Originally posted by Acx1688:
Transport for London
London‟s Bus Contracting and Tendering Process
Page 1
Contents
1. Introduction
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3
2. The Market in London – overview
.......................................................... 4
3. Purpose and Structure of key organisations in London’s bus
tendering process
..........................................................................................
5
3.1. Historical and Political Situation
........................................................... 5
3.2. Legal and Statutory Framework
............................................................
6
3.3. The Mayor & Greater London Authority
................................................ 6
3.4. Transport for London
.............................................................................
7
3.5. London Buses
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7
3.6. London TravelWatch
..............................................................................
7
4. The History of London Bus Contracts and Tendering
......................... 8
4.1. The introduction of Competition
........................................................... 8
4.2. Privatisation
............................................................................................
8
4.3. Present Contracts
...................................................................................
9
4.4. Tendering and Contracts - Key Features
.............................................. 9
5. The Tendering System In London
........................................................ 10
5.1. European Procurement Directives
...................................................... 10
5.2. Approved Contractors
..........................................................................
10
5.3. Tendering Programme
..........................................................................
11
5.4. Types of Route Tendered
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11
5.5. Types of Vehicle Utilised
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11
5.6. Service Specification
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11
5.7. Tender Information and Response
...................................................... 11
5.8. Tender Evaluation
.................................................................................
12
5.9. Rail Replacement Bus Services
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12
6. Quality Incentive Contracts
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14
6.1. Incentive Provisions
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14
6.1.1. Reliability Performance Payments
...................................................... 14
6.1.2. Contract Extensions
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14
6.1.3. Quality Performance Payments
.......................................................... 15
6.2. Minimum Performance Standards
....................................................... 15
6.3. Payment Adjustments for Service Reliability
..................................... 15
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6.4. Contract Payments and Revenue
........................................................ 16
6.5. Summary of Responsibilities
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16
7. Measuring Quality of Performance
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7.1. Targets
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18
The Mayor and the TfL Board set performance targets for London
Buses within TfL’s Business Plan.
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18
7.2. Monitoring Systems
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18
7.3. Mileage Operated (excluding traffic and other non deductible
losses)
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18
7.4. Reliability
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18
7.4.1. Regularity on High Frequency services
.............................................. 18
7.4.2. Punctuality on Low Frequency
services.............................................. 19
7.5. Driver and Vehicle Quality Monitoring
................................................ 19
7.6. Driver Quality Monitoring
.....................................................................
20
7.7. Engineering Quality Monitoring
...........................................................
20
7.8. Customer Satisfaction
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20
7.9. Public Correspondence Data
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20
7.10. Contract Compliance Audits
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20
7.11. Other Sanctions and Remedies
......................................................... 21
7.12. Safety
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21
7.13. Passenger & Staff security
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21
8. Environment
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23
8.1. London Buses and the environment
................................................... 23
8.2. Lowering emissions
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23
9. Current and Future Initiatives
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24
9.1. Smartcards and Cashless Buses
........................................................ 24
9.2. Bus Priority
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24
9.3. Bus Driver and Service Controller Training
........................................ 24
9.4. iBUS
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25
9.5. Countdown
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25
10. More Information and Contacts
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26
10.1.
Links.....................................................................................................
26
10.2. Contacts
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26
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1. Introduction
London‟s bus network is unique in the mainland United Kingdom in
that it is regulated. This enables Transport for London to plan,
procure and manage a network of services in a consistent and
co-ordinated manner. This system, along with adequate funding and
collaborative working with other organisations has lead to
increased service levels, improved quality of services and
significant increases in patronage. Bus operators compete for
contracts to provide specified services for up to seven years, and
are rewarded for exceeding defined targets to improve the service
to our passengers. Their role is crucial to the current and future
success of bus transport in London. The tendering and contracting
arrangements are designed to deliver value for money, balancing the
expectations of our passengers against the costs of improvements. A
London Assembly Transport Committee scrutiny of bus contracts in
March 2006 recognised that the London bus network represents value
for money. Transport for London is committed to promoting fair and
sustained competition to provide bus services in market that is
dynamic and unique. This document explains our bus service
tendering and contracting process and we look forward to further
developing and building on its already proven success.
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2. The Market in London – overview
London Bus Services Limited (London Buses) is part of Transport for
London (TfL) which is one of the organisations responsible for
delivering the Mayor of London‟s Transport Strategies. London Buses
manages bus services in London. It plans routes, specifies service
levels and ensures service quality. It is also responsible for bus
stations, bus stops and other support services. The bus services
are operated by privately owned operating companies, which work
under contract to London Buses. Every weekday over 7,000 scheduled
buses carry over six million passengers on approximately 700
different routes. Over 100 of those routes run 24 hours a day,
seven days a week. The network is dynamic and responds to London's
growth and changing transport needs. Every year up to a fifth of
the total bus service is re-tendered, with around half of the
network subject to some level of review. Buses are widely
recognised as the best option for increasing public transport
capacity in the short-term. Many initiatives are in place to make
journeys as easy, reliable, quick, convenient, comfortable and
affordable as possible. The following figures demonstrate how much
the bus network has developed in the last few years: Bus ridership
has grown by 68% per cent between 1999/2000 and 2007/08 Buses in
London now carry the highest number of passengers since 1962 In the
year to March 2008, there were 2.18 billion passenger trips on the
network Bus kilometers in London is higher than at any time since
1957, with 468 million km operated in 2007/8
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3. Purpose and Structure of key organisations in London’s bus
tendering process
3.1. Historical and Political Situation
When London's urban public transport was brought together in 1933
with the support of the London Passenger Transport Board, bus
services covered a vast area. At the time, they served much of what
is now Greater London, as well as areas in many of the adjacent
counties, up to around 35 miles distance from Central London. From
1970 to 1984, London Transport (LT) came under the direct control
of the Greater London Council (GLC) and the area for which LT was
legally responsible was also reduced to the present 1,580 sq km
(610 sq miles). Cross boundary links were retained and the GLC and
county councils took decisions on the funding of those services.
