 2015-19 are:

Giving children the best start in life

Championing the local economy

Independent for longer in later life


It is important that the chosen model should maximise and not impede the achievement of these

objectives. There are also a number of key influences for WSCC on the choice of procurement model

namely:

Value for money

Supporting Social Value, the West Sussex economy and local enterprise

Reduction in funding and realisation of savings

Sustainability

1.7 Key Drivers for Change

In consultation with WSCC Officers through the various activities undertaken to date the

following drivers for change have emerged:

1.7.1 Procurement, Contracting, Standardisation

Need for flexibility to adapt to changes.

WSCC could have more input into sub-contractor contracts and support local SMEs.

1.7.2 Collaboration and Shared Services

Opportunity to explore collaborative opportunities with neighbouring authorities

including Parish and District councils that can be exploited in the new contract.

1.7.3 Asset Management

Require a model to build on existing improvements in Asset Management.

Need an efficient system to capture and update Asset Data.

1.7.4 Customer Satisfaction

WSCC value communication with their customers.

WSCC need to enhance customer feedback – Love West Sussex app.

1.7.5 Benchmarking and Performance Improvement

WSCC need a delivery model that allows for a contract that is set up to further improve savings and efficiencies and improve the processes and mechanisms.

The chosen delivery model must allow for the revision of performance targets to the “vital few” indicators of performance.

1.7.6 VFM, Affordability, Finance

Require a suitable model which allows for a new contract that can include banded

rates for pricing.

WSCC need a delivery model, contract and sufficient client resources to enable them

to ensure all Tier 2 suppliers use Open Book Cost Management (OBCM).

Ensure the new delivery model allows for increased cost transparency and cost

certainty in the new contract.

1.7.6 Governance and Contract Management

In selection of the delivery model, WSCC need to acknowledge the constraints on

recruiting and retaining the suitable client resource capacity and capability required

to administer the elements of each model.


1.7.7 Incentives

A Continuous Improvement mechanism should be incorporated into the delivery

model selection. The selected delivery model should suit a more effective

incentivisation mechanism that delivers further efficiency over the duration of the

contract.

1.8 HMEP Procurement Route Choices Toolkit and Outcome

From all the information gathered from the activities and inputs in the OBC methodology, the

HMEP Procurement Route Choices Toolkit was completed with the Senior Management team to

further support the identification of the 3 best suited delivery models for WSCC.

HMEP Procurement Route Choices Toolkit – WSCC Delivery Models – Evaluated Options

delivery model scoring (top three):

Single Provider - 144

Multiple Providers - 128

Teckal - 128

1.9 Market Consultation

A soft market testing event was held with interested suppliers who were invited to one to one

interviews. The key areas of discussion related to the objectives of this OBC were:

Current market conditions

Scope of the contract

Contract duration period

Experience of Highways Maintenance Efficiency Programme

Contract specifics

There was a consensus gained from suppliers that a single provider delivery model would attract

most of the major players in the market.

1.10 Suitability, Feasibility and Acceptability

A qualitative high level assessment was also undertaken with the WSCC management team to

assess the suitability, feasibility and acceptability of all delivery model options. The following

factors were considered:

WSCC strategic objectives for this procurement

Procurement timescale

Affordability

WSCC resources, experience and expertise

Political acceptability


In summary, only the Single Provider or Multiple Providers models were acceptable across all

categories of consideration. Teckal has some drawbacks but was considered the third most

suitable model.

1.11 Recommended Delivery Models for Full Business Case

The following 3 options of Single provider (plus option 1b Piggy-back), Multiple Providers and

Teckal have been selected as most suitable for WSCC to be considered in the Full Business

Case:

Option 1 - Single Provider

This option suits the current WSCC procurement timeline. Also as the current delivery model

is a Single Provider this suits the current WSCC delivery structure and resource capability to

deliver the requirements of this model. This option provides a single strategic partner over a

long-term contract. This also maximises the opportunity to deliver an integrated service,

brand and consistent approach. One of the disadvantages of the Single Provider model is

that there is a risk of the relationship between provider and client team becoming too

comfortable and the most significant negative aspect of this option is that WSCC will incur

fee on fee costs from Tier 1 to Tier 2 contractors.

Option 1b – “Piggy-back” neighbouring authority’s procurement (considered further in FBC)

Option 2 – Multiple Providers

This model had some attractive elements such as it offers WSCC direct control and

collaboration. WSCC would also benefit significantly from a major reduction in fee on fee

costs across this option. This model would also provide WSCC the opportunity to positively

influence the local economy and local SMEs. WSCC through tendering directly to market for

multiple providers potentially would have more competitive options.

However, there are also significantly higher costs of systems, resources and management at

multiple interfaces through this delivery option. There are also further costs of procuring

Multiple Providers. There are obvious complexities and resource requirements in developing

and setting up the contract management facets of the Multiple Providers option with the

integration and alignment of systems and software a critical requirement that will cost time

and money and require specialist expertise. The Multiple Providers model also removes the

possibility of delivering an integrated service and a consistent brand and loses the

opportunity for a holistic approach to innovation although individual innovation is obviously

still a possibility through the individual providers.

Option 3 - Teckal (Wholly owned company)

The primary benefit of the Teckal option is that WSCC would be exempt from the OJEU

procurement process. Additionally, the Teckal option is structured to provide an investment

mechanism for the contractor partner.

All staff could TUPE over to the Teckal company quite simply. However, there is an issue

over the complexities that relate to pensions such as where do the pensions sit and who


holds the liability, WSCC or the Teckal company? Further TUPE considerations such as what

happens at the end of the Teckal company, would also yield further potential complications.

Moreover, the significant legal and political approvals that will be required will be time

consuming and complex. There is also the risk to WSCC of having to manage the entire,

potential deficit in funding.

