Highways England has outlined key information about its Smart Motorways Alliance (SMA) plans – potentially worth up to £6bn over 10 years – which it says reflects a radical new direction for contractual arrangements on the strategic road network.
Prior to publishing the contract notice in late September and following a market engagement exercise in July 2018, Highways England has prepared a supplier engagement outputs report, which outlines the objectives of the new model, the budget setting process and the way payments to suppliers will be arranged.
It has also published a prior information notice, which reveals the contract notice is expected to be published on 25 September.
The SMA will be contracted to deliver the entire Smart Motorway Programme (SMP) for the balance of RIS 1, RIS 2 and RIS 3, using a single multi-party Alliance contract for Highways England and all Alliance partners.
The main aim of the SMA contract is to ‘create a delivery environment with shared ownership of the programme budget and a risk profile which links the Alliance Partner fee recovery (overhead and profit) to collective delivery performance’.
Alliance Budget surplus/deficit:
Alliance partners can earn additional payments through a proportion of gain share against the budget, over and above the budget share, in circumstances of budget outperformance (underspend). A liability cap to the Alliance Partners for overall budget performance (overspend) will be set at the same level as the budget fee proportion.
Highways England is seeking feedback on the updated commercial arrangements ‘specifically any key matters that would influence the participants appetite to tender or impact the structure of their future tender submission’.
Please send feedback by Wednesday 5 September to: RTMYourQuestions@highwaysengland.co.uk