Under the London Regional Transport Act 1984, LT was again brought
under central government control. The Act required LT to set up
subsidiary companies to run both buses and the Underground. It also
stipulated that, where appropriate, competitive tendering should be
introduced to ensure LT operated economically and required less
financial assistance from public funds. In 1986, bus services
outside London were deregulated. This meant that any licensed
operator could decide to run a new route even if another company
already ran a service along the same roads. Although London was
exempted, it was intended that once bus services in the capital had
become less dependent on government assistance and steps had been
taken to encourage greater competition between operators,
deregulation would be extended to include London. In 1985, LT set
up a subsidiary known as London Buses Limited (LBL) to run its bus
services. However, route planning and fare structures remained the
responsibility of LT. In the same year, LT set up the Tendered Bus
Division to begin the process of competitive tendering. This
required LBL to compete against privately owned operators for the
opportunity to run individual bus routes on behalf of LT. The
routes were awarded to the operator which could run the best
service at the most cost-effective price, and about 40% of the
initial contracts were awarded to private companies rather than
LBL. It also led to another change as buses began appearing on
London's streets in liveries that were not traditional LT red. As a
step towards the planned deregulation of services, LBL created 13
locally based subsidiary companies, each with its own commercial
remit.
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These companies conducted their own wage negotiations, took
appropriate steps to reduce their overheads and competed against
each other, as well as private companies, for the contracts to run
LT bus routes. The subsidiaries became increasingly successful in
competing for routes. In December 1992, the government announced
that the LBL operating companies would be sold into the private
sector ahead of deregulation. However, a year later, it decided to
postpone deregulation until after the General Election in May 1997,
although the sale of the operating companies to the private sector
was completed in 1994. The Labour government, elected in 1997, was
committed to reintroducing a strategic governing authority for
London. In July 2000, London Transport was replaced by a new
organisation called Transport for London (TfL).
3.2. Legal and Statutory Framework
Transport for London and London Bus Services Ltd (London Buses) are
required to comply with a number of UK and European statutes and
regulations. Some of the key obligations for the provision of bus
services are detailed in this section. The Mayor and the Greater
London Authority have a duty to develop and implement policies for
the promotion and encouragement of safe, integrated, efficient and
economic transport facilities to, from and within Greater London
under Section 141 of the Greater London Authority Act 1999 (GLA
Act). Transport for London has functions conferred or imposed on it
by the GLA Act which facilitate the implementation of the duties
imposed on the Mayor and Greater London Authority under Section 141
of the GLA Act. London Buses, as a subsidiary of TfL, has powers
under Section 169(2) of the GLA Act to enter into transport
subsidiary agreements with any person for the provision of any
public transport services. Agreement to operate any bus routes
within Greater London must be in accordance with Section 182 (1) of
the GLA Act. London Buses and TfL also have obligations under other
more general Acts of Parliament, including the Transport Acts and
the Disability Discrimination Act, and under European Union
legislation.
3.3. The Mayor & Greater London Authority
The Greater London Authority (GLA) is made up of the elected Mayor
of London, the 25 elected London Assembly Members and a team of
support staff. The Mayor draws up policies for London‟s social,
economic and environmental development in addition to
transport.
The London Assembly examines the Mayor‟s activities, scrutinising
decisions and policies, approves the Mayor‟s proposed budget before
it is finalised and
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investigates issues of importance to Londoners. It then uses this
information to make proposals and recommendations to the relevant
organisations. The GLA is responsible for a range of services that
affect all of London and those that need strategic London-wide
planning. These include policing, fire services, economic
development and transport. The Mayor sets their budgets and
appoints the board members.
3.4. Transport for London
Transport for London (TfL) was created in 2000 as the integrated
body responsible for the Capital's transport system and is a
functional body of the Greater London Authority. TfL‟s primary
roles are to implement the Mayor of London's Transport Strategy and
to manage transport services across the Capital. TfL is responsible
for: London's buses, the Underground, the Docklands Light Railway
(DLR), London Rail, Croydon Tramlink and London River Services The
Public Carriage Office, Victoria Coach Station and London's
Transport Museum The red route network, Congestion Charge, and
London's 4,600 traffic lights Supporting a range of other ways of
moving around the city, including cycling and walking
TfL is directed by a Board whose members are chosen for their
understanding of transport matters and appointed by the Mayor of
London, who chairs the Board. The policies are implemented by the
Commissioner for Transport.
3.5. London Buses
London Bus Services Ltd (London Buses) is part of Surface Transport
within TfL. London Buses implements relevant sections of the
Mayor‟s Transport Strategy, and delivers against passenger
expectations. It is the organisation that plans bus routes,
specifies service levels and monitors service quality. It is also
responsible for bus stations and stops, and other services that
support bus services on the road - around the clock. The bus
services are generally operated by private operators, which work
under contract to London Buses.
