Amey has added to its recent strong run of major contract successes with the award of a £200M highways framework, one of the Highways Agency’s new Asset Support Contracts and the second of five let so far that the company has won.
The Area 8 contract is a five-year deal for maintenance, renewals and improvements to some 800 kilometres of carriageway in parts of Bedfordshire, Hertfordshire and Cambridgeshire, near towns including Milton Keynes, Luton and Stevenage, and including sections of the M1, M11, A5 and A1(M).
The Highways Agency expects to reduce the costs of road maintenance by 25% by 2015 under its new procurement method, which replaces the Managing Agent Contracts. Under the ASC approach contractors are encouraged to develop innovative solutions to achieve outcomes specified by the Highways Agency.
Highways Agency Asset Delivery Director David Brewer said the effective collaboration with the supply chain that ASC’s are designed to promote would be essential to achieve the cost efficiencies needed.
Amey Chief Executive Mel Ewell said: “The award of Area 8 supports our on-going strategy to grow our market share in this sector. The Highways Agency is a key client to Amey and this, along with the recently awarded Area 6 contract, strengthens our platform with the Agency, providing us with significant opportunities to develop this relationship further and help to move the industry forward.”
The new contracts contain a year-on-year cost reduction mechanism. They demand appropriate quality but do not reward over-delivery of service or specification. Contract extensions are among the incentives for innovation and efficiency.