Models ruled out

Framework – Timescale, management costs, re-procurement costs

Joint Venture – Timescale, potential conflict of interest, liability

In-House/In-House Top Up – Investment costs, risk, potential resource gap

Private Financing – Not currently available


2. Introduction and Objectives

2.1 Introduction

The provision of the current Highways Maintenance contract comes to an end on the 30th June 2018

having been extended for 2 years past the 5-year contract let to Balfour Beatty Living Places (BBLP)

which commenced in July 2011. A new procurement is being undertaken to ensure services are in

place from July 2018. This has provided West Sussex County Council (WSCC) with the opportunity

to undertake a review of the whole, current service delivery. The cost of this re-procurement has

been considered and deemed necessary to achieve the West Sussex County Council (WSCC) future

objectives.

The annual value of the current contract has typically been between £25-£50m per annum. The last

three years has been at the higher spend between £34 - £50m per annum. This has been mainly

due to the “Better Roads” programme which has seen significant capital funding to enable

improvements to the network in the last two years. However, this funding and the programme

came to an end in April 2016. Therefore, the levels of funding have dropped to the original contract

expectation of £25 million going forward for the next two years. However, it is expected that the

Highways budget will be supplemented by other initiatives in the future.

The delivery model selection process incorporated various activities and inputs and used the

industry standard Highways Maintenance Efficiency Programme Procurement Route Choices

Toolkit as supporting guidance of the suitability of the delivery model options for WSCC. The

Highways Maintenance Efficiency Programme (HMEP) is a sector-led transformation programme to

maximise returns from highways investment and deliver efficiencies in highway maintenance

services.

This Outline Business Case (OBC) will form part of a key decision report for the approval of re-

procurement in December 2016.

2.2 Procurement Timetable (planned completion dates)

Phase 1 - Outline Business Case (OBC) – December 2016

Phase 2 - Full Business Case (FBC) – March 2017

Phase 3 - Delivering Procurement Strategy:

Issue Official Journal of the European Union document (OJEU) –

April 2017

Contract Documents – June 2017

Pre-Qualification Questionnaire (PQQ)/Invitation to Tender (ITT)

combined – September 2017

Negotiation phase – November 2017

Final tender – January 2018

Contract award – March 2018

Contract start – July 2018


2.3 Procurement Governance 2016-2018

A governance structure for this procurement was developed to ensure the right level of

transparency and input throughout the process across all levels.

*Figure 1

2.3.1 Project Board

The Project Board provide strategic guidance and direction for the re-procurement. They

oversee the progress of the project team and take corrective action/decisions where

necessary to ensure key milestones are achieved.

2.3.2 Project Team

The Project Team co-ordinate and manage the delivery of the project. It is also responsible

for ensuring the new contract delivers further efficiencies and maximises value for money.

2.3.3 Working Groups

These groups focus on a number of activity streams such as operational works, commercial

processes, IT etc. They review lessons learned and identify desirable improvements for the

current contract.

2.3.4 Task and Finish Group

This is a cross-party Members group established to consider the evidence, issues, and

options for the future contract, including the review of current arrangements. This group

will provide recommendations to the Cabinet Member for Highways and Transport.

*See Appendix A Governance groups - Terms of Reference


2.3.5 Cabinet Member for Highways and Transport

The Cabinet Member for Highways and Transport as part of the key decision report on re-

procurement will consider the recommendations of this OBC.

2.4 Aim of the Outline Business Case (OBC)

This document forms the qualitative assessment of the delivery model options for WSCC Highways

Services. The OBC has been developed with reference to each model’s potential to support WSCC’s

key objectives and drivers. The OBC filters the delivery model options from 8 models to the 3

preferred models to be considered further in the Full Business Case (FBC).

In summary, this document:

Outlines the methodology applied in appropriate models.

Confirms the strategic objectives to be supported by the future Highways delivery.

Identifies the key drivers for change.

Sets out an assessment of the delivery model options.

Funnels the delivery models to the 3 most suitable options to be developed further in the

FBC.

The FBC will refine in further detail the 3 options selected in this document down to one single

preferred delivery model option for WSCC.

2.5 Assessment Methodology

In development of this OBC, WSCC consulted with Members, Officers and the industry through market testing and independent procurement experts Collaborative Working Infrastructure (UK) Ltd (CWI) who have been engaged to support this procurement. CWI has advised over 40 local authorities in highways and other aspects of procurement over the last thirteen years. Senior Officers from across the Council were engaged over a range of activities to provide supporting information and feedback based upon their knowledge of the existing delivery model and service as well as their experiences of other major projects and procurements. The information gathered from these sources was collated and analysed to provide an assessment of each model’s potential to achieve the objectives and key drivers for change that have been identified. The Outline Business Case has been developed from the following inputs:

Structured interviews to define the strategic objectives and drivers for change for

the new procurement.

Review of the current contract.

Best practice review of the current service delivery.

Lessons learned from the current contract.

Feasibility, Suitability and Acceptability assessment of delivery model options.


Strength, Weaknesses, Opportunities and Threats Analysis of the current contract.

*See Appendix B Summary of OBC inputs

Based on the information collated above, a structured review of the delivery model options was

undertaken. This review assessed the potency of each of the models to achieve WSCC’s objectives

and drivers for change.

2.5.1 HMEP Procurement Route Choices Toolkit

This toolkit is industry recognised and was designed specifically for Highway authorities to

support decision making on delivery models.

Procuring via the wrong delivery model can be expensive and lead to poor partnerships

in service delivery. The Procurement Route Choices Toolkit was designed to overcome this

problem. It uses best practice to identify and inform the procurement and delivery strategy

and choices available, based on WSCC’s inputs and constraints. It has been used within this

assessment process to provide guidance in selecting the most suitable models.

2.5.2 Facilitated Workshops

A series of workshops/discussion groups were held with Officers, facilitated by CWI, to

discuss and debate the various requirements of this future delivery model along with the

advantages and disadvantages of the existing delivery model and current contract.

2.5.3 Market consultation

A soft market testing day was run on October 19th to gauge the views of the industry on

the most attractive elements to providers for the new procurement and the current state

of the market. The day comprised a series of facilitated feedback sessions with providers

and Officers during which representatives from providers were asked to debate key

questions regarding the procurement.