3.6. London TravelWatch
London TravelWatch (LTW) is the official watchdog organisation
representing the interests of transport users in and around the
capital. Officially known as London Transport Users Committee, it
was established in July 2000.
LTW is independent of the transport operators and TfL, although it
is sponsored and funded by the London Assembly, which is part of
the Greater London Authority. It can assist with complaints about
bus services in London where the service provider has not
satisfactorily resolved them. London Buses is required by law to
consult with LTW regarding proposed changes to bus services,
however in practise London Buses consults LTW on a much wider range
of issues.
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4. The History of London Bus Contracts and Tendering
4.1. The introduction of Competition
Up to 1985 London Transport operated nearly all bus services in
London via its wholly owned subsidiary London Buses Limited (LBL).
Whilst bus services in the rest of the UK were deregulated in the
1980s, regulation was retained in London but competition was
introduced through tendering for individual routes as Gross Cost
contracts. A separate unit called the Tendered Bus Division was set
up within London Transport to manage the tendering process and
initially the competition was between private companies and
subsidiaries of LBL. The operators tendered on the basis of all the
costs required to operate the specified service, including vehicle,
staff and overhead costs, and London Transport retained the fares
revenue. At this time, an unsatisfactorily large number of
scheduled journeys simply did not operate - often due to lack of
staff or serviceable vehicles. Under the new contracts operating
companies were not paid for cancelled journeys within their
responsibility (as detailed in Section 6.3). New standards for
safety and reliability were also introduced, and contracts could
also be terminated for poor performance. Three distinct types of
contract have been tendered since 1985: Gross Cost Contracts,
between 1985 and 2000; Net Cost Contracts, between 1995 and 1998;
and Quality Incentive Contracts, from 2000 onwards
which are detailed further below.
4.2. Privatisation
In preparation for the proposals of the government of the time to
privatise LBL, the company was divided up geographically into 13
subsidiary companies. The subsidiaries competed with private bus
companies for tendered contracts. To allow for a controlled
programme of tendering, until routes were tendered the subsidiary
companies were funded by a „block grant‟ agreement to cover the net
cost of those services. To allow for privatisation, it was
necessary to put in place formal contracts for each route. This
meant that after privatisation the tendering programme could
continue, allowing all routes to be subject to competition.
Government policy at the time was to transfer risk to the private
sector, so it was decided that these “block grant” agreements
should be on a net cost basis. This shifted the revenue risk to the
operators but it also gave them the incentive to generate more
revenue by increasing the quality of the service provided. These
net cost contracts were initially not subject to competition as the
routes were allocated to each subsidiary and the terms of the
contracts were agreed by negotiation. The length of these contracts
varied, to give each company a reasonable forward order book, and
to allow the network to be tendered over a reasonable timescale.
This process is still represented by the current tendering
programme.
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The process of transferring risk to the private sector continued
from 1996 with the introduction of tendered Net Cost contracts,
which whilst similar to the Gross Cost contracts (described in
Section 4.1 above) transferred the revenue risk to the operator.
Contracts were awarded under both Net Cost and Gross Cost terms to
deliver the best value to London Transport. In 1994 the LBL
subsidiaries were privatised, either through Management Buyouts or
through sales to larger bus operators from outside London. The
Tendered Bus Division was merged with other sections such as the LT
Planning bus sections to form London Transport Buses. Following the
creation of devolved government for London in 2000, under the Mayor
and the Greater London Authority, London Transport Buses became
London Bus Services Limited (London Buses), a part of Transport for
London (TfL).
4.3. Present Contracts
In 2001, Quality Incentive Contracts were introduced to replace
Gross Cost and Net Cost contracts as routes were tendered. These
contracts are a development of previous contracts, but with direct
financial incentives for operators linked to the quality of
service. The contracts are an extension of the gross cost model
insofar as TfL retains the revenue. By the late 1990s, the
proportion of the scheduled mileage being operated had become more
satisfactory. However reliability of all services – the regularity
of buses on high frequency routes, and the adherence to the
published timetable on low frequency routes - was still a cause for
concern. Whilst each route already had a reliability benchmark
called the Minimum Performance Standard (MPS), the older Net Cost
and Gross Cost contracts had no financial incentive to achieve
those targets. Further details of how Quality Incentive contracts
work are given in Section 6.
4.4. Tendering and Contracts - Key Features
The key features of London Buses‟ tendering and contracts system
can be summarised as follows: Contracts are designed to provide
incentives to operators to improve quality Routes are generally
tendered individually, but often at the same time as other routes
in the same area to facilitate service changes. Contracts are
normally for 5 years, with a potential 2 year performance related
extension available to the operator It is a continuing programme of
tendering, with between 15% and 20% of the network typically
tendered each year. Tender evaluation is based on best value for
money, taking into account quality and safety as essential features
Contract payments are related to the mileage operated and overall
reliability of the service Comprehensive quality measurements are
used across all aspects of delivery.
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5. The Tendering System In London
London Buses reviews every route prior to tender, and takes into
account views from statutory consultees including London
TravelWatch, London boroughs and other interested parties. This
information is used to provide a service specification, which
details: the route the buses will take (including the terminal
arrangements), the frequency of the service at different times of
the day & the week (including the first and last bus times),
the type and capacity of vehicles to be used the Minimum
Performance Standard.
