Pain / Gain Share Arrangement - DCP - Clarification

Response to this request is long overdue. By law, under all circumstances, Highways England Company Limited should have responded by now (details). You can complain by requesting an internal review.

Dear Highways England Company Limited,

From: https://www.whatdotheyknow.com/request/p...

In a 2016 FoIA response 743153Highways England stated:

• All contractors reconcile their costs annually against their recoveries.

• If the proportion of traced incidents exceeds expectations an assessment would be made and the Lump Sum payment would be reduced.

• However, no contractor has ever been in the position where the proportion of traced claims exceeds these assessments and there are various factors for this. The main one being not all damage linked to a driver is reported by the driver.’’

The above process and reply are specific. It is evident the answer relates to DCP (damage to Crown property) as the reply refers to 'damage' and 'drivers'. There is no suggestion ASC (contract, pre-planned or scheme) rates were pertinent. The pain/gain share relates to RECOVERIES i.e. monies received following DCP. Incidents are specified and at some stage analysis of the costs/recoveries has been undertaken.

I was subsequently informed my approach was made under a false premise. However, unhelpfully, in what respect was not explained. It was necessary to return to you for clarification. I was then informed:

• ‘You will be aware NEC Option C Target Price with a pain/gain share is used by Highways England for most scheme work although not used for Green Claim repairs.

• This was a direct result of challenge by insurers who were not prepared to accept any pain/gain approach in their payment of claims for damage repairs from negligent drivers.

• NEC Option E cost reimbursable (or Defined Cost plus Fee) approach is therefore used for DCP repair work.’

I became evident that I was NOT acting under an incorrect premise, rather that my understanding of the arrangement was correct (as at the 2016 date of the FOI response 743153 ), but the arrangement had changed due, apparently, to intervention by insurers. This intervention must have been after the 2016 FoI response in which someone informed yoru FoI team (as above):

a. there was a pain/gain share
b. this related to DCP incidents
c. it stopped
d. insurers challenged the arrangement
e. no contractor had ever achieved the threshold for pain/gain

Your replies appear intended to confuse, obfuscate and frustrate; it now appears you are telling me the 2016 response was false.

I wish have corroborated 'a' to 'e' above, to understand what was requested, what department responded and why, seemingly, when I have raised the issue of your contractor providing you with false information, after many months, the 2016 reply is said to be wrong.

I have no interest in ASC rates i.e. those for planned/scheduled works. I do not believe insurers have any interest insofar as claims presented to them are concerned. Insurers have no involvement in ASC planned works.

Please provide:

1. The original pain/gain correspondence, arrangement, contractual records etc. that relate to the pain/gain arrangements
2. When the arrangement commenced
3. When the arrangement concluded – it is evident this was in place at the time of the 2016 FoI response
4. All information relating to the challenge by insurers
5. How the pain/gain share impacted upon insurers

It is not accepted that the pain/gain share applied to insurers or that they would even be aware of the situation. Highways England kept secret the contractually agreed pricing process (Appendix A to Annex 23) of the contract and Kier did not comply with this but used a totally different procedure from day-one (07/2014) of the Area 9 contract. Highways England permitted (or failed to stop) this. Insurers (Third Parties) were subjected to the profiteering process ('1153') for over a year i.e. any challenge (if this did in fact occur) to the process was ineffective for a substantial period. 1153 had no ‘pain/gain share’ element.

Insurers were not subject to the ‘pain/gain share’ element, it was a contractual agreement between Highways England and their contractor.

6. If you believe to the contrary, please explain as your statements appear to be made on an incorrect premise.
7. How were insurers expected or requested to accept any pain/gain approach in their payment of claims for damage repairs from negligent drivers?
8. How did they contribute under this process?

The subsequent process (post-10/2015) has been subject to challenge due to contract non-compliance, exaggeration and fraud but, until 24/06/2019, remained utilised. You will appreciate therefore, your reference to insurer ‘challenge’ is not understood. Any challenge was unsuccessful.
9. What effect did the challenge have? Please evidence this with all information held.

