Constructing West Midlands

1. Constructing West Midlands Martin Merrix Divisional Manager, Urban Design

2. Current arrangements • Term contracts for non-housing repair and maintenance works < £100k • five year duration commenced 2006 • development of previous term contracts • Framework for Capital Works > £100k • Seven year duration commenced 2004 • Innovative ‘partnership’ with three principal contractors – the Birmingham Construction Partnership

3. Partnership benefits • Approx £6-8 million tendering costs saved per annum • Better risk allocation and management • Early contractor and supply chain involvement • 62 strategic supply chain partners • 221 jobs created / 200+ training opportunities • Supports 1000+ jobs in direct supply chain

4. Partnership benefits • Reduced pre-construction time • Significantly improved time and cost certainty • Collaborative procurement – joint purchasing • Total joint working– client, end-users, designers, contractors, supply chain • Early settlement of final accounts – no retention

5. Partnership benefits • Better design, WLC and sustainability • Continuous improvement across BCP/client • Safe sites with good welfare facilities • Improved quality of construction • Changed attitudes

6. What are the benefits?

7. Initiatives: Achieving Excellence in Construction • The partnering and integrated team approach: avoiding fragmentation and adversarialism • Development of long-term relationships: one off lowest cost is OUT • Improved skills development and empowerment: effective Project Sponsorship, collaboration, tools and ‘infrastructure’ • Adoption of performance measurement indicators: if you are not counting you are only practising; Public Sector Construction Database • Use of tools for value and risk management and whole-life costing: Gateway, AE4, Green Book Supplement, Fair Payment in Construction, Demand Management and market analysis NAO expects this initiative to save £2.6 billion per annum

8. Performance reports produced from PSCD ORGANISATION X AEC Specific Project Performance and resulting benefits • Your contribution to the overall savings of £823m is £2.0m, which is calculated using the Org X average project performance figure of 6.7%. • Please consult your spending team or the HMT VfM team if you intend to include this as part of your Departments VfM savings and have any queries about its qualification. Birmingham Construction Partnership 09/10 saving: £13.1m on £130m p.a.

9. Future Arrangement:Constructing West Midlands

10. What are we proposing? • Framework available to all public sector bodies in the West Midlands region • Covering all types and values of work • Duration 4 + 2 + 2 years • To build on the successes of the Birmingham Construction Partnership

11. ‘Constructing West Midlands’ Region

12. Framework Category Proposal Quality / Price split 50/50 Quality / Price split 60/40 £500k upwards £0 – 500 k Category 2 Major Public Construction Projects Major Programmes of Work Category 1 Repair and Maintenance works Planned / Reactive Minor Building works Constructing West Midlands

13. Framework Lots Quality / Price split 50/50 Quality / Price split 60/40 £500k upwards £0 – 500 k Category 1 Lot 1 - Legionella – North Lot 2 - Legionella – South Lot 3 - Elec. and Mech. - North Lot 4 - Elec. and Mech. - South Lot 5 - Building - North Lot 6 - Building – South One contractor per Lot and only North or South per discipline Category 2 Lot 7 – Capital Projects or Programmes of work Up to four contractors Constructing West Midlands

14. Timeframe • Industry feedback 8 September 2010 • Issue OJEU contract notice 8 November 2010 • PQQ issue 15 November 2010 • PQQ returns 22 December 2010 • Issue tender documentation 18 February 2011 • Tender submissions - close 31 March 2011 • Contract award 29 July 2011 • Operational start 1 October 2011 Constructing West Midlands

15. Key Drivers • Collaborative and integrated approach / working between clients, contractors, SMEs, supply chains, suppliers, end users and so on • Delivery of responsive, efficient and cost effective building / construction services to participating public bodies – demonstrating measurable value for money

16. Key Drivers • Continuous improvement, innovation and cost reduction (process and delivery) year on year • Delivering excellence in supply chain management • Creation and maximisation of opportunities for supply chain / SMEs local to the points of delivery

17. Key Drivers • Creation of local jobs and training (direct and indirect) through ‘Targeted Recruitment and Training’ – delivering measurable outcomes (for example, 60 person weeks of new entrant training per £million spend to achieve NVQs) • Reduction of environmental impact, carbon and waste • Delivery of whole life value and whole life carbon throughout design and construction

18. Supply Chains • First tier contractors to help develop supply chain • Creation of opportunities for SMEs local to the point of delivery including, for example, use of Find it in Birmingham • Early engagement of supply chain on projects • Collaborative procurement for and by suppliers • To support targeted training and recruitment objectives