The National Audit Office produced a report entitled “Highways Agency: Contracting for Highways Maintenance” in October 2009
The Committee of Public Accounts held a hearing based on the report in December 2009 with witnesses from the Highways Agency. The Committee concluded in their subsequent report Highways Agency: Contracting for Highways Maintenance that the Agency lacked the commercial skills to manage the contracts effectively. It said:
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The Agency relies too much on the competitive procurement stage to deliver performance improvements. While the procurement stage offers a good opportunity to market test prices and rates, it occurs only once over the term of a contract. The Agency must proactively manage contractors, challenge their costings and establish benchmarks for continuous improvement during the term of each contract.
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The design of the MAC form of contract focuses on the outputs required rather than itemising the jobs to be performed.
The Agency’s official response to the Committee’s conclusions and recommendations is included in Treasury minutes in the Committee of Public Accounts Session 2009-10.
Also see:
My report to the NAO and their reponse.