*See Appendix C List of attendees at market testing event

2.5.4 Peer review – summary of outcomes

A Peer review was commissioned by WSCC on 25th to 27th October 2016. The Peer review

developed an understanding of the priority settings and context for WSCC and identified

the strengths and areas for consideration of:

Planning and Performance

Enablers

Delivery

The key points for consideration related to this OBC are:

Current contractual relationship is effective.

There is a good relationship with sub-contractors.

High spend currently through local SMEs.

Lack of Asset Management Policy, Strategy and Plan.


Systems and processes are not aligned.

Are staff resources matched to needs?

Contract management expertise needs to be improved.

Have opportunities around other models e.g. Teckal/Multiple Provider been

dismissed too quickly?

Short timescale for procurement could result in wrong decision.

The overall key messages were:

There is a resilient and committed staff group that delivers.

Change is inevitable it needs to be for a clear purpose and delivered quickly.

There needs to be an Asset Management plan to move forward and Members need

to set priorities from it.

The re-procurement is pivotal; it can’t be rushed.

Appetite for risk.

New management is a positive.

2.5.5 Site visits - Feedback and Lessons Learned from Other Authorities

Site visits are planned as part of the Full Business Case to undertake a comparison of the

preferred delivery model options against our authority models.

2.6 Current Delivery Model

WSCC in delivery of Highways Maintenance currently have multiple providers across the wider

service delivery e.g. design, traffic signals, streetlighting. However, for comparison with the generic

models in the HMEP Toolkit, the current model is classified as a Single Provider as the majority of

the maintenance services are provided by one provider.

2.7 Scope of Services for this review

The current Highways service is delivered via a mixture of a traditional Term Maintenance contract

and several frameworks to provide Design and Capital works. The scope of services considered in

this OBC are:

Reactive Response

Winter Service

Gully Cleansing

Chamber Cleansing

Routine Maintenance Structures

Tree Work

Hedge Trimming

Weed Spraying

Grass cutting Schemes/Programmes


Carriageway Resurfacing

Carriageway Reconstruction

Carriageway Thin Surfacing

Carriageway Patching

Carriageway Surface Dressing

Footway Reconstruction

Footway Thin Coat

Drainage

Signs

Road Marking

Structures

Highways Improvement Schemes

Safety Fencing

Cycle Ways

Accident Prevention Schemes

Optional additional works may include but not be limited to:

Capital Works

Asset Management

Traffic Signals Maintenance

Public Rights of Way

One Stop Shop – Call Centre

Highways Inspections

Condition Surveys

Highways and Transport Professional Services


3. WSCC Strategic Objectives and Influences

WSCC’s strategic objectives outlined in the Future West Sussex Plan 2015-19 are:

Giving children the best start in life

Championing the local economy

Independent for longer in later life

It is important that the chosen model should maximise and not impede the achievement of these

objectives. There are also a number of key influences for WSCC on the choice of procurement model

namely:

3.1.1 Value for money

WSCC need to deliver value for money.

3.1.2 Supporting Social Value, the West Sussex economy and local enterprise

WSCC are duty bound under the Social Value Act (in the commission of public services) to

think about how they can also secure wider social, economic and environmental benefits.

The procurement choice needs to be aligned to the objectives of championing of the local

economy, improving infrastructure that businesses and local communities need and to

support economic growth.

3.1.3 Reduction in funding and realisation of savings

There is a requirement to identify significant savings, of approximately £2m per annum, in

the first two years of the new contract against revenue targets. Consequently, it is critical

to assess the effectiveness of the possible procurement models in terms of their ability to

deliver cash releasing savings against current expenditure. This will be tested in the FBC

comparisons.

3.1.4 Sustainability

WSCC defines sustainability as “ensuring that the actions and decisions taken today

guarantee a better quality of life for everyone now and for generations to come”. It is based

on the principle that the quality of peoples’ lives is affected by a combination of economic,

social and environmental factors.

The key priorities for Highways delivery are to:

Embed sustainability within the business and deliver added social value.

Lead the way in valuing the place of West Sussex.

Realise efficiency savings in the short, medium and longer term.

Work with and influence others to maximise the benefits for West Sussex.

Drive the objective in the West Sussex Transport Plan of improving the quality of life

for people through:

Promoting economic growth

Tackling climate change


Providing access to services

Employment & housing

Improving safety, security & health


4. Key Drivers for Change

In consultation with WSCC Officers the following drivers for change have emerged:

4.1 Procurement, Contracting, Standardisation

Requirement for flexibility to adapt to changes throughout the contract and to test

performance.

Need for WSCC to have input into sub-contractor contracts and support local SMEs in the

supply chain. Consideration needs to be given to the pricing options used for sub-

contractors compared to the primary contractor’s pricing option.

4.2 Collaboration and Shared Services

There is a need to explore collaborative opportunities with neighbouring authorities

including Parish and District councils that can be exploited in the new contract. These

opportunities would deliver joint savings and efficiencies.

4.3 Asset Management

Need to support the improvements in Asset Management that are currently being

undertaken and a strong consideration in the selection of the future delivery model and

contract.

WSCC need an efficient system to capture and update Asset data to support an Asset

Management approach in the future.

4.4 Customer Satisfaction

WSCC value communication with their customers.

WSCC need to enhance customer feedback – Love West Sussex app.

4.5 Benchmarking and Performance Improvement

WSCC need a delivery model that allows for a contract that is set up to further improve

savings and efficiencies and improve the processes and mechanisms that are in place to

monitor and manage performance effectively against targets throughout the duration of

the contract.

The chosen delivery model must allow for the revision of performance targets to the “vital

few” indicators of performance. Currently they are too numerous and are not fully driving

performance or savings targets.

4.6 VFM, Affordability, Finance

Requires a suitable model which allows in the new contract to use banded rates for

pricing.

WSCC need a delivery model, contract and sufficient client resources to enable them to

drive forward the use of Open Book Cost Management with Tier 2 suppliers.


Ensure the new delivery model allows for improved cost transparency and cost certainty

in the new contract.

