REPORT TO:Homes, Environment and Communities Scrutiny Committee

AGENDA ITEM NO: 7

REPORT TO:Homes, Environment and Communities Scrutiny Committee

REPORT NO:HE/06/12S

DATE:11 July 2012

LEAD MEMBER:Councillor Bob Dutton, OBE

(Environment)

CONTACT OFFICER:Alan Guest (Tel: 729610)

SUBJECT:Update on the Progress of the Term HighwayMaintenance Contract

WARD:All

1.PURPOSE OF THE REPORT

To provide Members with an update of the third year of the Council’s Term Highway Maintenance Contract with Enterprise (AOL).

2. EXECUTIVE SUMMARY

2.1On the 5August 2008 the Chief Environment Officer submitted a report (CEnO/14/08 refers) to the Executive Board to seek approval for the planned highway maintenance work to be contracted to a single contractor rather than the variety of contractors previously used for the work. Members requested that an update be submitted for consideration, after the contract had been in operation for twelve months

2.2The Contract was awarded in May 2009 to Enterprise (AOL) and is for a period of 5 years, with a possible extension of a further 2 years.

3RECOMMENDATIONS

3.1ThatMembers of the Scrutiny Committee consider the contents of the report.

REASON FOR RECOMMENDATION

(i)To advise Members on the performance of the Council’s Term Highway Maintenance Contract with Enterprise (AOL).

4.BACKGROUND INFORMATION

4.1The contract is based on Option D of the NEC - standard engineering and construction contract. This type of contract is intended to encourage a spirit of partnership between the Council and contractor with the fundamental aim of achieving best value for the service.

4.2The contractor has performed to the satisfaction of the 3 Council’s Area Managers who control the contract daily. No default notices have currently been served.

4.3There have been 6 remedials of any significance.

They were as follows:-

Cefn Road, Caia-Surface dressing

A534 Holt Road-Surface material failure

Ridley Wood-Surface material failure

Central Avenue, Acton-Surface material failure

Peris, Plas Madoc-Surface material failure

Offa Street, Brymbo-Surface material failure

Monthly management meetings are held with the contractor to monitor progress and deal with any issues that arise from work carried under the terms of the contract. These formal meetings monitor the progress and quality of the work of the contractor as well as identifying financial control and achieving set targets.

4.4Internal Audit has carried out a review of certain aspects of the Contract and the findings will be discussed with the Contractor.

4.5There are a number of KPI’s built into the contract designed to measure the performance of the contractor which are detailed in table 4.3. It should be noted that the street lighting performance can suffer severe variations as the Council has to deal with Scottish Power who have different timescales to the Council for repairs to main faults, which are set by the Regulatory body (OFGEN). These timescales are far more generous than the Council and officers have quizzed the power companies on this matter but they have stated that their priority is to ensure that business and houses have power at all times.

4.6The scope and value of work carried out by the contractor in the year 1 April 2011 to 31 March 2012 was as follows:-

Service Area / Work Type / Approx Value in Year 3
Individual Highway maintenance schemes each above £1K and below £70k in value / Footway reconstruction, drainage work, patching, etc. / £2,083k
Street lighting operations / Repairs and maintenance / £586k
Resurfacing / Carriageways / £3,284k
Road-markings / White lines and parking restrictions / £67k
Traffic / Minor Improvements, traffic calming schemes / £882k
Operations at Llay Recycling Depot / Operation and control of site / £262k
Work from other Departments / Other works / £152k
Traffic Signals / Refurbishment / £122k
Trunk Road / Repairs/Emergency Works / £448k
Structures / Wall repairs, bridges, culvert maintenance / £626k
Car Parks / Resurfacing / £110k
Total / £8,697k

4.7The full list of KPI’s under the contract is shown in table 4.7.