Operators are then asked to provide a schedule to deliver the level
of service specified, and the total cost plus profit margin for
providing the service to the specification.
5.1. European Procurement Directives
Bus service procurement activities are subject to the European
Union‟s Procurement Directive 2004/17/EC of 31st March 2004 for
utilities contracts. This directive has been implemented into UK
law via the Utilities Contracts Regulations SI 2006 No. 2911. These
regulations are principally concerned with ensuring that the
procedures followed allow for fair competition within the EU. LBSL
complies with the EU Directive and UK Procurement
Regulations.
5.2. Approved Contractors
London Buses operates a pre-qualification system to maintain an
approved supplier list and routinely publishes advertisements in
the Official Journal of the European Union (www.ojeu.com) seeking
expressions of interest. Once a potential operator has expressed an
interest, we will make contact with them, discuss the situation and
then issue a pre-qualification questionnaire. When a completed
questionnaire is returned, a „desk-top‟ evaluation is undertaken.
This includes an assessment of areas such as the financial
stability of the company, health and safety and previous experience
in the transport or services sector. Where appropriate visits and
meetings are arranged. If the initial assessment is acceptable, the
organisation will be added to the approved supplier list for bus
services. This does not necessarily mean that the organisation
meets all of the requirements to be awarded a contract, but that it
meets the basic conditions to be considered further. The
organisation may then be able to submit a dummy bid, which will be
assessed using standard evaluation principles and feedback given to
assist future genuine submissions. The approved operator will be
issued with a Bus Services Framework Agreement which includes full
details of the contractual requirements, and a Master Invitation To
Tender which includes a guide to submitting tenders. Award of any
contract is conditional on the signing of the Framework
Agreement.
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When approved, the operator will be notified of all bus service
tendering opportunities, and asked to confirm if it wishes to be
issued with the documentation for each tender on a route by route
basis.
5.3. Tendering Programme
London Buses has a continuous programme of tendering with
Invitations to Tender (ITT) being issued throughout the year. The
rate of tendering is about 15% to 20% of London‟s bus network each
year (circa 90-120 routes, depending on the number of performance
related extensions) with ITTs typically issued every 2-4 weeks. The
annual tendering programme for each financial year is issued to all
approved suppliers, and the latest version is available on the TfL
website.
5.4. Types of Route Tendered
Services range from routes which require only one bus, through low
frequency midibus routes up to high frequency 24-hour double deck
routes. There are also dedicated school bus routes. Rail
replacement services are secured on behalf of London Underground –
you can find more information in Section 5.9 below. Route size
varies significantly, with Peak Vehicle Requirements (PVR) ranging
from 1 to over 50. Services are classed as either High Frequency (5
buses or more per hour throughout much of the week) or Low
Frequency (4 buses per hour or less), and about 82% of the network
is High Frequency. The highest frequency routes have a bus every
2-3 minutes, and the lowest frequency have a single return journey
per day. Most routes operate from about 0430 until after midnight,
but an increasing number of routes run 24 hours per day. Some
additional „nightbus‟ services only operate between about midnight
and 04:30.
5.5. Types of Vehicle Utilised
Vehicles used on contracted services range from small midibuses
through to 87 capacity double deck buses, depending on the specific
requirements of each route. London Buses specifies the minimum
requirements for the vehicles within the tender documentation. The
operator may choose the vehicle manufacturer as long as the
vehicles meet all of the criteria in the vehicle
specification.
5.6. Service Specification
London Buses specifies the terminals, routeing, frequency and
operating times of the route. It gives an indication of current
running times and any significant problems identified with these
running times. It also provides current performance & minimum
standards required by the new contract. Compliant tender
submissions are evaluated against this specification.
5.7. Tender Information and Response
All tenders are submitted on a sealed bid basis with all the
relevant information that is required by London Buses for the
evaluation. Each submission must have a compliant bid, but
operators may put forward alternatives that they believe would have
benefits to passengers and/or
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London Buses. Alternatives may include options such as use of
existing vehicles or variations to the service structure such as
routeing or frequency.
5.8. Tender Evaluation
The overriding principle applied throughout the tendering process
is one of fairness to all parties. Contracts are awarded with the
intention of achieving the most economically advantageous outcome
within the resources available to London Buses. The criteria used
include (in no particular order, and are not limited to): Price
Ability to deliver quality services - to at least the levels
specified in the ITT Staffing – ability to recruit, train and
retain staff of a suitable calibre Premises – status of depot,
and/or ability to obtain a suitable depot Vehicles – type proposed
and any additional features offered. This includes ability to
maintain vehicles in an acceptable condition through the life of
the contract Financial Status – the resources to fund the start up
costs and provide stability over the contract term Schedules –
compliance with the specifications Health and Safety Policy and
records Sustaining competition for tendered routes
Tender evaluation is lead by the Contracts Tendering Manager and is
carried out by a small team of skilled technical and commercial
staff. Recommendations for contract awards are discussed and
approved by the Tender Evaluation Committee, which is comprised of
the directors of London Bus Services Ltd. During the evaluation,
Contracts Tendering managers may contact bidders to clarify any
areas of uncertainty and if considered necessary for commercial or
technical reasons may enter into further negotiations with
shortlisted tenderers. Unsuccessful tenderers are offered a debrief
to explain why their bid was not successful.
