Herefordshire Council is retendering a £200m multi-service contract after deciding to terminate a deal with incumbent contractor Balfour Beatty.
Publication of the public realm services tender – covering highways and improvement works – on 16 January brought to a close nearly two years of deliberations by the council.
The agreement, which included road works, drainage repairs and bridge maintenance was first signed in 2013 and valued at £200m. Herefordshire contracted out multiple services including highway maintenance and improvement works, street lighting, public parks and open spaces.
The council then brought the public rights of way and traffic management services back in house in 2021. But in March 2023, it announced a review of how the contract was being met by Balfour Beatty.
The council claimed at the time that the relationship with the firm might have been “too friendly, with [a] lack of contractual control”. A report set out plans to create an in-house unit with technical staff and external providers topping up services.
Herefordshire Council said in April last year that despite an improvement in performance, a review had concluded that the current contract model “will not deliver the services to the council’s current requirements”.
“Legal advice concluded that the degree of contract modification required to instigate the future operating model would not be permitted under procurement regulations,” the council documents revealed.
The council had considered renegotiating the deal with Balfour Beatty but it eventually concluded that this was not possible. A two-year termination notice was then issued by the council in May 2024.
It added that “both parties are committed to working together for the remaining term of the contract to ensure a smooth transition to the new arrangements”.
Herefordshire Council is now procuring a contract to run from 1 June 2026. The deal is initially for seven years with the option of a three-year extension.
It covers three areas: park and playground equipment, construction work for roads and construction work for highways.
The new contract has a value starting at £150m, with a limit of £200m, and is open to SMEs to bid for it.
Interested parties must respond before noon on 17 February.
Included are road network resilience, construction, street lighting, pothole repairs and maintenance of bridges.
In the tender notice, Herefordshire Council said: “The council may include schemes with an estimated value exceeding £250,000 up to £1m when the requirements set out in the scope are satisfied.”
The council is also committed to “ensure high-quality services for local residents, and a smooth transition to the new arrangements”.
Construction News has approached Balfour Beatty for comment.
