A second extension to Kent County Council's highways term maintenance contract with Amey has been criticised by councillors for what they described as an unacceptable 'last-minute approach to a critical service'.
The latest procurement delays were blamed on ‘unprecedented’ market volatility, while the council previously cited the need to avoid ‘further instability within the market’.
In August last year, the council’s cabinet member for highways and transport, Neil Baker, awarded Amey a 32-month extension to its highways term maintenance contract just days before existing deal – worth between £40m and £50m a year – expired.
A report to Cllr Baker noted that ‘as the contract has been extended several times extending the contract further could pose a legal risk’.
The published record of his decision explained that the procurement and mobilisation process for a new contract should in best practice require 27 months and a new procurement programme would ensure a new contract will commence from 1 May 2026.
Invited to explain why the council had not begun 27 months earlier the council pointed to a report, due to be considered by the council’s Environment & Transport Cabinet Committee Meeting next week.
This report notes that ‘there has been unprecedented disruption and volatility in the markets that has caused a delay in the commissioning cycle’.
It adds: ‘Global economic factors and double-digit inflation would have seriously impacted a contract of this size, value, complexity, and duration.’
The contract began in September 2011 and was due to terminate in 31 August 2021. It had already been extended, initially to April 2023, following the COVID-19 pandemic.
A report to the then cabinet member for highways and transport, Michael Payne stated that the extension ‘protects KCC statutory obligations and reduces the risk of carrying out a procurement during any further instability within the market’.
The August 2023 report to Cllr Baker cited significant volatility due to the impact and aftermath of COVID-19 and the war in Ukraine, with widescale challenges in the supply of materials, skilled and unskilled labour, and increasing fuel and financing costs.
It added: ‘In this climate there remains little confidence that letting a contract at this time would deliver a contract that would be economically advantageous, affordable, or that it would represent best value over the longer-term. It is therefore recommended to award a new contract to Amey Highways Limited via the Highway Civils Framework. However, this is not without risk.’
On the basis that the extension could pose a legal risk, Cllr Bake was advised to opt for a 32-month extension, rather than a possible 56 months.
The following month, the council issued a Pre-Procurement Notice for a new contract to run from May 2026 to Apr 2036 and valued at up to £1bn.
Although the press and public were excluded from the Scrutiny Committee meeting in September, the report to be considered next week notes that during meetings of the Environment and Transport Cabinet Committees and Scrutiny Committee, members ‘were clear about their concerns on how the commissioning of the extended contract was undertaken’.
It adds: ‘The absence of suitable long-term debate and the lack of the ability to influence and contribute to the commissioning process was identified. Whilst Members understood the importance and urgency of the decision, they were clear that the last-minute approach to such a critical and reputationally important service would not be accepted in the future.’
