Purpose

Proposed decision:
 
APPROVE the procurement and contract award of
a zero value Road Asset Renewal contract;
 
DELEGATE authority to the Director of Highways
and Transportation, to take relevant actions to facilitate the
required procurement activity;

DELEGATE authority to the Director of Highways
and Transportation, in consultation with the Cabinet Member for
Highways and Transport, to take relevant actions, including but not
limited to, awarding, finalising the terms of and entering into the
relevant contracts or other legal agreements, as necessary, to
implement the decision; and
 
DELEGATE authority to the Director of Highways
and Transportation, in consultation with the Cabinet Member for
Highways and Transport, to award any extensions of the contract in
accordance with the extension clauses within the contract, part of
which includes undertaking market testing to ensure any
extension(s) continue to provide best value to the authority.
 
Reason:
 
Our 5,400 road network
in Kent has a replacement value of £10.2 billion. It plays a
vital part in delivering council objectives set out in Framing
Kent’s Future by enabling safe and reliable journeys
around and through the county. Our roads support social wellbeing
and economic prosperity. They are essential for emergency services
to execute their work: policing, healthcare, fire, and emergency
response provision all require an effective highway network. These
services are a key part of a functioning society which cannot exist
without well-maintained and well-managed roads.
 
Our current approach to road
maintenance is set out in our
Highways Asset Management Plan for 2021/22 to
2025/26 (HAMP) which was formally adopted and published
in July 2021. The majority of road spend is on
planned data-driven maintenance to prevent potholes and surface
defects occurring in the first place, a key principle of asset
management.  This includes £20-25m
per annum being spent on road asset renewal.
 
The current contract
with GW Highways that delivers this work expires in December 2024
and cannot be extended. To deliver this
service from 2025, to fulfil KCC’s duties under the Highways
Act 1980, KCC requires a new road asset renewals
contract.
 
A report is to be
presented to the Environment and Transport Cabinet Committee on 21
May 2024 to detail the procurement process for the provision of
this service through a single multi-year contract.
 
Options:
 
That KCC commissions a single
supplier contract to provide road asset renewal services for an
initial period of five years with extensions up to a further five
years.
 

Do nothing.

We have ruled out other approaches as they would not
achieve the right conditions to maximise best value whilst
maintaining quality standards.  They
would also not encourage and maximise materials innovation and cost
effective investment in plant and equipment to contribute to carbon
reduction.
Financial Implications:
There are no financial risks to the Council from developing this
zero-value contract, as the Council is only required to pay for
work after it has been delivered.  There
is also no guarantee of work under the proposed
contract.
 
The anticipate expenditure over the initial five year period may
be in the region of £20-25m per annum, based on the historic
spend through the current contract. Should the extension period of
up to five years be taken (ten years in total), we estimate a
similar level of expenditure continuing, though there is
uncertainty around government capital grants moving
forwards.  Road maintenance works are
funded through a combination of those DfT grants and KCC capital
borrowing.
 
In establishing the zero value contract, Kent County Council
does not commit in any way to awarding any volume or value of works
to the appointed contractor. This will allow flexibility where
services required may be affected by KCC budgetary pressures and
uncertainty around internal and external funding.

 
 
 

Decision

As Cabinet Member
for Highways and Transport, I agree to:
 
(i) APPROVE the
procurement and contract award of a zero value Road Asset Renewal
contract;
 
(ii) DELEGATE
authority to the Director of Highways and Transportation, to take
relevant actions to facilitate the required procurement
activity;
 
(iii) DELEGATE
authority to the Director of Highways and Transportation, in
consultation with the Cabinet Member for Highways and Transport, to
take relevant actions, including but not limited to, awarding,
finalising the terms of and entering into the relevant contracts or
other legal agreements, as necessary, to implement the decision;
and
 
(iv) DELEGATE authority to the
Director of Highways and Transportation, in consultation with the
Cabinet Member for Highways and Transport, to award any extensions
of the contract in accordance with the extension clauses within the
contract, part of which includes market testing to ensure any
extension(s) continue to provide best value to the
authority