Table 4.7

KPI / Detail / Target / 2011-12 Performance / 2010/11Performance
HMC 1 a / Advance notification to WCBC Network Manager prior to commencement of works on highway / 95% / Achieved
Regular programme meetings are held between WCBC and the Contractor / Achieved
Regular programme meetings are held between WCBC and the Contractor
HMC 1 b / Notification to WCBC Network Manager of commencement and duration of scheme (Section 55) / 100% / As Above / As Above
HMC 1 c / Immediate Works Notice (Sections 55 or 57) / 98% / As Above / As Above
HMC 1 d / Actual Start (Section 74) / 95% / As above / As above
HMC 1 e / Works Clear (Section 74) / 98% / As above / As above
HMC 1 f / Works Closed (Section 74) / 90% / As Above / As Above
HMC 2 / Advanced signing and receipt of all Health and Safety Information prior to commencement of schemes / 100% / Achieved
Information held on Individual job files / Achieved
Information held on Individual job files
HMC 3 / Meeting Target Scheme Cost / 90% / Achieved.
The target costs are produced in agreement with WCBC and the Contractor. Any changes to target are dealt with via the mechanisms built into the contract. / Achieved.
The target costs are produced in agreement with WCBC and the Contractor. Any changes to target are dealt with via the mechanisms built into the contract.
HMC 4 / Meeting Target Contract Period / 80% / 100% overall annual plan achieved / Overall annual plan achieved
KPI / Detail / Target / 2011-12 Performance / 2010/11 Performance
HMC 5 / Maintaining Schedules of Rates within the agreed range of the benchmarked rates as specified by the Contractor / 100% / Achieved
Benchmarking group monitor the schedule of rates / Achieved
Benchmarking group monitor the schedule of rates
HMC 6 / Maintaining Labour Rates within the agreed range of the benchmarked rates as specified by the Contractor / 100% / Achieved
Benchmarking group monitor these rates / Achieved
Benchmarking group monitor these rates
HMC 7 / Number of default notices served / 5% / Achieved (None) / Achieved (None)
HMC 8 / Materials / Subcontractors Procured from lowest tender / 80% / Achieved / Achieved
HMC 9 / Environment Agency improvement notices for Llay Depot / 0% / Nil improvement notices served. 1 warning letter issued. / Achieved
HMC 10 / Recycling rate for highway excavated material (Llay) / 75% / Achieved / Achieved
HMC 11 / The length of time taken to repair street lights managed within the contract target is within 5 days / 95% / 93% not achieved. The average repair time was 4 days which is in line with the statutory performance indicator. Progress has been made in 2011-12 and it is anticipated that the target will be achieved in 2012-13. / 89% - not achieved - however, the average repair time was 3 days in line with Statutory performance Indicators.
HMC 12 / Ensuring the functional operation of the streetlight assets / 98% / There is an inspection programme in place for WCBC’s lighting on a monthly basis and community lighting on a fortnightly basis. / An inspection programme is in place

Note:

HMC 1a - 1f. Refer to the notice provided to WCBC regarding the required notice of the start date for the works.

HMC 5 - 8. The contract and procurement arrangements are continually monitored against other contracts to ensure continuing best value.

HMC 11 -12. National Indicators.

4.8Policy Framework – Not applicable.

4.9Budget– In January 2011, the Council received an invoice from its Term Highway Maintenance Contractor for additional overhead costs claimed to be payable by the Council since the commencement of the Contract in 2009. Since January 2011 the Contractor has claimed further additional overhead costs included in monthly invoices submitted to the Council but such additional overhead costs have not been paid.

4.10Legal –Legal advice has been taken and the Council is contesting the claim for additional overhead costs.

4.11Staffing –None.

4.12Equality/Human Rights–This report is a feedback on the performance against a set of standards already in place and therefore not subject to an equalities impact assessment.

4.13Risks–None.

5.CONSULTATION

5.1This report is a feedback on the performance against a set of standards already in place.

6.EVALUATION OF OPTIONS

6.1Not applicable.

BACKGROUND PAPERS / LOCATION / WEBSITE INFO.
None

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