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Learn how Surrey County Council adopted a long term, outcome based approach and highly collaborative behaviour to save £20m over a 5 year road renewal contract.
We identified sections of Surrey County Councils road network that required renewal over a five-year period. These sections amounted to approximately 10% of the road network, and the estimated cost to replace them, based on the rates in the term maintenance contract with Kier, was ~£120m. Surrey’s medium term financial plan for the five-year period only contained provision for £100m. To save £20m and deliver the entire programme, whilst also ensuring whole life value was maintained, Surrey adopted a long-term, outcome-based approach. This was delivered through a highly collaborative model including both tier 1 and tier 2 of the supply chain.
This case study is one of a number of real life demonstrations of the Alliancing Code of Best Practice for Infrastructure Alliancing.
We recognised that the three key enablers to the programmes successful delivery were:
The outcomes to be delivered were clearly defined by Surrey, and early discussions were held between Surrey and Kier to discuss the programme, and the potential opportunities for savings. These discussions indicated that savings in the region of 15% were possible, if long-term certainty could be provided, and if constraints on delivery were minimised. Agreement was then sought from Surrey’s Cabinet to commit to a five-year budget, rather than an annual budget. Initial approval to this was given, subject to a clear demonstration that this would provide the claimed benefits.
Kier then ran a procurement process to appoint specialists to deliver the programme, following a two-stage open book process. Tenderers were asked to put forward proposals for how they could remove waste and inefficiency, increase productivity and innovation, and improve quality. Aggregate Industries and Marshall Surfacing were subsequently appointed by Kier to deliver the programme. The key benefits identified during the procurement process were:
The entire team needed to work together collaboratively to realise the savings required. To support this, the teams were co-located, and used common processes and systems; however, the key to successful change was a strong focus on building effective relationships. Generally, the individuals from the different organisations were already working together, or had worked together before. It was therefore critical to understand the quality of their relationships, and the action needed to create a high performing collaborative team.
Initial workshops were run prior to the start of the programme, to allow the teams to determine the type of collaborative environment they wished to work in, and to discuss how well they felt they worked together. This allowed them to better understand areas where the quality of the relationships needed to improve. The individuals in the teams used a scoring system to identify what they considered to be critical elements of the relationship, so that there was a common understanding of areas where the teams were working effectively together, and areas where development was needed.
These workshops have been run regularly during delivery of the programme, including rescoring of the critical relationship measures by all team members, so that the effectiveness of the collaborative approach can be monitored and action taken if needed. This ongoing focus on the quality of the relationships has been essential in enabling the teams to deal with some challenging problems.
The programme is now into the third year, and to date nearly £60m of work has been successfully completed. Total savings in years 1 and year 2 of the programme have amounted to over £7m, enabling Surrey to resurface an additional 30 miles of roads.
In addition, the teams have achieved significantly improved quality of work, meaning that over 95% of schemes are covered by the 10 year warranty, and also resulting in improved satisfaction of the highway service amongst Surrey’s residents. The long-term commitment has also enabled an additional investment in apprenticeships as part of the Employment and Skills Plan.
Operation Horizon is a trial project on the Government Construction Strategy. The trial projects case study for this programme can be found at www.gov.uk/government/publications/procurement-trial-case-study-report-highways-maintenance
Jason Russell, Assistant Director, Highways and Transport, Surrey County Council
The Alliancing Code of Practice outlines the information needed at different stages within an alliance. It provides accessible and valuable support to those embarking on an alliance journey and those already developing an alliance. It draws on experience from many organisations; clients, delivery teams, consultants and academics to highlight:
Find out more about the Alliancing Code of Practice
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