The Highways Agency has told contractors that it is abandoning long-running bid races for asset support contracts in areas 4 and 12.
It is understood the bidding contractors and agency are poles apart in their estimates for the cost of the five-year maintenance deals.
The agency said a fresh invitation to tender will be issued early next year with clearer information about what needs to be delivered over the maintenance period.
Agency procurement chiefs decided to retender both areas after receiving bids that failed to meet spending expectations of around £825m for both areas.
The decision will put the award process back by about 18 months.
New contests will be run started by the first quarter of next year with more clearly scoped work outputs.
For the Area 4 in Kent and Sussex, worth an estimated £350m, incumbent joint venture Balfour Beatty Mott Macdonald will now have its contract extended.
Then it will be reinvited to tender along with rivals: Amey, Aone+, Atkins/Skanska, and Carillion.
Likewise for Area 12 in Yorkshire and North Lincolnshire, valued at around £475m, the present managing agent contractors Aone+ will have its contract extended before being reinvited to bid against Amey, Atkins/Skanska, Bam URS and Carillion.
Both areas were due to switch from Managing Agent Contractor to Asset Support Contracts by the autumn, although the procurement process has already slipped.
A Highways Agency spokesperson said: “The Agency is committed to ensuring that any contract we award is able to deliver against the backdrop of significant investment in England’s strategic road network.
“The decision to discontinue the existing procurement and issue a revised ITT has not been taken lightly; Asset Support Contracts are a key part of the Agency’s ability to successfully deliver its objectives.
“The Agency has decided to discontinue the procurement following stage 1 finance evaluation due to concern arising from elements of the pricing of the bids that in the view of the Agency will not support the delivery of the contract over the next five years.
“By deciding to return to ITT it will give all tenderers and the Agency the opportunity to align both contract documents and return tenders to meet the challenge of successfully delivering the future needs of the Agency and the successful delivery of maintenance and improvements required between now and 2020.“
The new ASC contracts are less prescriptive and focus on agency performance outcomes.
This allows contractors to assess what they require in order to deliver the service and focus on achieving outcomes, giving them freedom to innovate and to find more efficient ways of working.
