Kier Highways ‘Defined Costs’ Contract Non Compliance & Process Unravels

Firstly, thank you to those providing information enabling us to better understand the process engaged by Kier Highways (‘Kier’) and seek pertinent information.

For years, Highways England has kept us from the ‘Defined Costs’ or ‘base rates’ Kier should be charging Third-Parties – drivers, fleets, hauliers or their insurers.  The Authority repeatedly claimed the rates were ‘commercially sensitive’, subsequently, that our approach was ‘vexatious‘.  When these protections (exemptions) fell away, it appeared the rates would be disclosed … instead, the Authority claimed (late 2018) price lists do not exist!  The schedule they had been protecting, the costs ‘held but commercially sensitive’, was a myth – instead, Highways England claimed to have overlooked agreeing on any pricing schedule with their contractors since 2012! 

This is clearly preposterous but why hide the information? 

To understand a reason, you need to be aware of who is pursuing you for monies.  Generally:

  • if the attendance & repair bill is over £10,000, Kier sends their invoice to Highways England who pays up (without question) then seeks recovery from the Third Party.  Kier regularly overcharges the Authority – but that is another issue.
  • if this bill is under £10,000, Highways England does not pay Kier’s bill.  Instead, the contractor must pursue the Third Party for the money.   

The contract (or ‘rules’) said that Kier must charge NO MORE THAN ‘defined costs'(£) + uplift(%).  But a Third-Party would not know this rule because coincidentally, Highways England kept it secret (other aspects of the contract were placed on-line) and Kier, not complying with it, made no mention of the small section of the agreement. 

  • IMPORTANT: defined costs (or base rates) should be the same to the Authority (HE) and a Third Party (TP).  It is the uplift that differs. 

Kier has never complied with the contract – since day one (Area 9 – 07/2014). Actually, that is not entirely correct … Kier Highways bill Highways England (a party to the contract and who know the ‘rules’) using ‘defined costs’ – it is Third Parties who are abused; under the nose of the Authority, Kier billed Third Parties by use of far higher rates. 

We raised the alarm in late 2015, we met with Highways England 06/2017 but the process was permitted to continue.

It now transpires multiple schedules of rates exist, that these are used to compile a Kier ‘Cost Breakdown Document (CBD), an example of which, with associated rates,  can be found here.  In an attempt to be provided with the full schedules, a Freedom of Information Act request has been made and can be read here

Release of the rates will:

  • confirm the gross exaggeration and extent of same – the inappropriate demands (and payment of) £millions from Third-Parties – enabled and permitted by Highways England.
  • enable Third Parties to accurately calculate the actual cost of repair the damage they caused.
  • corroborate our concerns Kier have been supplying false cost information to the Authority
  • demonstrate the Authority has permitted their contractor to ignore the contract and throw Third Parties, the public they are to serve, to the wolves

Arguably, we do not need the schedule of defined costs to demonstrate the Authority’s failings.  The math’ supports our statements (above).  For example, we know the 2016 charge for an operative to Highways England was £23.71 and the uplift 7.38% – a total of about £25/hour.  The uplift to a Third-Party on the rate should be 25.29% i.e. a total of about £30/hour.

No matter how you play with the figures, £23.71 + 25.29% does not achieve the £65 to £73/hour Kier charged.  But the exaggeration does not stop here – Kier add a 50% uplift after 5pm of a weekday (£97/hour) and double this of a weekend (£130/hour), multipliers the Authority does not see – read more here.

An example of the exaggeration can be found here.

However, we wish to recalculate claims, ensure Third Parties are paying actual costs, as the Authority would have us believe they are being charged. To do so, we need to know the defined costs for a specific period.

It appears Highways England are obstructing to prevent us from understanding the extent of the exaggeration they have allowed

The above relates to ‘exaggeration’ which the Authority’s own Counsel informed a Tribunal (12/11/2019) amounted to fraud.

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