The extract from Highways England Ref: FOI 743,153 (above) is correct and reinforced by the more recent response which confirms the implementation of the process albeit claiming the process stopped i.e. it was in force.

10. I am seeking al information relating to the pain/gain share, its period of operation to termination and the reasons for this.

With regard to your statement:

'It is not practical for Highways England nor our contractors to establish a precise number of damage incidents on our network and hence the proportion of incidents caused by traced and un-identified drivers.' This and further references to the identification of culprits, is a distraction, irrelevant. Clearly, future claims cannot be established precisely, they are predictions based on historical records (hence ‘1153’). However, this facet does not relate to my request save that it could be argued to support the existence of a pain/gain threshold:

• Unable to establish exact incident figures, you make a lumpsum payment monthly.

• If the number of untraced incidents is low or the recovery higher than anticipated, it appears reasonable for there to be a mechanism to either ‘take up the slack’ and meet any shortfall by increased payment to the contractor – the ‘pain’ to HE, or,

• in the event the contractor recovers more than anticipated or the lack of incidents causes the lump-sum payment to result in profit for the contractor, it follows there should be reimbursement - the ‘gain to HE.

Neither situation has any bearing upon an insurer.

There is also a contractual requirement for a contractor to provide claims figures to Highways England. Kier Highways, in your name, have stated to a Judge these figures are provided monthly. Kier provide records electronically to you. It appears a purpose of the submissions is to enable Highways England to establish contractor costs and recoveries i.e. to calculate whether there is a ‘pain’ or ‘gain’ situation.

Kier has, as evidenced, submitted false cost/recovery figures to Highways England.

11. Why, if not to protect their monthly lump-sum payment, are Kier providing false information?

Please ensure I am provided

12. the calculation giving rise to each of the costs making up the statement of ‘defined costs’ (operatives, staff, plant and materials) supplied in Highways England Response Ref. 766898.

13. evidence the defined costs for each item were, on that date, the same to Highways England.

You have also stated:

'In respect to schemes work New Engineering Contract (NEC) Option C Target Price with a pain/gain share is used by Highways England in ASC’s for most scheme work.

This is not used for Green Claim repairs in the more recent Asset Support Contracts.'

14. Please advise which Area ASC’s are
a. less recent Asset Support Contracts i.e. subject to pain/gain share
b. more recent Asset Support Contracts and
c. supply the information sought from the ‘less’ recent and
d. a copy of the agreement and
e. the figures presented under each where the pain/gain share exists and
f. whether the pain/gain share relates to ASC (planned) or DCP (emergency) works

Your response confirms the existence of a pain/gain share on some ASC’s. You also reiterate:

‘This was a direct result in previous Managing Agent Contracts of challenge by insurers who were not prepared to accept any pain/gain approach in their payment of claims for damage repairs from negligent drivers.’

15. As above, I am seeking the information in support of your statement which I do not accept to be correct. This information will include any challenge insurers made to the ASC charges.

Your response information should clarify the association of pain/gain with ASC contracts, in respect of planned (ASC) or emergency (DCP) rates. The Managing Agent Contracts (MAC) pre-date ASC (contracts) yet the 2016 response (FOIA 743153) specifically refers to ASC.

I am seeking all information relating to any challenge insurers made to ASC rates and the resultant conclusion of the pain/gain share in or after 2016.

16. In 2016 the pain/gain share existed but in respect of which contracts is not clarified. If the 2016 FOIA 743153 response was incorrect, to what was the response referring. I am seeking all information about this; the applicable dates, the figures and the challenge by insurers in respect of ASC and/or DCP rates to clarify your previous response.

Yours faithfully,

Mr P Swift

Highways England, Highways England Company Limited

This is an automated response:

 

Thank you for your email to Highways England.

 

If you’re reporting a real time issue which requires immediate attention
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6. mailto:[Highways England request email]

Dear Highways England Company Limited,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Highways England Company Limited's handling of my FOI request 'Pain / Gain Share Arrangement - DCP - Clarification'.