5.9. Rail Replacement Bus Services
London Buses procures rail replacement services on behalf of London
Underground. Planned services range in scope from one or two
vehicle early morning and late evening journeys through to weekend
closures requiring 50+ vehicles, and longer term arrangements
during major upgrades of lines and stations. Over one hundred
contracts are tendered in a typical year, most of which are for
weekend closures so buses used on the main bus network during the
week are generally used. The tendering process is similar to that
used for network bus services. A separate Framework Agreement
exists for rail replacement contracts, but they are tendered under
the same legislative procedures as bus services. The
prequalification procedure is similar to that described in Section
5.2.
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To ensure high standards, contracts for most rail replacement
services are operated by companies that also operate London Buses‟
main network contracts. Sub-contracting to operators that are not
pre-qualified is not normally permitted. London Underground
identifies the scope of the specific rail closure and a strategy
for rail replacement is agreed with London Buses. Where a dedicated
rail replacement service is required, a specification is produced
and pre-qualified operators are invited to tender for one or more
periods of closure. If the same closure occurs again within a year
of the original tender, London Buses may invite the successful
tenderer to operate the service again at the same cost. Emergency
London Underground rail replacement services following major
service disruption are also managed by London Buses. National Rail
operators, London Overground and DLR make their own arrangements
for replacement services.
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6. Quality Incentive Contracts
Quality Incentive Contracts were introduced in 2001 and have
delivered significant improvements in service quality and passenger
numbers. These contracts are based on gross cost contracts but also
contain incentive provisions in the form of performance payment
bonuses & deductions and the option of a two year contract
extension. The routes/contracts are tendered for an initial period
of five years and when awarded contain a specific Minimum
Performance Standard (MPS) which will generally be fixed for the
life of the contract and which reflects the particular
characteristics of the route. The contract price is adjusted each
year in respect of inflation on the anniversary of the deadline
date for tender submission. A formula which is designed to be
representative of the actual movements in the cost base using a
number of indices (e.g. labour rates, the Retail Price Index and
fuel costs) is used to calculate these adjustments
6.1. Incentive Provisions
In addition to the requirement to operate the scheduled mileage
three further incentive provisions exist within the Quality
Incentive Contract. The original two provisions are performance
payments based on the reliability of the service and contract
extensions. From 2008, a second generation of performance payments
has covered driving quality and is expected to be extended to cover
vehicle condition from 2009.
6.1.1. Reliability Performance Payments
These are calculated on an annual basis by comparing the Operator‟s
annual reliability performance on each route against the contracted
MPS. Payments are based on a graduated scale with an increase or
decrease in the payment for every whole 0.10 minute change in
Excess Wait Time (EWT) for High Frequency routes and every whole
2.0 percentage point change in percentage On Time for Low Frequency
routes. Bonus payments are paid at a rate of 1.5% of the contract
price for each step above the standard. Deductions are made at a
rate of 1% of the contract price for each step below the standard.
Bonus and deduction payments are capped at 15% and 10% respectively
of the contract price.
6.1.2. Contract Extensions
Under the terms of the contract an Operator is entitled to an
automatic two year extension of the contract if it meets or exceeds
the reliability “Extension Threshold” criteria set in the tender
documentation for that route. This reliability threshold is
slightly higher but related to the reliability MPS. Where a route
qualifies for an extension, it is offered on the basis of the
current contract provisions. The operator can choose to accept or
reject the contract extension. If the operator declines to accept
the extension, the route is tendered in the usual manner. If the
extension is offered, the route is withdrawn from that year‟s
tendering programme, and is tendered two years later.
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A small minority of routes are not operated under full incentive
mechanisms (e.g. stand alone night routes, school services and
other very low frequency services) because the resources required
to monitor the reliability are out of proportion with the scale of
the route. Furthermore some routes may operate under partial
incentive provisions e.g. Performance Payments may be applicable
but contract extensions may not be available for routes funded by
some third parties. These are detailed in each ITT.
6.1.3. Quality Performance Payments
Building on the success of the earlier reliability incentive
schemes, a second generation of payments based on driving quality
(including customer service) and the presentation of vehicles
(internally and externally) is being introduced. A combination of
Mystery Traveller Surveys (whilst the bus is in service) and
vehicle inspections (at terminals) throughout the day assess these
aspects of service, and provides scores for each bus garage. These
scores lead to payments or deductions against a network wide
standard rewarding those companies which achieve higher levels of
performance.
6.2. Minimum Performance Standards
The primary objective of bus operators is to safely operate all of
the scheduled mileage and adhere fully to the level of service
shown in the published timetable. London Buses sets specific MPS in
respect of the quality of service to be provided. The measurement
criteria for reliability used depend on whether the route is
designated High or Low frequency, and are detailed further in
Section 7.4. The specific reliability standard for each route
depends on a set of consistently applied criteria, including the
length and average journey time of the route, the type of areas it
serves (such as congested town centres) and recovery time available
at termini. The standards for driver quality and vehicle
presentation are London wide.
6.3. Payment Adjustments for Service Reliability
Whilst operators are expected to operate the full contracted
service this is not always possible for various unpredictable
reasons, including mechanical breakdowns, staff sickness,
roadworks, road closures and other incidents on or near buses.
London Buses specifies an acceptable minimum performance standard
for mileage operated for each route. Any mileage that is not
operated can be split into two categories: “Deductible Lost
Mileage” (mileage not operated but considered to be within the
Operator‟s reasonable control i.e. staff absences, mechanical
breakdown); and “Non Deductible Lost Mileage” (beyond the
Operator‟s reasonable control i.e. adverse traffic
conditions).
