 Performance-based
Contracting for Roads in UK
The UK Highway Agency uses Managing Agent Contractor (MAC) approach
in 9 out of its 14 maintenance areas. The MAC approach is based on
strong partnership between an integrated client-supplier team, focused
on delivering a safe and reliable network. The first MAC contract
went into operation in 2001. A new pilot maintenance contract, the
Enhanced MAC or EMAC, was awarded in December 2004.
Definition
The MAC contract incorporates elements of performance specifications
for routine and winter maintenance. It includes the requirement to
set annual targets, measure and benchmark performance (tied to an
incentive scheme), and achieve continuous improvement. It combines
the roles previously undertaken by separate Managing Agents (MAs)
and Term Maintenance Contractors (TMCs). The main advantage of the
MAC approach is that it achieves a single-point responsibility for
delivering front-line services to road users. The contract duration
is up to 7 years.
Supervision
The contract relies on Quality Management Systems and utilizes self-certification
procedures to avoid unnecessary supervision and duplication of
effort. The quality system approach allows flexibility and encourages
innovation to deliver a value-added service.
Service delivery performance indicators were agreed and implemented
with suppliers covering key functions such as response times to incidents
on the network and repair of defects. Results are now being collated
and analyzed to drive performance improvements and influence investment
decisions.
Lessons Learnt
 Clear
points of responsibility, no unnecessary layers of supervision. These are essential to effective contract management and operation
of partnering arrangements.
Improved
contracts and contract management towards reduced administration. Improved contract forms and contract management has encouraged
a culture of trust and a right-first-time approach through quality
management and continuous improvement in delivery, reducing the
need for supervision.
Evolution of the approach
Extension
of the MAC. According to the 2001 Procurement Strategy, the
Highway Agency plans to extend the use of MAC contracts to
cover the whole of the trunk road and motorway network in England over
the next five years, except on those parts of the network
covered by private finance contracts.
Enhanced
MAC. The client developed (and launched in 2004) an enhanced
MAC based on the three-year experience with on-going MAC
projects. The contractor became responsible for all maintenance
to roads
and bridges, including routine work such as winter gritting, incident
response and lighting repairs, as well as major maintenance
work such as resurfacing and bridge refurbishment. The Contractor
assists
with management and operation of the network, working from
a control centre which operates 24 hours a day, 7 days a
week. The contract
also covers the maintenance of highway technology, such as
electronic road signs. Payment is based on a target cost
approach with bonus
payment / target share closely related to achievement against
performance requirements.
Longer-term
performance-based contracts to maintain urban streets. In
2004, the City of Portsmouth signed a 25-year contract with
the Colas Group (JV Colas Ltd. and Colas SA). This contract has performance-based
features, as it will undertake to finance the rehabilitation
and maintenance of roads for a period of 25 years against
the
payment
of a fixed monthly fee during the same period of time. The
contract will cover 100% (480 km) of the city road network,
19,000 street
lighting units, and 84 structures, including street cleaning,
winter maintenance, and emergencies.
Sources:
- The UK Highway Agency Procurement Strategy Website:
http://www.highways.gov.uk/business/931.aspx
- The UK Highway Agency. 2003. “Agency launches Enhanced MAC
Contract”. Press Release HA031/03. November 27.
Available at:
http://www.highways.gov.uk/news/press_releases/general/2003_11_27a.htm
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