You have not addressed my request.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/p...

Yours faithfully,

Mr P Swift

Highways England, Highways England Company Limited

This is an automated response:

 

Thank you for your email to Highways England.

 

If you’re reporting a real time issue which requires immediate attention
please call the Customer Contact Centre on 0300 123 5000.

 

A map of the roads for which we are responsible can be found here
[1]https://assets.publishing.service.gov.uk....
If the road you’re interested in isn’t on this map it will fall under the
jurisdiction of the local authority. You can find details of local
authorities using the search facility on the gov.uk website at:
[2]https://www.gov.uk/find-your-local-council

 

If your email does relate to an issue on Highways England's network it
will be passed to the relevant team within Highways England and they will
respond to you within a maximum of 15 working days.

 

If you’ve made a request under the Freedom of Information Act we will
respond to you within a maximum of 20 working days. Your request will be
dealt with in line with government guidelines:
[3]https://www.gov.uk/make-a-freedom-of-inf...

 

Please be advised that emails may be monitored for training and quality
assurance purposes.

 

To help us improve our service please click [4]here to complete a short
survey.

 

Kind regards

 

Highways England Customer Contact Centre

This email may contain information which is confidential and is intended
only for use of the recipient/s named above. If you are not an intended
recipient, you are hereby notified that any copying, distribution,
disclosure, reliance upon or other use of the contents of this email is
strictly prohibited. If you have received this email in error, please
notify the sender and destroy it.

 

Highways England Company Limited | General enquiries: 0300 123 5000
|National Traffic Operations Centre, 3 Ridgeway, Quinton Business Park,
Birmingham B32 1AF |
[5]https://www.gov.uk/government/organisati... |
[6][Highways England request email]

 

Registered in England and Wales no 9346363 | Registered Office: Bridge
House, 1 Walnut Tree Close, Guildford, Surrey GU1 4LZ 

 

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References

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6. mailto:[Highways England request email]

Dear Highways England Company Limited,

Please advise by when I can anticipate receiving the IR

Yours faithfully,

Mr P Swift

Highways England, Highways England Company Limited

This is an automated response:

 

Thank you for your email to Highways England.

 

If you’re reporting a real time issue which requires immediate attention
please call the Customer Contact Centre on 0300 123 5000.

 

A map of the roads for which we are responsible can be found here
[1]https://assets.publishing.service.gov.uk....
If the road you’re interested in isn’t on this map it will fall under the
jurisdiction of the local authority. You can find details of local
authorities using the search facility on the gov.uk website at:
[2]https://www.gov.uk/find-your-local-council

 

If your email does relate to an issue on Highways England's network it
will be passed to the relevant team within Highways England and they will
respond to you within a maximum of 15 working days.

For more information on how we use your data please check our privacy
notice at: [3]https://www.highwaysengland.co.uk/privacy

 

If you’ve made a request under the Freedom of Information Act we will
respond to you within a maximum of 20 working days. Your request will be
dealt with in line with government guidelines:
[4]https://www.gov.uk/make-a-freedom-of-inf...

 

Please be advised that emails may be monitored for training and quality
assurance purposes.

 

Kind regards

 

Highways England Customer Contact Centre

 

This email may contain information which is confidential and is intended
only for use of the recipient/s named above. If you are not an intended
recipient, you are hereby notified that any copying, distribution,
disclosure, reliance upon or other use of the contents of this email is
strictly prohibited. If you have received this email in error, please
notify the sender and destroy it.

 

Highways England Company Limited | General enquiries: 0300 123 5000
|National Traffic Operations Centre, 3 Ridgeway, Quinton Business Park,
Birmingham B32 1AF |
[5]https://www.gov.uk/government/organisati... |
[6][Highways England request email]

 

Registered in England and Wales no 9346363 | Registered Office: Bridge
House, 1 Walnut Tree Close, Guildford, Surrey GU1 4LZ 

 

Consider the environment. Please don't print this e-mail unless you really
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