4.7 Governance and Contract Management

In selection of the delivery model, WSCC need to acknowledge the constraints on

recruiting and retaining the suitable client resource capacity and capability required to

administer the elements of each model.

4.8 Incentives

The selected delivery model should facilitate Continuous Improvement and suit a more effective incentivisation mechanism that delivers further efficiency over the duration of the contract.


5. Delivery Model Options Selection

5.1 Delivery models

*Figure 2

Private Funding - A Private Finance Initiative (PFI) which is long in duration, typically 25

years, and passes asset and service responsibility to the service provider. Note, it is

acknowledged that although the PFI mechanism is not currently available for use it may be

in the future as PF2.

Single Provider - most services transferred to single private sector partner. Client retains

some elements of service such as Asset management and performance management.

Framework - assumes more than one provider with similar skill set to allow mini

competitions to be held for work packages.

Joint Venture - exhibits attributes of an incorporated joint venture (i.e. it is a separate legal

entity). Very small client function retained in the local authority for contract management

purposes.

Multiple Providers - authority procures individual services from different providers such as

surface dressing, gully emptying, street lighting, etc. Client retains some elements of service

such as Asset management and performance management etc.

In-House + top up - simple top-up arrangement to fill gaps/weaknesses in the client team.

The amount of highway maintenance function remaining with the client depends on how

much top up is involved, be it single or multiple providers.

Teckal - a company wholly owned by the Council, which subject to certain conditions is

exempt from European Union procurement regulations.

In-House - assumes very limited and ad-hoc input from the private sector. Client provides

majority of services including “blue collar”.


5.2 HMEP Procurement Route Choice Toolkit

The HMEP Procurement Route Choices Toolkit was completed with the Senior Management team to

further support the identification of the 3 most suitable delivery models.

This toolkit acts as a guide to map out the various considerations and alternatives when procuring

Highways Maintenance services. Through a facilitated workshop and a 2nd review to sense check the

original outcomes, WSCC Officers were taken on a process to assess influences, explore options and then

evaluate options before gaining political acceptability and determining the market appetite prior to

procuring a new contract.

*Figure 3

* See Appendix D HMEP Route Procurement Process diagram (enlarged)

5.2.1 Influences Assessment

The “influences” are those issues that currently affect highway maintenance services such as

low levels of customer satisfaction or constrained budgets. This section describes the core

influences to give background on the issues that need to be taken into account when identifying

the need for change from the current service delivery model.

5.2.2 Need for Change

For each of the 7 core influences, the group has reviewed how their experience of the current

service delivery aligns with current thinking and the WSCC future objectives and drivers for

change.

5.2.3 Explore Options *see Appendix E HMEP Toolkit Outcome

Having identified the need for change in relation to the current service delivery model the group

then explored the options that are available and most likely to suit WSCC requirements.


5.2.4 Evaluate Options

This section enabled an evaluation of the options selected through the Toolkit against a number

of criteria that will deliver the WSCC needs for future service delivery. These were based on the

strategic objectives and the identified drivers for change.

5.2.5 Political Acceptability and Market Appetite

Political acceptability and market appetite have been gauged through the Task and Finish group

meetings and market testing activities. During the Full Business Case phase these areas will be

looked at in further detail.

5.3 HMEP Procurement Route Choices Toolkit outcomes

HMEP Procurement Route Choices Toolkit – WSCC Delivery Models – Evaluated Options October 2016.

*Figure 4

020406080

100120140160

Single Provider 144

Teckal 128

Mutliple Providers 128

In house Top-up 120

In house 112

Framework - ruled out

Joint venture - ruled out

Private Funding - ruled out

HMEP Procurement Route Choices Toolkit - WSCC October 2016 Evaluated Options


5.4 Market Consultation

A Prior Information Notice (PIN) was issued to suppliers for a soft market testing event held on the 19th

October. Interested suppliers were invited to one to one interviews. The event was well attended with

over 10 major players in the sector.

*See Appendix C Contractor attendees list

There was a consensus gained from suppliers that a single provider delivery model would attract most

of the major players in the market. A summary of the conclusions drawn from this event were:

5.4.1 Current Market Conditions

Contractors felt that “the culture, collaboration and the proposed contract for the new

procurement was attractive to the market”.

5.4.2 Scope of the contract

There was consensus that the scope should be left open to allow for future flexibility. Many

contractors were aware of the need for flexibility to make changes within the contract.

In order to drive efficiencies, the scope could be broadened.

5.4.3 Contract duration period

7yrs + 3yr extension was considered the right duration. Less than 5 years was considered

unattractive and would deliver a poor return on investment on fleet and equipment.

A 6 month transition plan that incorporates a minimum 3 month mobilisation period is the

preferred option.

“The preferred approach is competitive negotiation if it’s not too lengthy”.

Shorter timescale in tender process is more attractive as it reduces costs however timeline

depends on scope

5.4.4 Experience of Highways Efficiency Maintenance Programme

Most contractors have had a positive view on the Highway Maintenance Efficiency

Programme based contracts.

5.4.5 Contract specific needs

“Incentives which work”.

“Flexibility to evolve contract”.

“Joining of services / IT etc. can provide efficiencies”.

All endorsed “a collaborative approach to deliver efficiencies”.


5.5 Suitability, Feasibility and Acceptability of delivery models

A qualitative high level assessment was also undertaken with the WSCC management team to assess

the suitability, feasibility and acceptability of all delivery model options. The following factors areas

were considered:

Strategic objectives.

Available timescale for procurement.

Affordability.

WSCC resources, experience and capability.

Political acceptability.

The below table summarises the consensus viewpoint:

*Figure 5 – See Appendix F for enlarged chart

The review of suitability, feasibility and acceptability found the following models most suited to WSCC’s

needs:

Single Provider

Multiple Providers

Teckal (this option has some identified potential barriers in time and people as detailed

above but was deemed the 3rd most acceptable option)


In this assessment, the following models were ruled out:

Framework

The 4-year maximum framework length is not acceptable for WSCC as it limits stability,

budget certainty and reduces the likelihood of savings being delivered. Best practice

supports the development of long-term contracts that maximise the opportunity to develop

a collaborative, integrated delivery and therefore the limited timescale of frameworks are

not in line with these principles.