Operators are not paid for any mileage not operated under the
category of “Deductible Lost Mileage”, and a deduction is made in
proportion to the
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annual contract price and scheduled mileage. Deductions are not
made for “Non Deductible Lost Mileage”, although poor performance
in this area is kept under review.
6.4. Contract Payments and Revenue
London Buses operates on the basis of 4 week accounting periods,
with 13 periods each year running from April to March. Contract
payments are made by BACS. 75% of the contract price is paid during
the relevant period. The balance, less deductions for Deductible
Lost Mileage, is paid at the end of the following period. Payments
(and deductions) under the reliability incentive scheme are made
annually, and for the more recently introduced driving and vehicle
quality incentive schemes quarterly.
6.5. Summary of Responsibilities
The contractual and tendering system places responsibilities on
both London Buses and operators. London Buses, or its third party
contractors: Determines and runs the tendering programme Determines
the route Specifies the frequency Sets and monitors quality and
safety standards Sets vehicle capacities and minimum standards
Agrees the schedule prepared by the operator Sets fares and retains
the revenue Supplies and maintains ticket machines Provides revenue
protection (on-bus revenue protection inspectors) Supplies and
maintains radio and vehicle tracking equipment Provides and
maintains bus network infrastructure (bus stops, stands and bus
stations) Provides an emergency communication facility (CentreComm)
24 hours a day Provides roadside staff to deal with diversions and
major incidents 24 hours a day Markets the bus services to the
public Manages liaison with local authorities and other
stakeholders Coordinates public customer service contacts –
complaints, comments and compliments Invests in major network and
infrastructure projects.
The Operators: Develop and submit bids Develop timetables,
schedules and staff rotas – timetables must be agreed with London
Buses Provide and maintain premises and vehicles Recruit, train and
mange sufficient staff of a suitable calibre Manage the day to day
operation of routes
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Provide day to day supervision of routes, to maintain quality and
deal with disruption Control the use of passes and collect any cash
revenue on buses Comply with UK statutory and regulatory regimes,
including Operating Licenses Provide data that is reasonably
required by London Buses.
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7. Measuring Quality of Performance
7.1. Targets
The Mayor and the TfL Board set performance targets for London
Buses within TfL‟s Business Plan.
7.2. Monitoring Systems
London‟s Buses have seen a considerable increase in quality
standards since 1990, and continually seeks to maintain year on
year improvements to the service provided to passengers. To do
this, there are a number of performance monitoring systems in
operation, in addition to any other system operators may use for
their own management processes. The data obtained by London Buses
is normally shared with the appropriate operator, and network level
data is also published for many measures, and is normally available
on TfL‟s website. London Buses tries to avoid duplicating the
monitoring systems of other UK organisations. The current
measurements and monitoring are as follows:
7.3. Mileage Operated (excluding traffic and other non deductible
losses)
This measure is used as an incentive by London Buses, as deductions
from contract payments are made for mileage that is lost for
reasons that are reasonably within the control of the operator.
These include non availability of staff and vehicles not being
mechanically fit to be used on the road. This has shown a vast
improvement over the last 10-15 years.
7.4. Reliability
This forms part of the assessment of an operator‟s ability to
schedule, control and adjust services. It also forms the basis of
financial bonuses and deductions on incentivised contracts. The
roadside surveys to collect this data cover approximately 3-5% of
the service, although it is anticipated that vehicle tracking
technology will gradually replace the current human observations.
The measurements are different for high and low frequency
routes:
7.4.1. Regularity on High Frequency services
On services that are defined as High Frequency – five or more buses
per hour throughout most of the week – London Buses measures the
interval between buses and compares it to the advertised frequency.
The aim is to ensure that the buses are evenly spaced, and that on
average a passenger should not have to wait for longer than half of
the advertised frequency. On High Frequency routes, it is
considered that passengers can “turn up and go” as the waiting time
should be relatively short and the timetable is less important. The
measure is expressed as “Excess Wait Time” (EWT), which is defined
as the extra time that passengers have had to wait above the
expected waiting period. The objective is to reduce EWT to
zero.
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Additionally, „long gaps‟ in service are measured, which tend to
indicate more fundamental problems such as cancelled buses,
curtailments and poor service control leading to „bunching‟.
7.4.2. Punctuality on Low Frequency services
On Low Frequency routes - four buses per hour or less throughout
most of the week – London Buses measures how close the departure
time from the stop is to the advertised timetable. On these routes,
the timetable is more important as passengers are more likely to
rely on the published departure time when planning their journey.
The measure is expressed as a percentage of departures that are “On
Time”. On Time is a window from 2½ minutes earlier than expected to
five minutes later than expected. The objective is to increase “On
Time” departures to 100%. Additionally the percentage of journeys
running “Early” is also monitored, where early is defined as a bus
departing between 2½ and eight minutes ahead of the schedule. It is
normally considered that there is little excuse for early running,
as passengers may not have arrived at the stop.
