Bids received for asset support contracts (ASC) in areas 1, 13 and 14 are all being binned and the whole process will start all over again with new documentation asking different questions.
The contracts were meant to start in April 2015 and run for five years.
Area 1 covers Devon & Cornwall, 13 is Cumbria & Lancashire, and 14 is Northumberland, Tyne & Wear, Durham and North Yorkshire.
The Highways Agency was expecting to spend more than £160m a year on the three contracts – up to £43m on Area 1, £46m on Area 13 and £81m on Area 14.
Suspension of these three ASC contracts follows the scrapping of bids for two other ASC contracts in December, for Area 12 (Yorkshire) and Area 4 (Kent & Sussex). [See our previous report here.]
A Highways Agency spokesperson said: "We have decided to discontinue this procurement following stage 1 finance evaluation. Some of the elements of the bids have raised concern and we are of the view of that they will not support the delivery of the contract over the next five years.
“We want to take the opportunity to return to ITT [invitation to tender] to ensure a proper balance between the quality criteria and price. This will provide all tenderers with the opportunity to submit tenders to successfully deliver the future needs of the Agency and the successful delivery of a significant programme of maintenance and improvements required between now and 2020."
On questioning, the Highways Agency spokesman said that the responses from highway maintenance contractors "gave the impression that" they failed to meet either quality or price criteria but added that this was not because the capabilities of UK contractors was lacking.
“We are confident in our supply chain but what they are sending back is not what we want,” he said.
There is no indication whether contractors will be reimbursed for the huge expense wasted on the bidding process to date.
He confirmed that all the document drafting had been carried out in-house by Highways Agency staff and no consultants were employed for the procurement process.
One industry source to whom The Construction Index spoke said that the screw-up was “symptomatic of the Highways Agency these days”. It used to be considered a paragon of best practice in procurement, he said, but clearly no longer.
The Construction Index understands that core to the problem is that there was a disconnect between the information that the tender documentation sought to solicit and the actual tasks that the Highways Agency wants done. Or as our source put it: “The model meant people could bid low and tick all the right boxes without getting the job done.”
It appears that the Highways Agency is reluctant to pin the blame for the affair on anyone personally. Chief executive Graham Dalton handed in his resignation last month and leaves in the summer but this may just be coincidence. The timing of his departure coincides with the Highways Agency forthcoming change of status into Highways England, a government owned company.
The man directly responsible for procurement at the Highways Agency is David Poole, who has been with the organisation since 2008. In 2013 he was given overall board-level responsibility for a newly merged commercial and procurement division.
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