Agenda item

Report by the Corporate Director for Environment and Place.

The existing highways maintenance contract with M-Group Infrastructure (Milestone) is set to expire on 31^st March 2025 with no options to extend remaining. Oxfordshire County Council therefore needs to undertake a procurement of a new contract prior to the expiry of the existing.

The Audit and Governance Committee is RECOMMENDED to note the governance in place and associated process being followed for the procurement of the future highway maintenance contract.

The report was presented by Paul Fermer, Director of Highways and Operations.  He confirmed that with the existing highways maintenance contract with M-Group Infrastructure (Milestone) being set to expire on 31^st March 2025 there would be a substantial procurement exercise to undertake for the new contract.  A robust governance process was being put in place to manage the project, including an Officer Working Group and a Portfolio Holders (Councillor Andrew Gant, Cabinet Member for Highway Management and Councillor Calum Miller, Cabinet Member for Finance) & Corporate Director Steering Group.  It was being ensured that Cabinet would have full visibility of the project and they were taking formal decisions at three key stages within the project.  These were the presentation and approval of proposed approach (October ’22), confirmation and approval of the preferred model to develop (March ’23) and approval to procure the preferred model (September ’23).

In response to questions from the Committee, Councillor Gant, Mr Fermer and Melissa Sage, Head of Procurement Contract Management, made the following points:

• The paper focused on process and governance as they were applicable to this meeting.  The specific details of the proposed contract options would be set out in a report to Cabinet the following week.  This included the work of the external contractor DM Squared and how they ranked the options that were available.  The Officer Working Group and the Portfolio Holders & Corporate Director Steering Group are both held on a monthly basis.
• Assurance was sought that risks were being mitigated in relation to bidders.  Members were advised that robust policies, processes and templates had been established and whilst there was always the potential for losing bidders to legally challenge the processes, the Council’s recording of its course of action would be fully documented.
•  Further information was sought on the estimate that consultations support would cost in the order of £400k.  It was stated in response that this took into account experience of a previous contract and benchmarking against the spending of other local authorities.  It was important to have the right level of resource and capability both in terms of service and legal knowledge.
• The tender process included a first stage where the whole market was involved in order to assess interest.  The top few in the scoring would be taken through to the creation of the tender bid.  There would not be a competitive dialogue where there were several iterations of the tender submission.  The suppliers would only submit one full tender bid.  It was to be determined how many lots there were under the one tender.  The specification of the tender and how many contractors were involved in the final contract was also yet to be determined as the final decision on the preferred model would be made by Cabinet.  Each tenderer would be assessed on their own social value and how it would benefit the contract.
• The overall length of contract and breaks was the next stage of the process for consideration.  
• The contract will cover the whole of Oxfordshire but exclude the unclassified network within the City as the City have a long standing right they have enacted (under s42 of the highways act) to undertake maintenance works.  There was confidence that contract award by March 2024 was doable, taking into account the procurement strategy.  The Committee was informed that for a contract of this size, there was not a commitment to future funding but to give an indication, past funding levels and volumes of work were reviewed.  Contractors would need to make a judgement on the pricing in the current financial climate.

The Committee recommended that a member of the procurement team was appointed to the project team in response to lessons learned from previous contracts.

RESOLVED: That the Committee NOTED the governance in place and associated process being followed for the procurement of the future highway maintenance contract.