Considerable costs and resource time will be incurred in the management and co-ordination

of the framework. The costs of re-procurement are another negative aspect as re-

procurement will need to start after just 2 years of the contract start. Frameworks also don’t

allow for significant investment in technology and innovation due to the limited time frame.

Achieving collaborative opportunities are also likely to be difficult across multiple providers

on the framework.

In summary, the view is that this model will require additional, scarce Client resources with

the limited likelihood of providing the savings and efficiencies needed.

Joint-Venture (JV)

There are obviously more complexities involved in developing and implementing this

delivery model compared to some other options. The time required to procure and setup a

JV is too long for the WSCC procurement timetable.

The Public/ Private structure of a JV introduces conflicts of interests for its public Officers.

There is also a mismatch of strategic fit in that while a JV company is set up primarily as a

profit making enterprise, WSCC’s prime objectives are to provide customer satisfaction and

efficient service delivery. WSCC as a shareholder is looking for profit but WSCC delivery is

looking for performance.

Also, there is the view that there is not the appetite for WSCC to carry the potential liability

for financial losses of a Joint Venture company.

Finally, for all these reasons this option has been ruled out.

In-House and In-House Top up

The In-House option requires significant investment in plant, equipment and “blue collar”

resources, to be able to effectively implement and deliver this option.

This model transfers the employment risk for the “blue collar” team to WSCC. In the current

economic climate with reducing budgets this is a significant liability. This investment and

transfer of risk is contrary to WSCC’s budget saving expectations. In addition, WSCC would

have to manage all the delivery risk and would lose the commercial expertise and innovation

available from the private sector. For these primary reasons this option has been ruled out.


A resource shortage would be a likely outcome of selecting this delivery model as potentially

only “blue collar” employees are likely to TUPE to the new In-House Direct Labour

Organisation (DLO). This would leave a major gap in resources and expertise in key skilled

roles and management positions.

The In-House Top up option has also been ruled out for the same reasons as above.

Private financing

Private financing is not an option currently available.


6. Recommended Delivery Models for Full Business Case

This section summarises the output from various reviews undertaken during this Outline Business Case stage and details the reasoning for the selection of the three options for consideration in the Full Business Case. 6.1 Option 1 - Single Provider

Although the current contract is the same generic delivery model this is not a “do nothing” option

moving forward.

This option satisfies the identified procurement objectives for WSCC’s next procurement. As the

current contract is a Single Provider for the existing scope of works, therefore the current WSCC

delivery structure and resource capability is suitable and sufficient to deliver the requirements of

this model.

The Single Provider option over a 7+ year period + extensions will attract sufficient interest from

the market to ensure there are bids from major providers. This option allows the long-term

development of a strategic, collaborative relationship with the contractor to offer a consistent

brand identity that is known and understood by the public. The emphasis on efficiency will allow

WSCC to focus on costs and maximising social value impact at a local level, whilst taking full

advantage of emerging industry approaches and collaborative working.

The most significant, negative aspect of the Single Provider option is that WSCC will continue to

incur significant fee on fee costs from the provider. The Single Provider option also limits

competition compared to some other delivery models. There is also a risk that the relationship

between provider and client team can become too comfortable and accordingly the contract is

not managed effectively and planned value for money is not achieved.

*Figure 6

Single Private Sector

Provider

WSCC Commissioning

& Delivery Client

Tier 2 Suppliers

Tier 2 Suppliers

Tier 2 Suppliers


Advantages for WSCC

WSCC would have a single strategic partner over a long-term contract to deliver the contract collaboratively.

The existing WSCC delivery structure, resources and capabilities are mainly already in place to manage this option.

WSCC will benefit from private sector efficiencies.

Maximises the ability to deliver an integrated service, brand and consistent approach to service delivery for WSCC.

It will be easier with a Single Provider to build confidence and understanding quickly and implement an effective performance regime and establish effective payment mechanisms.

This model can be procured in the available timescale.

This option will not increase pressure on WSCC Client resources.

Makes delivery of social value easier compared to other models.

Disadvantages for WSCC

Fee on fee costs from provider

Relationship can become “comfortable” without appropriate performance management.

Possibility of being stuck with the wrong provider for the duration of the contract

No on-going competition between providers. Option 1b – “Piggy-back” This option, which will be further considered in the Full Business Case, is for WSCC to “piggy back” on a neighbouring authority’s procurement. Specific consideration will be given to the alignment with WSCC’s objectives after further investigation of neighbouring procurement models and contractual arrangements along with any TUPE and union specific elements.


6.2 Option 2 – Multiple Providers

This model has some attractive elements such as it offers WSCC direct control and collaboration

with what essentially becomes multiple “Tier 2” providers which in other delivery options would be

sub-contractors to the Tier 1 contractor. WSCC would also benefit significantly from a major

reduction in fee on fee costs across this option with only minimal costs incurred compared to the

Single Provider option. This model would also provide WSCC the opportunity to positively influence

the local economy and local SMEs. WSCC through tendering directly to market for multiple

providers prospectively would have more competitive options.

However, there are also significantly higher costs of systems, resources and management at

multiple interfaces through this delivery option. There are further costs of procuring multiple

providers as opposed to other delivery options. There are obvious complexities and resource

requirements in developing and setting up the contract management facets of the Multiple

Providers option with the integration and alignment of systems and software a critical requirement

that will cost time and money and require specialist expertise. Ultimately the rationale for or against

the Multiple Providers model is made or broken over a detailed understanding of client overhead

and complexities vs. potential savings and ease of implementation. The Multiple Providers model

also makes it more difficult to deliver an integrated service and a consistent brand and loses the

opportunity for a holistic approach to innovation although individual innovation is obviously still a

possibility through the individual providers.

*Figure 8


Advantages for WSCC

Benefits from private sector efficiencies.

Creates more client control for WSCC.

More opportunities for local SMEs.

Access to specialist contractors.

