WELCOME TO THE SOUTHERN CONSTRUCTION FRAMEWORK

CONTRACTOR BRIEFING EVENT

23RD April 2014

Welcome

Jon Williams

Chair

Todays Agenda Time Agenda item Presenter

9:30 Welcome and Introductions Jon Williams

9:45 How did we get here Keith Heard

10:00 The National Picture on frameworks Keith Heard

10:15 The New SCF Framework Chris Cook

11:00 Refreshment Break

11:30 The SW Lot Jon Williams

11:45 The SE Lot Keith Heard

12:00 The London Lot Dave Mulford

12:15 Summary and Recap Jon Williams

12:30 Questions

13:00 Close

Todays presenters

Chris Cook SCF Project Manager

Keith Heard Programme Manager (Hants CC)

Jon Williams Procurement Manager (Devon CC)

David Mulford Procurement Manager (Haringey )

Alex Iles EXOR/ Santia

How did we get here?

Keith Heard

2005 – 2014

Before

• Lowest quoted price

• Wasteful bid process

• Late appointment

• Adversarial

• No integration of the

team

After

• Total cost

• Visible supply chain

• Early contractor input

• Partnership and

collaboration

• Outcome focus

• Predictability

The history

• 2006 – SECE / iESE Generation 1 (grant funding)

• 2009 – CFSW Generation 1 (grant funding)

• 2009 – NIEP (CLG funded)

• 2011 – Government Construction Strategy

• 2011 – iESE Generation 2 (self funding)

• 2012 – LCP strategy launched

• 2013 – CFSW Generation 2 (self funding)

• 2014 – Government New Models of procurement

• 2015 – Convergence

Why a Framework

• OJEU compliance

• Join up projects into programmes of work

• Long term relationship

• Shared learning

• Efficiency and productivity

• Predictability

Operating Model

• Efficient value based appointment

• Minimises non-productive effort

• Brings skill early to projects

• Outcomes measured

Dev

elo

pm

en

t w

ork

stre

ams

Act

ive

man

agem

ent

Use of frameworks

iESE Generation 1 51 users 220 projects £1.6bn

iESE Generation 2 45 users 160 projects £1bn

CFSW Generations

1 and 2

31 users 99 projects £380m

Sectors supported

Contractor Early Engagement

Why engage early?

£0.00

£100,000.00

£200,000.00

£300,000.00

£400,000.00

£500,000.00

£600,000.00

£700,000.00

£800,000.00

£900,000.00

£1,000,000.00

A/B C D E

Sa

vin

gs

Ge

ne

rate

d

RIBA Stage

Contractor Added Value

SAVE Commercial

SAVE Added Value throughearly engagement

Procurement Saving

Construction Cost Predictability

75% within 5% of cost plan

40 records

The National Picture on Frameworks

Keith Heard

National Association of Regional Frameworks

Regional Frameworks are delivering

2,000 projects

£4bn

250 public authorities

Police Fire and

Prison

Sports and Leisure

Regional Frameworks deliver……… • Sustainable efficiency savings;

• Reduction in consultancy and construction costs;

• Projects closer to target cost and time;

• Reduction of disputes, claims and litigation;

• High client satisfaction rates;

• High proportion of value of work undertaken by SMEs

• High proportion of local labour and sub-contractors;

• High take-up of government initiatives e.g. Fair Payment, Apprenticeships, Localism etc;

• High proportion of construction, demolition and excavation waste diverted from landfill;

• Good Health and Safety performance against national average;

• Integration of the supply team.

NACF Supports Government Construction Strategy

Government Construction Strategy NACF Publication Construction Pipeline & Cost Benchmarks

Trial New Procurement Models

Building Information Modelling (BIM) / Gov Soft Landings

Fair Payment Charter / Project Bank Accounts / SME’s

Effectiveness of Frameworks

Pre-Qualification: PAS 91

Performance Management

What does the NACF do? • Advocacy Who is doing what, where and when

Sharing of knowledge and best practice

Central point of contact for central government

Management and Measurement Contractor workload and performance

Visibility of future pipeline of work

Benefits, efficiencies, local economy

Innovation and development Benchmarking

Best in class design, procurement and delivery

A National cost database

A Government Perspective

Peter Groves

Cabinet Office

Government Construction Strategy

UNCLASSIFIED

Government Construction Change Programme

UNCLASSIFIED

Government

Construction Strategy

Industrial Strategy for

Construction

Joint vision to 2025

setting out aspirations

Infrastructure Cost

Review

Green Construction

Board

Government Construction Strategy: Objective

Overarching target:

• Achieve a sustainable 15-20% reduction in the

cost of construction by the end of this parliament

(“Sustainable”: without adversely impacting either whole life value or

the long term financial health of the construction industry)

Already delivering across Central Government:

• FY 2011/12: £72m; FY 2012/13: £447m

• First Half of FY 2013/14: £293m

• Some already achieving 15-20% vs FY 2009/10

UNCLASSIFIED

To achieve 15-20% savings….

