Defined Cost + TP Claims Overhead = Maximum Charge
In Area 9, a bill for repairs presented to a Third Party (TP), a driver, fleet or insurer, by the Public Authority’s contractor, Kier Highways Ltd (‘Kier’), is to be calculated by use of a contractually agreed process; Appendix A to Annex 23.
Appendix A to Annex 23 is a brief document displaying a simple, logical process; Kier are to charge TP’s the cost of an item, plus a percentage uplift this is the MAXIMUM a TP is to be charged, they are to be charged ‘NO MORE THAN’. But …
- a TP will be unaware of this.
- Kier will not tell a TP and does not comply with the process
- Highways England have not to enforced it
Coincidentally(?), Kier are not complying with the process and Highways England has not made it publicly known, kept it secret.
In July 2014, Kier took over Area 9 and commenced using their ‘1153’ pricing process – which, from the outset, did not comply with Appendix A to Annex 23 but saw gross exaggeration. Kier battled to maintain ‘1153’ with their Finance Director (Operations @ Kier Highways Ltd) Neil Pendlebury-Green never once mentioning the methodology.
In late 2015, we met with Mr Pendlebury-Green and Ms Sophie Granville (claims manager) and 1153 was abandoned. However, during 2 meetings and 2 long conversations, the existence of Appendix A was not disclosed. Kier suggested a new process, but quickly abandoned this when we identified errors. The new (current) process was put in place by Kier but again, this does not comply with Appendix A – it is claimed this ‘defined costs’ process is compliant with Appendix A, but it is not.
Why are TP’s subjected to varying processes? From the outset Kier signed up to a set process.
Kier will say they met with Insurers and agreed the new ‘defined costs’ process:
- Why? There is a perfectly good one, contractually agreed
- Did Kier tell insurers about Appendix A to Annex 23?
Kier issued their ‘Insurers Guide’, sent out with each claim (apparently), used by Highways England as a ‘best practice guide’ (apparently) but this appears intended to dupe TP’s into believing the process used is fair, reasonable. Again, the document makes no reference to Appendix A to Annex 23.
In January 2016, Highways England audited Kier in response to our concerns. The report found no issues – and made no reference to Appendix A or that the process Kier used was non-compliant with the ‘protection’ afforded by Appendix A.
In March 2016, Kier refused to answer questions. Despite much correspondence with Highways England & Kier, neither has referred to Appendix A to Annex 23.
In the years the contract has operated; none of the claims we have seen have included mention of the Appendix. The Appendix is not applicable in all Areas but Kier use the process and pricing throughout their contracts, to include TfL.
For a more complete time-line, click here.
Systematic Exaggeration – click here
The math’ – click here
Time Line – click here