Reduced fee on fee costs. Disadvantages

Increased complexities in administration of multiple providers leading to increased costs and time.

More client contract management resources required, especially compared to single provider option.

Difficulty to develop a consistent brand.

Lack of consistency in systems, processing, reporting functions.


6.3 Option 3 - Teckal (Wholly owned company)

The primary benefit of the Teckal option is that WSCC would be exempt from the OJEU procurement

process. Additionally, the Teckal option is structured to provide an investment mechanism for the

contractor partner.

All staff could TUPE over to the Teckal company quite simply. However, there is an issue over the

complexities that relate to pensions such as where do the pensions sit and who holds the liability,

WSCC or the Teckal company? Further TUPE considerations such as what happens at the end of the

Teckal company, would also yield further potential complications. Moreover, the significant legal

and political approvals that will be required will be time consuming and complex. There is also a

potential risk to WSCC of having to manage the entire deficit in funding.

*Figure 7

Advantages for WSCC

Exempt from obligation of OJEU procurement route.

Positively influences the local economy and provides more work to WSCC local contractors as suppliers to the Teckal company.

The Teckal company could be made available to other public and private sector clients and sell to neighbouring authorities, hence expanding workload and potential profitability for WSCC.

The profits that are returned to WSCC in the form of dividend or rebate would allow the council to reinvest in other services.

WSCC would be able to add further services at a future point in time, provided the company is structured to take advantage of the Teckal exemption.


Disadvantages for WSCC

WSCC are exposed to any losses that the Teckal company may make.

WSCC does not have the level of capability or expertise to implement or manage a Teckal arrangement. The level of expert support required in areas such as legal and HR matters is higher than other delivery models.

The time required for establishment of this delivery option along with legal and political planning and authority to develop and formalise a Teckal arrangements will not fit into the existing WSCC procurement timeline. Any extension to the existing timeline would inhibit the delivery of the expected savings targets.

Complexities of pensions, TUPE, etc. to manage.

The Teckal company is subject to corporation tax.

Need to in-source and set up a Direct Labour Organisation (DLO).

Less able to deal with peaks and troughs in demand. It is recommended that these four options are now explored in more detail during the Full Business Case.


7. Next Steps

Cabinet decision for re-procurement of new contract (includes supporting

OBC) – 6th December 2016

Full Business Case development – December 2016 to March 2017

Full Business Case completion – March 2017


8. Appendices

Appendix A Governance groups terms of reference

Executive Task and Finish Group – Term of Reference

Background

The Highways Maintenance contract with Balfour Beatty Living Places (BBLP) commenced in July

2011. It is currently in its 5th year, ending on 1st July 2016 with an option to extend for a further 2

years.

A decision to extend was taken in April 2014 under delegated authority by the Strategic Director for

Environment. Formal legal documents were signed on the 18th January 2016. The contract expires

on the 30th June 2018, with no further extension option available under current arrangements with

BBLP without some element of risk.

The Cabinet Member for Highways and Transport wishes to appoint a XXXX Task and Finish Group

(TFG) to XXXX…

Aim

The Cabinet Member intends to take a key decision in early 2017 (January/February) to commence

the procurement process for a highways contract which will go live on the 1stJuly 2018. The new

contract will meet the Council’s objectives for the future, align to the pressures on the service and

will consider market options and contract management. The TFG will be supported by the project

manager (PM) for the procurement of the new contract and external consultants where appropriate.

The TFG will provide timely advice/recommendations to the Cabinet Member prior to the start of

the procurement process for the new contract (scope and timing will be mutually agreed at the

initial pre-meeting between the group and PM/senior manager/s). This will ensure that the new

contract will be ‘fit’ for the future, in that it:

Aligns with Future West Sussex priorities taking into account the needs of

communities

Addresses the organisational and service challenges

Is delivered quickly and efficiently once approved; and

Can be delivered sustainably

Purpose

The TFG will:

Consider the evidence, issues, and options for a future contract, including the review of

current arrangements/service and identifying needs with users/stakeholders to inform the

recommendations on the way forward for the new contract.

Provide timely recommendations to the Cabinet Member to inform the drafting of the

Outline and Full Business Case for the procurement of the new highways contract.

In carrying out its deliberations, work alongside other Officer working groups to review the

lessons learnt from the current BBLP contract.


In considering the appropriate model for service delivery, TFG will be guided by Officers,

where appropriate, with the necessary organisational competencies required to operate the

new service delivery model.

Timescale

The TFG will meet a minimum twice between early July and September. It will present its findings

and recommendations to the Cabinet Member by the end of October 2016.

Membership

The TFG will consist of up to seven Members of the County Council, be cross-party if possible, with

the final Membership decided by the Cabinet Member for Highways and Transport.

Notes/Terminology

Outlined Business Case (OBC) – This outlines the indicative rationale behind the project. It will set

out what is it that project is trying to deliver, why and what options will be consider as part of the

deliberations. An indicative timetable for delivery will be considered along with possible benefits

being realised resulting from successful delivery of the project.

Full Business Case (FBC) – This will set out the finalised option being taken forward for delivery. The

FBC will set out the benefits resulting from delivery, resources required to deliver and a project

delivery programme to monitor progress and the governance required.


Strategic Project Board - Terms of Reference

Main Purpose of Group:

The Board will provide strategic guidance and direction for the re-procurement of the HTMC. Where

necessary, provide the leadership to ensure the County Council is able to secure a committed service

provider for the delivery of the highways service that meets the aspiration and requirement of the

County Council starting from July 2018. The Board will receive progress reports from the Project

Team and review progress against milestones and direct any mitigation where necessary.

Chairman: Executive Director of Resident’s Services

Group Secretary: Project Manager for the procurement of the new HTMC

Members of the group:

Cabinet Member for Highways and Transport, Executive Director of Resident Services (Project

Sponsor), Director of Highways & Transportation (Project Owner), Director of Finance (S 151 Officer).