…leading public & private practitioners do the following:

• Leverage data – identify opportunities / inform decisions

• Standardise requirement

• Aggregate demand

• Engage with lower tiers

• Commit spend – promote supply chain investment in efficient delivery

• Create integrated client and supplier teams – minimise process

waste

Frameworks have the potential to deliver against all of these initiatives

remove waste / maximise

buying power }

UNCLASSIFIED

Task Group 1 Procurement Lean Client Report recommended.....

UNCLASSIFIED

• The Task Group report, which covered a number of aspects of Construction Procurement,

can be found at the hyperlink below

•https://www.gov.uk/government/publications/government-construction-task-groups

•It showed at Appendix 1 a range of NIEP frameworks that were currently available at that

time.

• It also showed at Appendix 2 the Framework characteristics that could deliver the 15-20%

savings that the government construction strategy was seeking;

• And finally, at Appendix 3 page 114, it evidenced Performance criteria from the NIEP

frameworks.

• It is clear from the report that the Government Construction strategy supports, a well

planned and executed framework, and if continuous improvement is delivered from

‘Lessons Learnt’ on the existing framework then the replacement will succeed in delivering

a cost effective service which will deliver significant savings.

Click on Icon to review report

Summary of Objective 3 of Task Group Report

Objective 3 – Effectiveness of frameworks

• Framework agreements allow clients to select a number of companies, entering into an

agreement with them to deliver a series of projects over a set period of time.

• The Government Construction Strategy recognizes that such arrangements can be highly

effective, yet also highlights the fact that experience of some public sector framework

agreements is less positive. In particular there are concerns that such agreements can act as a

barrier to the market for SME and local suppliers, while some public clients do not benefit from

effective performance management of suppliers within their frameworks.

The Strategy Action Plan calls for the government to:

• Work with representatives from local government (through the National Improvement and

Efficiency Partnership for the Built Environment) to investigate the effective use of frameworks,.

It is in this regard that the Construction team continue to work with IESE to identify continuous

improvement with Frameworks going forward.

The Southern Construction Framework

Chris Cook

SW

£1m plus

SE

£4m plus

London

£5m plus

FUTURE FRAMEWORK PLAN

Framework Team Resourcing – efficiencies in framework

management

Customer Status - Increased status as a customer in the market with

greater buying power.

Breadth of Resources - Greater breadth of team and technical resources

Performance - increased volume of performance information to compare

and enhance performance monitoring across a wider region.

Government Strategy – Government dislike of disparate frameworks.

Buy In – Will attract more public bodies – opportunities for public estate.

Economic Benefit – A significantly sized framework in the UK landscape

and over 4 years would likely turnover £2 billion ensuring contractors put forward

very competitive rates to engage with the framework.

Standardisation – of procurement and contract documentation.

CONVERGENCE BENEFITS

Procuring bodies

• Devon County Council

• Hampshire County Council

• Haringey Council

Governance

Contractors Governance

Regional and Central Management

Regional Lead Team

• Exeter, Winchester, Wood

Green

– Good Governance

– Business development

– Client support

– Process support

– Regional programmes

– Project specific advice

– National liaison

Central Management Team

• Winchester, existing iESE

teamf

– Good Governance

– Guidance and leadership

– Framework management

– Performance management

– Continuous improvement

– Reporting

– Advocacy

Funding mechanism

• £15k Subscription

• 0.15% Project levy included in tendered OHP

– Variable over life of framework

• Paid annually

• ¼ paid on appointment to pre-construction

• Balance paid on acceptance of tender

Predictable

delivery - quality,

cost & on time

Feasibility

Tendered

Packages

Construction

Design

Development

Early

Contractor

Selection

Principles – 2 stage approach

Contractor Adds Value and Complements Design Team

Agreed packages

of works leading

to capital works

contract

Early

supplier

involvement

Pre-Construction phase (fee based)

Government guidance published January 2014

Scope • Framework of Principal Building Contractors • Three “lots”, SW, SE, London • Can bid for any or all lots • Varying project value requirements, but no

maximum limit • Available to all public authorities in the South • Any new build, refurbishment or remodelling

building works • 48 month framework • Facilitates main forms of contract

Framework Value

Lot Lower value

forecast 4 year

throughput

Higher value

forecast 4 year

throughput

CFSW £400,000,000 £800,000,000

SE £800,000,000 £1,500,000,000

London £900,000,000 £1,600,000,000

Accreditation

• EXOR management services: Gold accreditation

• Competitively procured / risk assessment service

• Qualification stage + ongoing monitoring

&exception reporting

• Criteria: H&S and workforce accreditations,

incidents, financial and insurance exception

reporting, + other: www.exorms.co.uk

Exor Framework

• Health & Safety

• Equality

• Environmental Management

• Business Check (incorporating): Financial Stability & Viability;

