Robust contracting for sustainable infrastructure

Our expertise helped two local authorities negotiate a billion-pound contract.

Due to the considerable value in monetary terms and the importance of network availability to residents, a highway maintenance contract is the most significant contract that most local/highways authorities will enter into. When the county council in question is reorganising into two new and separate unitary councils during a procurement, it is essential they are provided with legal support that goes beyond procurement and contracting to actively help manage the multiple and complex issues involved.

As Northamptonshire County Council was in the process of local government reorganisation, forming West and North Northamptonshire authorities, they appointed the Anthony Collins (AC) team due to the expertise that they needed to procure an NEC4 highways maintenance contract worth up to £1.4 billion. It had to be the right solution for one of the UK’s most extensive rural highway networks. In addition, the councils were determined to procure a contract that delivered environmentally, pushing bidders to provide cutting-edge solutions that maximised carbon reductions and delivered on innovation. We played a pivotal role to deliver comprehensive legal support through procurement, bidder selection and contract sign-off.

Delivery at every level

The disruption of Covid-19 lockdowns meant the whole 18-month procurement process was run virtually via Teams. The procurement process chosen was a competitive dialogue with multiple rounds of dialogues through which bidders progressively developed and improved their solutions. The process also included innovative ‘rules’ around back office resource-sharing between the authorities, which ultimately delivered annual savings of over 5% per authority compared with two completely separate contracts.

The form of contract used was NEC4 Term Service Contract which is the market-leading form for infrastructure maintenance. Through the use of the ‘Option C’ cost option, the contract drives the contractor to act as efficiently as possible as there is an opportunity for both parties to share in cost savings that are achieved (as well as sharing any cost overruns though these are capped to give the authorities cost certainty).

When Kier Highways was selected as the preferred supplier for both authorities, the AC team supported taking the contracts through to completion.  This involved transferring all of the tendered offers from Kier into the contractual documents to ensure they were enforceable and advising on the first Task Orders to be provided to Kier under the new contracts. 

Fit for purpose

Legal delivery by the AC team enabled an efficient procurement process which, despite its complexity, remained attractive to bidders and produced an excellent level of competition.  Innovation resulted – including electric vehicles featuring throughout the contract’s up to 14-year lifetime. In addition, the authorities now each have a contract which is based on the market-leading contract form (NEC4), bespoke to the authorities’ specific needs as well as designed to drive efficiencies and cost savings.

“Highway maintenance is a key role for local government and critical for the people they serve. We developed and helped successfully procure a contract with innovation and efficiencies built in to ensure the effective maintenance of critical infrastructure used by thousands of people daily.”
Martin Brown, Associate, Anthony Collins