THE Scottish Government has been forced to delay signing major road maintenance contracts worth £230 million after one of the losing bidders challenged the process.
Amey, which currently maintains more than 430 miles of trunk roads and motorways in the south-west of Scotland, is understood to be considering a legal objection after it lost out to Scotland Transerv, which is due to take over responsibility for the routes next March.
The firm similarly failed in a bid to take over maintenance of arterial roads in the north-west at the same time – losing out to Bear Scotland – despite submitting offers that would have required "substantially" lower levels of taxpayer subsidy on both contracts, industry sources say.
The row has echoes of the dispute that last week forced the UK Government to order a review of its entire rail franchising programme and cancel the award of a £13 billion contract to run West Coast passenger trains to FirstGroup after discovering "significant flaws" in the process.
Virgin Trains, which runs the London to Scotland services, had challenged that decision on the grounds that the Department for Transport (DfT) did not properly calculate the risk involved in First's bid, claiming that its growth assumptions were over optimistic.
Crucially, however, Amey has challenged the decision after discovering its bids were considered to carry an unacceptable level of risk by officials at Government agency Transport Scotland, which was in charge of the procurement process.
An analysis of the bids carried out earlier this year, ahead of an expected handover date in autumn, revealed the price submitted by Amey was "abnormally low", prompting fears the actual cost to taxpayers for delivering the contract could rise.
A spokeswoman for Transport Scotland said: "We can confirm a bidder put in a price that was relatively low. The bid was thoroughly investigated and found to be abnormally low, carrying unacceptable risk. Therefore a decision was made to reject this bid.
"We will robustly defend any legal challenge that is brought forward but are unable to comment further at this time."
Details of the bids have not been released by Transport Scotland as they are deemed to be commercially confidential.
The decision is a blow to Amey, one of the UK's biggest contracting companies which is owned by Spanish infrastructure giant Ferrovial, which will lose its foothold in Scotland after carrying out road maintenance work since 2001.
It is unclear what contingency plans would be available if a contractor is not put in place before the due handover date on April 1, 2013. Amey's contract to maintain the south-west network, which was originally due to last six years, has already been extended to its maximum duration of seven years, as had the contract for the north west, currently held by Transerv.
One source with knowledge of the dispute said: "Amey are adamant that they have priced perfectly correctly within the terms of what was allowed under the contract process. Apparently glaring errors were discovered in it and highlighted by Amey."
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