7.5. Driver and Vehicle Quality Monitoring
The Driver and Vehicle Quality Monitoring Programme provides robust
and actionable data on which to base financial incentives to bus
operating companies to improve performance (as detailed in Section
6.1.3 above). The programme builds on earlier Mystery Traveller
Surveys and objectively monitors service quality and compliance
with contractual requirements utilising auditing and „mystery
shopping‟ survey techniques to measure pre-defined, key aspects of
service delivery. The research is conducted on London Buses‟ behalf
by a leading market research agency, and comprises two compatible
surveys: Static audit of buses in service assessed at bus stands to
evaluate „fixed‟ aspects of service delivery (e.g. etching,
graffiti, structural damage and in-grained dirt). Around 17,000
surveys are carried out per annum. Mystery shopping surveys whilst
the vehicle is in service to assess vehicle handling, customer
interaction and aspects of the vehicle affected by buses being in
service. Around 33,000 surveys per annum are carried out.
The data is collated and following a quality assurance process is
shared with the operators so that they can take action to address
any areas of weakness that are identified. The results are used by
London Buses to generate the payments (or deductions) under the
driving and vehicle quality incentive regime.
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7.6. Driver Quality Monitoring
This is a separate independent survey carried out by London Buses‟
specialist contractor which covertly undertakes over 6,500
assessments each year across the London Bus network to assess
driving skills. It differs from the assessments detailed in Section
7.5 by focussing as much on the technical ability of the driver –
such as use of mirrors and lane discipline - as it does on
passenger consideration. For each assessment, a driver receives a
graded score for a series of measures such as speed, road position
and braking and there are over twenty categories per assessment.
This level of monitoring is rare, in that most employers of
professional drivers undertake no such monitoring of their staff,
and manage their professional drivers solely on the basis of claims
or accidents. A combination of initiatives has led to a steady
improvement in the scores in the recent past.
7.7. Engineering Quality Monitoring
London Buses‟ independent contractor undertakes regular checks on
the maintenance procedures and mechanical condition of the vehicles
used on its contracts. This is undertaken by a thorough examination
of about 25% of each operator‟s fleet throughout the year, similar
to an „MOT‟ test for cars. The examinations are conducted by
trained staff working to the same criteria. Any defects are noted
and given a score, with higher scores for more serious defects. The
key measure is the average number of points per vehicles, with a
target of zero. The monitoring also includes the maintenance
procedures, and the operators‟ vehicle pass rate at annual
test.
7.8. Customer Satisfaction
There are three London Buses Customer Satisfaction Surveys (CSS),
focusing on Bus Services, Night Buses and Bus Stations which have
been undertaken since 1997. These enable London Buses and bus
operators to monitor customers‟ satisfaction with the quality of
services provided and identify areas for improvement. Face-to-face
interviews are conducted with passengers alighting from buses.
Questions relate to the journey that has just been made including
overall satisfaction with journey just made, information, safety
and security, cleanliness, reliability and staff behaviour.
7.9. Public Correspondence Data
London Buses collates all public communications made by phone,
email or letter. This data is analysed at route level on themes
including driving standards. This helps London Buses to understand
and address specific concerns.
7.10. Contract Compliance Audits
To ensure that operators comply with the specifications in the
contract, London Buses‟ Contract Compliance team make regular
visits to all operating garages. These audits help to ensure that:
there are sufficiently rigorous administration systems in place to
handle and account for on-bus revenue and London Buses owned or
managed equipment. They also ensure that lost
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mileage is reported correctly so that the correct contract payments
are claimed; and that drivers comply with working time and driving
time legislation.
7.11. Other Sanctions and Remedies
Operators‟ performance is regularly reviewed by senior London Buses
staff. They examine a range of indicators, including mileage
operated, reliability, driving and engineering standards as well as
the measures detailed above. Unsatisfactory performance is
discussed with individual operators, and if necessary operators may
be required to produce and implement action plans to resolve
performance issues. Current and past performance is taken into
account in the evaluation of tenders and recommendation for award
of new contracts. London Buses usually resolves any performance
issues through normal contract management. However if performance
continues to be poor and it is considered that it cannot be
resolved by other means, as an ultimate sanction London Buses
retains the right to terminate any contract.
7.12. Safety
A range of data is used by London Buses as part of the assessment
of an operator‟s ability to provide a safe service and failure can
result in the loss of a contract. Unsatisfactory performance can
also lead to the failure to win new contracts. The incentive is not
directly related to payments/deductions due to the importance of
avoiding the suggestion that safety of operation is in any way a
negotiable trade off against cost. Safety is not generally measured
against „front line‟ passenger experience, but from an insight into
an operator‟s standards. Much of the work is based on visits to
operating premises and interviews with operational staff. These
include checks on policies, procedures and risk assessments. These
visits are followed by a report highlighting areas of concern and
an action plan. This plan is then reviewed and forms the basis of
the next inspection. In addition to Driver and Engineering Quality
Monitoring, as described above, operators provide data regarding
all accidents and incidents which occur whilst a bus is in service.
This information is collated and analysed by London Buses.
7.13. Passenger & Staff security
The entire London Bus fleet is fitted with CCTV and recording
equipment. This is used to identify individuals who commit
offences, against both other passengers and the vehicle. It can
also be used to assist in the investigation of injury and insurance
claims.
London Buses operates a central communications facility,
CentreComm, and each bus is fitted with a two-way radio system
which allows drivers to issue an
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emergency call if they require assistance. The radio system is
otherwise used to communicate information about disruptions to
service. TfL funds the Transport Operational Command Unit, a
dedicated team including staff from the Metropolitan Police which
is in place to deal with surface transport related policing issues,
which includes enforcement of bus lanes, supporting revenue
protection operations and investigating and prosecuting fare
evaders.