Timescale: Date of formation (July 2016)

Timescale: Date of review/completion (June 2018)

Meeting Frequency: Quarterly

Reporting to: WSCC Cabinet

Aims and Objectives:

Provide strategic leadership for the re-procurement of the HTMC 2018

Ensures the Outline Business Case (OBC) and the Full Business Case (FBC) are approved by

Cabinet of County council

Ensures the Outline Business Case (OBC) and the Full Business Case (FBC) are approved

Scrutiny Committee of the County Council.

The award of a new contract in March 2018 for the delivery of the highways maintenance

service.

Oversee the progress of the project team and take corrective action/decisions where

necessary to ensure key milestones are achieved. The key milestones are as follow:

o Outline Business Case – November 2016 (Cabinet Member decision)

o Full Business Case – February 2017 (Cabinet Member decision)

o Official Journal of European Union Notice (start of procurement process) – April2017

o Preferred Bidder/Award Contract - March 2018

o Contract Go Live - 1st July 2018


o A contract with Service Provider that is future proof for the duration of its term (i.e.

changing service standards).

Expected Outputs:

A committed service provider for the highways service delivering efficient and effective

services to the residents of West Sussex.

A contract that aligns with Future West Sussex priorities taking into account the needs of

communities.

A contract that drive further innovations and efficiency throughout delivery chain and

delivers Value for Money for West Sussex


Project Team – Terms of Reference

Main Purpose of Group:

To receive progress reports from working groups and the Project Manager/deputy PM and provide

guidance and direction to the re-procurement of the HTMC. Where necessary, provide the

leadership required to ensure the County Council is able to secure a committed service provider for

the delivery of the highways service that meets the aspiration and requirement of the County

Council starting from July 2018.

Chairman: Director of Highways and Transportation

Group Secretary: Project Manager for the procurement of the new HTMC/Project Support Officer

Members of the group:

Director of Highways & Transportation (Project Owner), Project Manager (Procurement of new

HTMC), Contract lead, Commercial lead, Legal lead, Procurement lead, Finance lead, Audit lead,

Deputy Project Manager, CWI’s Project Lead.

Timescale: Date of formation (July 2016)

Timescale: Date of review/completion (June 2018)

Meeting Frequency: Monthly

Reporting to: Project Board - Quarterly

Aims and Objectives:

Provide leadership for the re-procurement of the HTMC 2018

Responsible for the co-ordination and delivery of the re-procurement project.

The group will ensure the Outline Business Case (OBC) and the Full Business Case (FBC) are

prepared and submitted for WSCC corporate governance approval in a timely manner.

Key project milestones are achieved and delivered in accordance project programme.

Gateway Reviews are carried out to build confidence in the delivery timetable

Incorporate feedback/outputs from other key stakeholders i.e. Senior Management Team of

Highways and Transportation, Members Task and Finish Group and Contract Working

Groups.

Review/Monitor the budget allocated for the re-procurement of the new contract.

Ensure that the new Contract delivers further efficiencies and drive innovations and

maximise Value for Money (VfM) for West Sussex.

Expected Outputs:

Award of new Highways Termed Maintenance Contract starting 1st July 2018 following a

minimum 3 months’ mobilisation/de-mobilising process.


Appendix B Summary of OBC inputs

WSCC TMC Procurement – OBC input summary

Inputs to date:

Written contract review

Contract review workshop

Best practice review of current service delivery

Structured interviews

Lessons learned from current contract

Feasibility and capability assessment

HMEP Procurement Route Choices Toolkit workshop

Strengths, Weaknesses, Opportunities and Threats Analysis

Other workshops

7-10 Year contract

Flexibility

More flexibility is needed in the contract to adapt to changes throughout the timeline but also to

test performance improvements or set targets year on year (5% savings Y1, 10% Y2, 20% Y3 onwards

etc.)

Savings/KPIs

Initial savings were delivered but ultimately limited savings have been delivered since then. The new

contract must be set up differently to deliver savings and efficiencies and ensure mechanisms are in

place to monitor performance and against targets.

Savings targets and KPIs/SPIs need to be revised – currently too heavy, too many, too clunky (130+)

and are not driving performance or savings. Savings/Efficiency driven KPIs need to be determined

and implemented and drive performance.

Incentives Centralised system of pain and gain is not working, need to concentrate on work. Pain and Gain share does not happen until the end of the year which is too late WSCC could incorporate system of scaled efficiencies (efficiency pain and gain). If there were measurable efficiencies for suppliers, then WSCC could offer reduction in rates. Contract Mgt

Currently the level of contract management is not sufficient to administer this contract so either

resource and capability needs to be considered in the terms and processes of the new contract or

the right resources need to be aligned to the new contract.

A lot of what is in the contract currently WSCC do not follow through on such as audits, quality

checks, cost controls….and the contractor knows this.


Delivery Structure

The current structure is not ideally suited to collaboration which only some co-location and small

pockets of collaborative working. Especially where efficiencies can be achieved through

collaboration the new contract should consider a better mechanism for collaborative activities and

monitoring and measuring the benefits.

Collaboration

Also, collaboration with other authorities including parish and district councils should be built into

the new contract. Further opportunities to collaborate with neighbouring authorities needs to be

exploited. Resource availability and capability is an issue once again in implementing, managing and

quantifying the benefits of collaboration as WSCC do not currently have the resources and expertise

in order to exploit all the benefits of collaboration at this point in time.

Supply chain

WSCC have a desire to have input into sub-contractor contracts and to maintain local SMEs in the

supply chain. Currently WSCC are procuring some services on Option C – Target cost with BBLP who

in turn procure sub-contractors on an Option A – Lump sum which undermines the benefits of the

original target costing.

Need to ensure the supply chain are on back-to-back contracts to reflect contract engagement with

WSCC.

Pricing/cost management

There is a lack of resource to oversee commercial activities. There is a need for a proper dedicated client contract team structure to manage the contract. This contracts and commercial team would be a collaborative, co-located team responsible for:

Managing all commercial aspects of the contract

Final pricing

Accounts

CEQs The activity schedule is not accurate enough and leads to cost issues and discussions with the contractor. Activity Schedule needs to be based on bands. Activity Schedules need to be accurate. Pricing mechanism needs to change. Need banded rates for pricing. A lot of issues would be

resolved.