Annual Requirements; Professional Conduct; Experience of

Business; Insurances; Registrations

Constant Monitoring

• Constant financial monitoring – Experian

• Accounts – Companies House

• H&S – HSE database

• Equalities – IDS Brief

• Insurances, certificates, licenses at expiry

• Other – clients, press

• Annual review

• Suspensions/terminations – notified by e-mail and visible in

the client portal

What we expect of contractors

• £30m Minimum turnover requirement

• Expect active participation, behaviours

• Continuous improvement and knowledge transfer

• Gather required KPI and project information on every project

• Signed off gateway reviews at all stages of every project

• Sufficient capacity to undertake multiple schemes / programmes

What we expect of contractors

• Real continuous improvement contributions

• Strategic relationships

• Support for apprenticeships and other local community benefits initiatives

• Active contribution to framework charters

• Pro-active benchmarking contributions

Excellence in 2 Stage Open Book

• Defined Pre Construction Services Duties

• De risking of design and programme

• Rigorous transparent open book

• Cost control through the process

• Cost certainty

• Clean handover

• Aftercare

Our clients

• Schools, Colleges, Universities, Councils

• Many are not professional clients

• Which is why we are here!!!

• To offer highest professional standards

• It’s YOUR money being spent!!

• On facilities YOUR families will use!!

Join Us!!

• We aspire to be the Gold Standard of frameworks

• One team

• Leading industry best practice and innovation

• Demonstrating the success of 2 Stage OB

• The better we are… the busier we are

• Put dinosaurs into retirement

Performance management

• Contractors will have to maintain minimum performance standards across a range of KPI’s and company standing

• Performance data to be collected for:

– Project performance

– Contractor, designer and client teams

– Localism, sustainability, H&S

ITT likely composition

• Technical questions:

– Theme or scenario questions based on key

success criteria for the framework

• Commercial

– Not to exceed fees for OHP, Design, staff

preliminaries, plus staff rates

– Standard template design(s) to be priced as

£/m2 under RICS NRM for new build.

Timings (indicative)

Event Date

PIN Published 19th March 2014

Contract Notice 22 May 2014

Return of PQQs 24th June 2014

Issue of ITT Documents 19th Sept 2014

Return of Tenders 29th Oct 2014

Contract Award 2nd March 2015

Contract Start 22nd April 2015

Be prepared

• Register your company details on the In-tend, e-

tendering system.

• No charge is made for registration or access to this

system.

• Full details and user guides on how to register and

operate the system are available via the link

• https://in-tendhost.co.uk/hampshire/.

Break

11.00 – 11.30.

The SW Lot

Construction Framework South West Presentation for:

Supplier Briefing Day

at

Swindon 23rd April 2014

Jon Williams

CFSW Framework Manager

Projected spend estimates for SCF 1 in SW

0

25

50

75

100

125

150

175

200

225

2015/16 2016/17 2017/18 2018/19

110 120 130 140

75 75

75 75

£m

Projected spend estimates for SCF 1 in South West

Anticipated Spend - £500m Potential Spend £300m

The SE Lot

Procurement & Commissioning Service

SE7 Construction Market Insight

SE7 Pipeline

£0

£50

£100

£150

£200

£250

£300

£350

£400

FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2022/23 FY 2025/26

£378.5m

£151.4m

£344m

£287.3m

£74.9m £59.2m

£2.4m £20m

Mill

ion

s

SE7 Pipeline Breakdown

43%

42%

15%

Primary Schools

Secondary Schools

Other

Breakdown By Bandwidth

£0

£50

£100

£150

£200

£250

£300

FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2022/23 FY 2025/26

£3m £1m £2m £0m £0m £0m £0m £0m

£263.4m

£54.2m

£117.3m

£68.7m

£0m £3.5m

£2.4m £0m

£112m £97m

£225m £219m

£75m £56m

£0m £20m

Mill

ion

s

<£1m £1-5m >£5m

The over £5m bandwidth

represents 61% of the total

spend for the SE7.

Tier 3 3 Lots (18 contractors)

£1 to £1.5m

Tier 2 1 Lot (TBD)

£0.5m to £4m Tier 2 £750k to £5m (8 contractors)

Tier 3 £50k to £750k (8 contractors)

Tier 4 £1 to £50k (6 contractors)

Tier 2 £750k to £6.5m (11 contractors)

Tier 3 £1 to £750k (11 contractors)

SE SUB REGIONAL FRAMEWORKS

SE Lot Requirements

• Building works >£4m

• Whole of the SE

• Commitment from SE7

• Contractor numbers - 8 to 10

• Will be expected to form local forum groups around SE7 programmes of work

The London Lot

LCP Strategy

• Capital Ambition/London Councils sponsored a review of Construction across London Local Government

• Develop a pan-London strategy to

improve construction procurement.

