Road builders lose up to £5m as bidding restarts

Around five construction and engineering companies were in the running for three contracts

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The Independent Online

Bidders on five roads deals are fuming that they have wasted up to £5m on the cost of working up their proposals after the Highways Agency decided to effectively restart the competitions.

Around five construction and engineering companies were in the running for three contracts covering road-works in Devon & Cornwall, Cumbria & Lancashire, and Northumberland, Tyne & Wear, Durham and North Yorkshire.

The Highways Agency planned to spend £160m a year on these three deals, but was unhappy with the companies’ submissions and last month asked them to re-bid with fresh documentation. This followed a decision in December to halt a bidding war, thought to include a similar number of interested parties, for maintenance deals in Yorkshire and Kent & Sussex.

Existing road contractors in these five areas, such as Mouchel-owned EM Highways in Devon & Cornwall, have been asked to extend their current deals by a year because of the delay.

But bidders have been left puzzled by the way the Highways Agency, which oversees England’s 4,300 mile-long strategic roads network, has handled the process. They believe that the agency was not clear enough in what it expected and an industry source said it meant that each company spent up to £500,000 in bid costs for little reason.

“This has wasted everyone’s time, with significant bid costs, just to hand the work back for now to existing bidders,” added the source.

A Highways Agency spokesman said: “We have decided to discontinue this procurement following stage 1 finance evaluation. Some of the elements of the bids have raised concern and we are of the view of that they will not support the delivery of the contract over the next five years.” 

The spokesman added that the revised timetable will see bidders invited to tender again by the middle of this month or the end of June, depending on the deal. It is understood that Highways Agency chief executive Graham Dalton believed that scrapping the bid processes would ultimately provide better value for money to the taxpayer than pressing ahead with questionably priced submissions.