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8. Environment
8.1. London Buses and the environment
Environmental issues are of increasing concern in London, with much
of the debate focused on transport. TfL is committed to minimising
harm to the environment. The provision of a comprehensive, safe and
efficient public transport network in Greater London (including the
bus network) is an important element. TfL complies with the
relevant environmental legislation, and follows the Mayor‟s Air
Quality Strategy, which specifies key objectives for London‟s bus
fleet.
8.2. Lowering emissions
Tenders for bus services specify that new vehicles should be to the
latest legal European emissions standards, and operators are
encouraged to introduce higher standards sooner than required.
Buses on the London Bus network have a minimum standard of Euro 2,
and are fitted with Diesel Particulate Filters which reduce the
levels of fine particles, oxides of nitrogen and hydrocarbons in
exhaust gases by over 90%. It is also recognised that driving
techniques can reduce emissions, and this is included within the
BTEC training for bus drivers (see Section 9.3). London Buses is
also trialling the latest advances in vehicle technology, including
hydrogen fuel cell buses which have no polluting emissions on the
road. Diesel-electric hybrid buses (which are powered by batteries
that are charged by regenerative braking and smaller engines, which
produce lower emissions than a full size diesel engine) are being
trialled more widely, and if successful will be phased in across
the bus network from 2012.
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9. Current and Future Initiatives
9.1. Smartcards and Cashless Buses
Oyster is TfL‟s travel smartcard. Passengers can put their period
“Travelcard” or “Bus Pass” season ticket on it, add electronic
travel value to pay as you go, or have a combination of both.
Oyster cards are also reusable. This means that when the season
ticket expires it can be replaced on the same Oyster card, and when
electronic travel value runs out, it can just be topped up. London
Buses is attempting to reduce the number of cash transactions on
buses, to speed up boarding and improve security and drivers‟
safety. A number of busy routes and areas already have cashless
boarding – passengers need to have a season ticket, an Oyster card
or to purchase a ticket from the roadside ticket machine before
they board the bus.
9.2. Bus Priority
The bus priority team develop and deliver highway and traffic
management schemes to improve journey times and service reliability
for bus passengers. These schemes include bus lanes, junction
improvements and traffic signal priority. This involves working
with other parts of TfL Surface Transport and the London boroughs.
Some schemes are individual local projects to deal with a specific
local problem. In other cases schemes for entire bus routes or
network corridors are introduced. These measures improve bus
reliability, protect bus passengers from excess delays and
facilitate improvements capacity of bus services.
9.3. Bus Driver and Service Controller Training
Raising training standards and achieving greater consistency in the
training of front line bus operating staff is a key objective for
London Buses. To help achieve these aims, London Buses commissioned
two bespoke BTEC qualifications in consultation with bus operators,
training providers and trades unions. The two qualifications (one
aimed at drivers, the other aimed at service controllers) were
developed in conjunction with Edexcel, the examinations award body.
Both qualifications have been designed so that the staff taking
them are able to demonstrate their ability to do their job
competently and to a consistent standard across the London bus
network. The degree of assessment required and paperwork associated
with the qualifications has been kept to the minimum, but it still
allows staff to show what they are capable of and what they
understand about the industry they work in. Responsibility for
delivering the training rests with the individual bus operators. At
the end of the training, provided the candidate has successfully
met all of the assessment requirements, they will achieve their
BTEC qualification.
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9.4. iBUS
iBus is the latest radio and Automatic Vehicle Location (AVL)
system for buses. It ensures that the service controllers at
garages know the exact location of all buses fitted with the system
at all times. Using a combination of technologies, including
satellite tracking and GPRS data transfer, iBus keeps track of
where London‟s buses are, allowing bus controllers to regulate
services to make them more reliable. Thanks to on board „next stop‟
audio-visual announcements, passengers know where their bus is,
even if they‟re on an unfamiliar route. They will also benefit from
more reliable real-time information on Countdown signs at bus
stops. CentreComm – London Buses‟ 24/7 Emergency Command and
Control Centre – will be able to use the on-bus PA system to
communicate directly with passengers in the event of an emergency.
Another benefit to passengers is that in case of the driver making
emergency radio contact following an accident or emergency,
CentreComm will immediately be able to pinpoint the precise
location of a specific bus, so any necessary assistance can be
despatched immediately.
9.5. Countdown
Countdown is the name of the real-time display information at 2000
selected bus stops that predict the arrival time for buses. As the
iBus project unlocks the full potential of Countdown, displays will
be replaced and additional displays installed at more stops across
the network.
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10. More Information and Contacts
The information in this booklet is based on the latest details
available at the time of publication in December 2008. More
information about bus services in London can be found on TfL‟s web
pages, including the latest performance trends and latest tendering
programme. Relevant links to these and other sources of information
are listed below, along with other contact details.
10.1. Links
Current information about The Mayor, GLA, TfL and London Buses can
be found by following links within the following websites:
www.london.gov.uk
www.tfl.gov.uk Information covering the UK and EU legislative
framework can be found within the following sites:
www.dft.gov.uk
www.ojeu.com Specific links have not been given, as updates often
change them.
10.2. Contacts
If the information you require is not available from the TfL web
pages, or if you would like to apply to become an approved
operator, please write to: Contracts Tendering Manager London Bus
Services Ltd The Palestra Building (10Y3) 197 Blackfriars Road,
Southwark, London SE1 8NJ TWC 2/2/8
Damn... My middle finger very tired le, from scrolling.