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HERTFORDSHIRE PROPERTY PARTNERSHIP TOPIC GROUP . Dr Neil Jarrett. CE/CWC Brief. to review the current approach to procurement & delivery by comparing practices with current construction industry best practice and identify any gaps to provide independent challenge to own thinking

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ce cwc brief
CE/CWC Brief
  • to review the current approach to procurement & delivery by comparing practices with current construction industry best practice and identify any gaps
  • to provide independent challenge to own thinking
  • to make recommendations for future delivery including organisational, process and culture changes
  • to develop an action plan for the next steps.
aims and objectives
Aims and Objectives
  • Assurance methodology to determine the level of compliance and embedding of the principles of Achieving Excellence in Construction (AEC) and other OGC policies by public sector procurers, and to measure the benefits gained
  • The assessment needs to be
    • objective
    • evidence based
    • representative of the whole ‘department’
  • And it should secure a residual level of buy-in to subsequent actions and improvement
relevant policies
Relevant Policies

NAO

reports

Sustainable Procurement; Design quality

Achieving Excellence guides

Sustainable Construction Strategy, Commitments

Common Minimum Standards

ogc guidance
OGC guidance

Achieving Excellence in Construction (AEC):

  • AEC Guides 1 – 11: Initiative into Action; Project Organisation; Project Procurement Lifecycle; Risk and Value Management; The Integrated Project Team; Procurement and Contract Strategies; Whole-Life costing; Improving performance; Design Quality; Health and Safety; Sustainability
  • A Manager's Checklist; Achieving Excellence Construction Projects Pocketbook; Common Minimum Standards; Guide to Best 'Fair Payment' Practices; Making competition work for you

Other guidance:

  • Gateway, Construction Commitments, Sustainable Construction Strategy, design quality
6 step process as piloted
6-step process (AS PILOTED)
  • Senior –level kick-off meeting
  • Self-assessment (up to 20)
    • Including a cross-section of the team (anonymous) if possible
    • 1-2 suppliers and end users
  • Individual interviews
    • To understand strategy and especially to identify value drivers and core business KPIs; also to confirm evidence for self-assessment as required
    • To validate the self-assessments, esp. higher scores
  • Performance data
    • Collection of programme/projects KPIs and value measures
  • Workshop
    • To expose different views and facilitate discussion on these, to reach consensus, and to initiate ideas about improvement
  • Report, feedback and action plan
participants in the pilot
Participants in the pilot
  • Ministry of Justice
  • Whitehall Estate
  • Defence Estates
  • SmartEast
  • Highways Agency/M41
  • (Flagship – housing)

NOT

  • Bristol LEP/Skanska

Consultees:

  • NAO
  • CABE
  • ProCure 21
  • IESE (Hampshire CC)
  • SWRDA
  • Partnership for Schools
maturity matrix
Maturity matrix
  • Developed from NAO maturity matrix
  • 55 questions with 4 levels of maturity under the 6 headings of the Construction Commitments:
    • Client Leadership
    • Procurement and Integration
    • Design Quality
    • Commitment to People
    • Sustainability
    • Health and safety
  • Applicable to different roles
    • Funders, procurers, deliverers
    • Centralised vs. devolved Departments
    • End users and suppliers able to provide views too
value to departments
Value to Departments

Objective ‘third-party’ review

Identifying areas of good practice

Action plan for improvement

Demonstrating the current level of good practice in the Department

A focus on value as well as ‘efficiency’

A standard way to report the impact of Departmental programmes

Evidence for funding submissions and other reporting including audits

Potential learning from comparison with other Departments

“The assessment is valid and valuable in helping to identify our current position and to provide a plan for further improvement”