Tier 2 suppliers do use Open Book Cost Management (OBCM) but there is no resource to check this. Issue of timing of budgets, budgets not fully agreed until March, costing done before then. Current lump sums are good value through BBLP.

Cost transparency and cost certainty are currently sub-par.


BB schemes supply chain are awarded on lump sum prices (Option A) for Highways improvements

schemes. WSCC contract with BB is Target Price (Option C). Therefore, the contract incentives are

not consistent.

*Target costing used for over 50k, Option A used for under 50k (Option C too labour intensive for

smaller works). Lack of training for Option C.

*Pricing option is based on each service? What suits the service.

Contract inflation should be included in the baseline budget

Asset Mgt

Asset mgt does not really feature at all in the current contract and does not support a WLC

approach. There could be lots of learning and best practice from other authorities that would benefit

WSCC. An efficient system to capture and update Asset Data is an important facet of the new

contract that should drive an Asset Mgt approach in the future. In light of DfT Incentive funding, this

should form a priority in the new contract where WSCC are well ahead of the requirements stated.

IT Systems

The IT systems need to be aligned to the requirements of the contract. Currently there are some

failings. There is a need to ensure contractor uses a shared system and a shared database.

Contractor needs a direct link to SAP

Need to consider using a contract management system

Contractor needs to be on the network or using a SharePoint type approach

Conject and Confirm (The two primary IT interfaces currently utilised) – there is a disconnect. We

can do without Conject and manage this in a different way. Conject is not user friendly. We would

need to add CE information to Confirm. The Confirm dashboard is now working well for us.

Service Drivers and Efficiencies

Obvious opportunities for efficiency gain:

Change intervention level on safety plus works – 40mm >50mm Reduce Urban grass cuts 7>5 (£1.5m spend) Empty gullies on risk basis Bring road condition surveys into TMC and reduce network coverage Reduce winter maintenance coverage currently 42%>30%. Review routing. Border collaboration. Change pothole criteria (but fix neighbouring potholes) Move more reactive maintenance into planned e.g. Bridges Review depot property Co-locate contractor and WSCC


Appendix C Market Testing contractor attendee list

Name Company Name Email Address

Mike Notman Ringway [email protected]

David Binding Ringway [email protected]

Matthew Young Skanska [email protected]

Tony Cook Skanska [email protected]

Bob Pizzey VolkerHighways [email protected]

Bernard Hodgkenson Kier [email protected]

Steve Phillips Balfour Beatty [email protected]

Simon Watson Balfour Beatty [email protected]

Philippa Hammersley Balfour Beatty [email protected]

David Ogder Amey [email protected]

Matt Kelley Amey [email protected]

Steve Lofts Amey [email protected]

Alistair McBeath Tarmac [email protected]

Paul Ahsonollah Tarmac [email protected]

Alan Cowan WSP [email protected]

Matt Batchelor HSL [email protected]

Richard Collins Colas [email protected]

Paul Middleton Colas [email protected]

Ian Darroch Tarmac [email protected]

Dawn Clifford Costain [email protected]

David Bailey Costain/CH2M [email protected]

Gary Massey Costain/CH2M [email protected]


Appendix D HMEP Procurement Route Choices Toolkit process


Appendix E HMEP Toolkit Outcome – Explore options


Appendix F Suitability, Feasibility and Acceptability Matrix

DELIVERY OPTION MODELS

Suitability - Objectives

Suitability - Time

Feasibility - Cost

Feasibility - People

Acceptability - Political

Does this option satisfy

the WSCC objectives that

have been identified and agreed to be

achieved within this

Procurement?

Does this option fit

with and suit the existing

planned WSCC

timeline for delivery of

this Procurement

?

Does the cost of this option fit with the existing planned

WSCC budget for

service delivery?

Does the WSCC have

the resources,

capabilities, knowledge

and experience to deliver

this option model?

How well does this option satisfy the needs and

expectations of WSCC

members and other key

stakeholders?

Private Funding

Does not satisfy

objectives

Probably insufficient

time to procure

Likely to be expensive and lack of

budget certainty

Not Acceptable

Not acceptable

Single Provider

Does satisfy procurement

objectives

Procurement timeline is

short so that would suit

single provider contract

Yes, but dependent

on tendered prices and

flexibility of service

combined with

payment mechanism

s

Current contract is

single provider;

team does have

capability to deliver but needs top up training

Acceptable

Multiple Providers

Does satisfy procurement

objectives

Probably sufficient time to procure

Yes, but dependent



combined with

payment mechanism

s

Current staff would

have capability to deliver this model but

would need top up

training

Acceptable


Framework

Does not satisfy

objectives due to limited contract duration

Not acceptable as

4-year contract duration

limit. WSCC want longer contract for stability and

budget certainty

Yes, but dependent



combined with

payment mechanism

s

Potentially does have capability with small

team of experienced

staff

Acceptable

Joint Venture Does satisfy

procurement objectives


time to procure

Yes, but dependent



combined with

payment mechanism

s

Potentially does have capability with small

team of experienced

staff

Possibly not acceptable as provider seen as one entity so could lose

powers within contract

In-House

Does not satisfy

objective of budget saving


time to procure

Possibly not due an anticipated increase in

staff requiremen

t

Current resource has lost a

lot of hands on

experience so this

would not be suitable

Probably not acceptable as

increase in staff may

result when pressure is on to continually

reduce revenue budgets

In House top up

Possibly not due an

anticipated increase in

staff requirement


time to procure

Possibly not due an anticipated increase

in staff requireme

nt

Current resource has lost a

lot of hands on

experience so this

would not be suitable

Acceptable assuming minimal

increase is staff

Teckal

Yes, as budget

transferred to separate

entity however risk to authority to cover any

Probably not due to legal input

and political clearance required

Yes, as budget

transferred to

separate entity

however risk to

authority

Current resource

questionable on

breadth of expertise

to manage a Teckal

Could be acceptable

with current budget

pressures


deficit in funding

to cover any deficit in funding