Highway maintenance: impact of framework agreements upon project financial performance

Abstract

Use of frameworks is recognized by the UK Industrial Strategy: Government and Industry in Partnership as an innovative procurement method that may be used to deliver cost savings. Support for potential efficiencies from use of frameworks by practitioners is, at best, mixed. A single case study was conducted to investigate the financial performance of frameworks for highway maintenance projects within the context of a major county council. Results from independent samples t-tests of 60 framework and 60 traditional discrete projects verified that use of a framework revealed no significant changes in production costs of tender prices, but significant reductions in total transaction costs for engagement and performance monitoring. These findings suggest that use of framework procurement methods can support significant cost savings when used within a public sector environment.

Keywords:

• Financial performance
• framework agreements
• highway maintenance projects
• public sector procurement
• UK.