• Summary report identified a need for improvements, effective collaboration and better alignment to the National Strategy

LCP Strategy (cont’d)

• LCP aims to cut the cost and risk of localised procurement and achieve better value for money outcomes from construction projects through collaboration.

• co-ordinating the overall strategy for London’s public sector in order to maximise outcomes and benefits and avoid duplication of effort

• leveraging the combined buying power of London’s public sector and associated buying organisations

LCP Strategy Contd

• The London Construction Programme (LCP) - initiated by Haringey, Barnet and Enfield launched with the first Pan London framework for Consultants

LCP Strategy (cont’d)

• A virtual organisation of partners Haringey, CCS, LHC, IESE, SCMG, set up as project board.

• Established for the benefit of all public sector in London (excl Central Govt departments)

• Work-programmes are jointly agreed and monitored.

• To align area procurement eventually and cycle key frameworks during the term.

LCP Strategy (cont’d)

• LCP are seeking to appoint up to 8 contractors for the London lots

• Pan London.

• London input into the development of the Southern Construction Framework.

LCP Strategy (cont’d)

To draw the London public sector “together” through:

• Embedding Consultants framework (CRCS2012)

• To develop the Contractors frameworks.

• To develop other Specialist frameworks

• Broader agenda of best practice, common specifications, standardisation, efficiency, KPI’s, templates etc.

• Linking to national agenda

• Advisory Panel of interested authorities.

LCP Major Works Contractor Frameworks - LCP W1 - MW14

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Co

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ion

Fr

amew

ork

fro

m 2

01

5

LCP

Maj

or

Wo

rks

Value Band 2 - £1,000,000 to £4,999,999

Value Band 1 - £100,000 to £999,999

Work Lots – a) Housing b) education & Others

Value Band 3 - £5,000,000 to £10,000,000 +

> £10,000,000

IESE

av

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01

5

FIV

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ON

C

LUST

ERS

FIV

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LON

DO

N

CLU

STER

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FIV

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LON

DO

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CLU

STER

S

LCP Major Works Contractors Frameworks The London Sub Regions

Hillingdon

Harrow

Ealing

Brent

Hounslow

Barnet

Enfield

Haringey Waltham

Forest

Richmond

Kingston

Wandsworth

Merton

Sutton Croydon

Bromley

Lewisham

Greenwich

Bexley

Redbridge

Havering Barking & Dagenham Newham Tower

Hamlets

Camden

City

LFB

Metropolitan Police

London-wide organisations

West

North East

South East

South West

LCP Strategy (cont’d)

• Extract from LCP Major Works 2014 (LCP W1 - MW14) Framework Agreement, Memorandum of information paragraph 3a.

“The new SCF for London will be advertised for works over £5 million but the intention is that the SCF will primarily be used for works over £10 million. There will therefore be an overlap with the LCP W1 MW14 framework, thus allowing Commissioning Organisations undertaking works between £5 million and £10 million to choose between using the LCP W1 MW14 framework and the SCF.

There is an efficiency to be gained by procuring and running regional frameworks together in the future, so that there is one team providing much of the management activity, but to have a local “front door” ownership and branding”.

Summary

LCP’s strategy is : • for London’s public sector authorities and

buying organisations to work collectively to achieve higher benchmarks using their respective strengths and combined resources, minimising duplication of effort and maximising value for money.

• make available a suite of pan-London construction-related Framework Agreements

• enable access to knowledge and experience within LCP participating organisations.

• Linked to National Agenda

Summary And Recap

Summary / Recap Key contractor traits:

• Contribution to SCF

• Champion added value

• Underpin successful legacy of iESE / CFSW

• Stimulate customer satisfaction

• Embrace new initiatives and ways of working

• Never stop collaborating

• ‘Wow’ framework users!

Summary

• Evidence benefits of SCF

• Steward & manage – cost / time / quality

• Drive innovation

• Provide projects with intelligent support

• Appreciate / value your supply chain

• Excellent KPI’s with Min Stds

Next Steps

• Exor Microsite – Ring Helpline

• Exor Helpline – 02920 266 242

• Hants CC Procurement Portal

https://in-tendhost.co.uk/hampshire/

Presentation – see iESE Website

WARNING

• PQQ & ITT Guidance/Content will supercede any guidance in this presentation

• Therefore rely on what is in PQQ & ITT

Questions?