2020 Kier Highways 7th Approach to DCP Rates

Taking Area 9 as an example, the contract, with regard to pricing Damage to Crown Property (DCP)  attendance and repairs is straightforward setting out the equation by which a Third Party was to be charged no more than:

  • defined costs plus:
  • an uplift percentage (25.29%)

This appears in Appendix A to Annex 23.  But what use is this protection to a Third-Party (driver, fleet, haulier or their insurer) if the Authority (existing to serve the public):

  • keeps the process secret;
  • fails to upload the section (but places the remainder of the contract on-line)
  • makes no mention of it in years of exchanges
  • does not refer to it in audits and
  • fails to ensure its contractor is complying with the process?

Is it a coincidence the contractor similarly is silent on the Appendix and does not comply with the contract from day one?

It appears likely the section would still be hidden had a Kier witness not inadvertently left the Appendix tagged on the end of their Annex 23 exhibit in early 2017.  They have not done so again. 

Appendix A is ‘good’, Jim O’Sullivan (CEO of Highways England) told us so almost a year ago.  Yet still, it is not complied with.  Clearly, there are issues, at least in Area 9 (and likely Area 6 & 8 ‘gifted’ to Kier) – the contract of 07/2014, sets out one process.  Yet, it appears each time Insurers and Adjusters gain traction Kier Highways introduces a new inventive method to profiteer and Highways England take no action to protect those they serve – third parties, the public. 

So much for a contractually agreed, single process for charging Third Parties,  Kier Highways are on their 7th: 

Date Assets Cost
1 2013 2 ISU operatives + van £125
2 2014 2 ISU operatives + van £1,500
3 07/2014 2 AIW’s + van £2,700 plus £2000 admin’.  Incident attendance starting cost £4,700
06/2015 EM Highways acquired by Kier Ltd
4 08/2015 2 AIW’s + van £652.50+ 4 hour attendance charge and uplifts after 5pm of a weekday
5 10/2015 AIW(s) + Van hourly rate £70+ / hour for an AIW, £35+ / hour for van
6 06/2019 Multiple £1,601.59 NSoRC – proportionally applied fixed fee for, suspended 31/10/2019
7 11/2019 2 AIW’s + van £1,220.62 CECA based? Proportionally applied fixed fee (source Y01A196)

1above appears reasonable for 2 operatives and a van utilised for 2 hours. 

2‘ above saw a 12-fold increase, over 1000% markup whereas Highways England were seeing inflationary increments – a few %.

3‘ is the now infamous ‘1153’ that saw Third-Parties fleeced and owed many, many £millions.  The process can be found here, the figures, here.

4‘ was to replace ‘3’ but was so obviously flawed as to be seen on just one claim.  The process saw the start of Kier claiming AIW’s worked 8am to 5pm and were paid more (multipliers) after 5pm of a weekday – we are told they work shifts and are paid no uplift i.e. this appears to be fraud

This set ‘4-hour attendance’ methodology was flawed for obvious reasons:

  • 4 hours was about the maximum seen on a sub-£10k claim.  If using an average, 2 would have been more appropriate.
  • the hourly rate for an AIW / van was clearly substantially more than could be calculated using 1153 (process ‘2’) figures
  • charging us a multiplier on a vehicle was bizarre*

*we struggled but managed to explain to Kier’s manager (Mr Pendlebury-Green) that, unlike people, plant (vehicles) show no inclination to finish work at 5pm on a Friday night, attend the football Saturday or be in church Sunday morning – plant does not demand a 45-hour week and expect an uplift.  Nor does plant cost more of a weekday afternoon, midnight, weekend or Public Holiday. 

5‘ claims to comply with the contract but does not.  Charges are misrepresented to Third Parties and the Courts.  Uplifts are applied but are not a cost incurred;  Third Parties and Courts are misled about these too.

2019, faced with acknowledging a failure to protect the public by ensuring compliance with the contract and having to disclose a schedule of rates that would reveal the true extent of the overcharging (many, many £millions), Highways England claim to have no schedule of DCP rates in any ASC (contract).  This meant one had to be created ….

6The NSoRC had obvious elements of duplication (excessive charging) and resulted in us quickly making a substantial submission to adjust and assist.  But, as we explained, why bother, why spend months creating this ‘National Schedule’?  The NSoRC process was unnecessary, there was a perfectly good process in place – Appendix A (see above).  But compliance did not allow for profiteering.

The beauty of Appendix A, from a contractor’s perspective, is that Third-Parties did not understand or know of the ‘protection’ and the Authority did not insist upon the contract being complied with.  The cost + uplift is applied to Highways England claims, they are provided with the breakdown clearly set out.  But Third Parties were not only charge dosing a far higher schedule of rates, but the presentation also gave no clue about the rate construction.

Instead of the NSoRC, the Authority could simply have instructed Kier to adopt the process they agreed to in 2014. Why have they not, to this day?

31/10/2019, seemingly unable to compile a schedule of rates for DCP works, Highways England suspended the process.  The Authority claims it is an inability to have Insurers agree on the rates that led to its suspension.  We suspect the contractors took issue and in support of this, we have noted Kier Highways recalculating claims priced using the NSoRC and applying their new procedure which has seen the doubling of some invoices: 

7‘ Kier’s latest exaggeration in another guise only now, it appears they not only wish to force a contract non-complaint process upon Third Parties, but they are also unwilling to explain the rates or justify their application.

More about the new profiteering process can be read here

For example – read more here.  

 

 

 

 

But can the Authority do this or have they lost control?

Highways England have created this mess; they have permitted contractors to operate other than in accordance with the contract which effectively said, charge Third Parties by use of:

actual cost (£)
uplift (%)

31/10/2019 NSoRC was abandoned.

No matter, Highways England have done the hard work collating information and establishing not just reasonable rates but ’eminently reasonable’ rates.  It is, after all, Highways England in whose name any proceedings will be issued, the current authority to do so being issued by Tim Reardon (Legal Counsel) who has wholeheartedly supported the NSoRC.

But it appears Kier Highways have other ideas – read more here

*source : Kier Highways former claims manager

**source: Highway sengland 31/10/2019 – ‘We will revert to pursuing claims based on the actual cost of carrying out the repairs and will continue to explore options for a transparent and equitable set of rates’.

 

 

All the above conducted in the name of Highways England which appears powerless to act.