now a 10 step process
Now a [10]-step process
  • Agree the boundaries for assessment (scope, e.g. a unit or activity?)
  • Select an appropriate team from across the delivery supply chain
  • Hold a familiarisation meeting on the Assessment process
  • Team members individually assess relevant elements of the matrix
  • Collate individual assessment scores onto summary charts
  • COLLATE KPI DATA
  • Interviews with a sample of respondents to verify accuracy
  • Workshop
    • consensus score ranges, explore differences
    • Prioritise from gap analysis and set implementation timescales
    • Action plans. (Revisit yearly)
  • Final report and action plan
  • Final review meeting with senior-most management to confirm buy-in to the action plan
examples of evidence required
Examples Of Evidence Required
  • Corporate Plan/Corporate Strategy, performance criteria, departmental annual reports
  • Capital Programme & Capital Programme Development (Proposal Process)
  • Investment plans and priorities
  • Criteria for project performance
  • Monitoring Reports on performance against the Programme and projects
  • Procurement Guidelines
  • Project Management Procedures (Guidelines)
  • Gateway Reviews (Project Evidence)
  • Green Book Appraisals (Business Case – Project Evidence)
  • KPI Data Collection – All projects? Analysis of data to evidence performance improvement
  • Post Project Reviews/Evaluations (Procedures & Project Evidence) and what’s happened to the information collected to improve future projects
  • Sustainability: WLC Criteria,
  • Evidence of external learning (UK visits, transfer of best practice)
  • Resource Development Plans
    • Training Needs Analysis
    • Personal Development Plans (PDP’s for IDM’S, PS)
    • Procurement Improvements through new Frameworks
example smarte east review stages
Example - Smarte East Review Stages
  • Questionnaire completion – 27
  • Interviews – 9
  • Preliminary analysis
  • Workshop discussion
  • Final report
achieving excellence principles for delivering efficiency vfm
Achieving Excellence - Principles For Delivering Efficiency & VFM
  • Long term relationships between client, contractors, designers, and key suppliers.
  • Collaborative behaviour with everyone incentivised to deliver for the customer.
  • Collaborative contracts that share risk and reward. Risk passed to party best placed to manage.
  • Detailed understanding of cost and other aspects of performance and targets set for continuous improvement.
  • Extensive collaborative planning to ensure a continuous stream of work for partner designers and contractors and efficient delivery.
slide18
Involve Supply Chain

Early To Unlocking Benefits

Key concepts

agreed & owned

Ability to

Change

Cost of

Change

Briefing

Feasibility

Outline Design

Detail Design

Implementation

Historic Project Stages

slide19
Final actual price

Preliminary target cost

Link to KPI’s?

Scheme design cost & risk plan

Refinement of specification, scope of works

Identify risk and remove from target cost

Setting target costs and incentivisation

Budget/Historical cost record

Risk Pot

Budget contingencies

Pain share split

Final target cost incl o/h & p

Gain share split

Scheme

Design

Construction

the basic principles
The Basic Principles
  • The customer defines a need - not a solution - and works with the team to agree the solution
  • The customer selects a delivery team – and a leader of the team – which will be responsible for all aspects of design and delivery
  • The delivery team are incentivised to translate the need into a solution and set targets to ensure they deliver superior value in meeting the need
  • All parties understand and implement the principles of project integration
slide21
Waste Reduction Model

100%

Profit Share

Contractors Costs

70%

Profit Share

Contractor Costs

Contractors Waste

Customer Waste

Customer Costs

Customer Costs

slide25
Smarte East Best Practice Assessment Findings
  • Client Leadership
      • Good long term arrangements and attitudes.
    • 2. The objectives of the schemes are well defined
    • 3. Schemes are monitored through a structured gateway process by expert project managers.
  • But………
    • Programme planning only looks one year ahead which hinders continuity of work. Limited forward programme availability for contractor partners.
    • 2. Budgets are set against historic or BCIS data. They lack detail and are often inaccurate.
    • 3. Managing Benefits – there is no proper follow up to asses if the objectives have been met.
  • S
slide26
Smarte East Best Practice Assessment Findings
  • Client Leadership.....
    • Limited performance benchmarking – between Smarte East contractors and externally.
    • Member concern due to uncertainty over VFM.
    • Lack of Consultant Framework means approaches are not consistent and benefits limited.
    • Programme and project reporting is poor and not used for management and do not drive improvement.
    • Post project reviews are limited and hence the opportunity of ongoing learning is lost.
    • Communication process at high level is good but this is not the case at ground level.
  • S
summary of main areas for improvement
Summary of Main Areas for Improvement:

Self Assessment scores are mostly good but some fundamental issues are still to be tackled including:

  • Benchmarking and performance managing – setting ongoing targets for improvement.
  • Ensuring competitive pressure to deliver optimum value for money from partners
  • Developing an integrated scheme process and ensure all user, client, designer and contractor stakeholders understand the process and benefits
  • Understand, develop and monitor capability (including contract management) ensure have capable people to manage collaborative process - including what to do when schemes go wrong.
  • Establishing a commercial target cost that motivates the contractor’s and suppliers to deliver VFM.
    • Understanding costs - developing more robust target costing.
  • Investing resources and supporting all parties in formalised continuous process improvement
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