Road Construction (Hansard, 21 June 1994)

§ Mr. Key

Since 1 April, responsibility for managing, maintaining and improving the national road network in England now lies with the Highways Agency. As the information requested by the hon. Member relates to the agency which is responsible, I have asked the chief executive to write to the hon. Member.

Letter from Lawrie Haynes to Mr. Chris Smith, dated 21 June 1994. You put down a Parliamentary Question for answer by the Secretary of State concerning the measures taken to ensure value for money and competition when inviting bids or placing contracts for road construction work. As your Question deals with operational matters for which the Highways Agency is now responsible, as promised by the Minister, Robert Key, I am replying. To ensure value for money, the Highways Agency relies principally on inviting competitive bids for work to be carried out in accordance with a detailed design and specification. We are required by EC Directives (now enacted in domestic legislation) to advertise all public works contracts with an estimated value in excess of ECU 5 million (currently about £3.7 million). The Agency goes further by voluntarily advertising all contracts with an estimated value in excess of £1 million. This is in order to seek out the widest possible market competition and to maximise competitive opportunities for the industry. Contracts are awarded either on the basis of the lowest price, or the most economically advantageous bid after taking into account other factors such as the time taken to complete the work, or the likely future maintenance costs of the form of construction chosen by individual bidders. The Agency is continually looking at ways of improving value for money and increasing numbers of contracts, mainly for new roads, are being invited on a "design and build" basis. This encourages contractors to draw on their particular skills and experience in putting forward innovative construction proposals which offer greater "buildability" and better value for money for the taxpayer. The Department of Transport is also exploring more radical ways of achieving better value for money for the taxpayer and has recently invited expressions of interest to design, build, finance and operate new roads.