Department for Transport has revealed the methodology it will use to ensure greater emphasis is placed on quality when franchises are awarded

A new formula for awarding rail franchises has been published by the Department for Transport which will place significantly greater emphasis on stimulating service quality, driving management competence and building stronger long term relationships within the industry. The DfT anticipates that the changes will be funded by a short term reduction in premium payments received from operators.

The new method of evaluating franchise bids will be applied initially to the new seven-year Thameslink Southern Great Northern franchise and 15-year Essex Thameside franchise, both of which are due to start next September. It will include a specific quality score which will reflect bidders’ abilities to meet the most important current and future issues each franchise faces.

To ensure high quality bids that require investment can compete on a level playing field with lower quality bids that offer a significantly higher premium, the DfT has devised a new technique to assess quality. Rather than introduce the standard process in EU procurement of awarding a fixed proportion of marks for price and a fixed proportion for quality, a flexible formula will be used. It has been designed specifically to enable a wide variety of bids with widely differing premium payments and quality initiatives to be balanced and evaluated.

The DfT expects price will still account for the majority of points, but sources said the quality weightings mean that it would be almost impossible for a low-quality, high-premium bid to win.

A senior DfT executive told Passenger Transport that the impact would be to create a shift in management mentality in the rail industry which “puts service at the centre of every decision taken, whether by engineers, operations or commercial people”.

Further coverage can be found inside the latest issue of Passenger Transport.

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