Case Study: Procurement Strategy Review for a Major UK Gas Company – Optimising Traffic Management Contracts

14 Jan

Posted by: Adam Woolley

Category: Case Studies

Large gas company case study image highlighting procurement transformation and commercial value delivery.

The client is a major UK gas distribution business responsible for maintaining a wide-reaching pipeline network and delivering critical works across several regions. Operating within a regulated environment, the organisation relies heavily on effective procurement strategies to manage cost, performance, and supplier accountability.

A major UK gas company was experiencing rising costs and delays across its roadwork contracts, particularly within traffic management and reinstatement. Although the company had drafted a new procurement strategy to consolidate suppliers and adopt a regional contracting model, it required an expert review to ensure commercial viability and compliance with public sector procurement regulations.

Barkers completed a comprehensive assessment and provided a set of short, medium, and long-term recommendations designed to improve contract performance, enhance supplier accountability, and minimise supply chain risk. These included alternative contracting models, commercial mechanisms to incentivise performance, and practical steps to strengthen collaboration with suppliers.

Challenge

The client, responsible for operating and maintaining a major gas distribution network across five UK regions, was struggling to control both spend and project timelines on roadworks contracts. Two areas — traffic management and backfill and reinstatement — were particularly prone to overspend and delays.

A key driver of these issues was supplier fragmentation. With a large number of contractors involved in each project, no single supplier had end-to-end accountability, making it difficult to manage performance or ensure commercial control.

To address this, the client developed a new procurement strategy focused on reducing the supplier base and transitioning to a regional contracting structure. However, before implementation, they required Barkers to review the strategy to determine:

Whether it was commercially viable based on the existing contracts and frameworks
Whether it complied with public sector procurement guidelines
How the strategy could be refined to maximise performance and minimise risk

Solution

Barkers conducted a detailed review of the strategy, including a region-by-region assessment of commercial feasibility. This involved analysing more than 20 existing contracts and undertaking a comprehensive commercial risk and opportunity assessment to evaluate the supply chain and future requirements.

We explored alternative contracting options to improve accountability and outcomes. The existing framework had no volume commitments, incentives, or penalties — limiting the client’s ability to drive supplier performance. After assessing various models, we recommended implementing a pain-gain share mechanism that would reward suppliers for meeting SLAs and penalise underperformance.

Our team also worked closely with internal stakeholders — including Commercial and Procurement teams — to explain the rationale behind our recommendations, outline the contracting changes required, and ensure they had the capability and clarity to implement the revised strategy effectively.

Results

Barkers provided a comprehensive report outlining findings, strategic insights, and actionable recommendations, alongside a tailored presentation to key internal stakeholders.

Key outputs included:

A detailed explanation of the proposed pain-gain mechanism and a draft contractual clause to integrate into future contracts
Short-, medium-, and long-term roadmaps highlighting risks, mitigation strategies, and implementation steps
Recommendations for several regions to conduct immediate ‘mini-bid’ processes to secure value ahead of framework expiration

The expected impact of adopting the new approach includes:

A smaller, more accountable supplier base, enabling better oversight of cost, performance, and behaviours
Improved commercial leverage and more favourable contract terms due to increased supplier volume and market share
Enhanced ability to manage project timelines and minimise overspend through clear incentives and performance-driven mechanisms

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Procurement Strategy Review for a Major UK Gas Company – Optimising Traffic Management Contracts – Case Study

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Tags: Adam Woolley, Procurement Services - Case Studies, Utilities - Case Study

Author: Adam Woolley