New Models of Construction Procurement – 2019 annual report to the Cabinet Office

The New Models of Construction Procurement Working Group was tasked in the Government Construction Strategy 2016-2020 to monitor and report on the impact of three new models of procurement which all feature early supplier engagement, transparency of cost, and collaborative working to deliver a value for money outcome: Cost Led Procurement; Two Stage Open Book; Integrated Project Insurance (IPI). Chaired by Don Ward, chief executive of Constructing Excellence, the Working Group has now published its 2019 annual report to the Cabinet Office, available here: New Models of Construction Procurement – Annual Report Jan 2019.

The Working Group has continued its brief to report on trials of the three new models of construction procurement.

  • The first trial project for IPI, Advance II at Dudley College, has successfully concluded, showing savings of 6%, and the client has commenced a second project with the same approach. A third pilot is also underway. The other two models, Two-Stage Open Book and Cost-Led Procurement, were accepted as proven by the IPA in January 2017 (see the group’s 2017 annual report), and these have been increasingly widely adopted, particularly in the local government sector where data shows an estimated £1 billion per year of projects are using the models as of end 2018.
  • Crown Commercial Services’ £2.8 billion consultants framework now includes a requirement for capability in the new models and consultants have formed an alliance committed to shared procurement practices, although limited client demand has been perceived for adoption of the new models. Crown Commercial have also advertised a £1.2 billion modular alliance procurement including NMCP options and in early 2019 are due to advertise a £30 billion contractor framework alliance including NMCP options.
  • In 2019 the Working Group’s priority is to improve awareness of the three new models and the case for adoption with public sector client-side decision makers including their professional advisors.

For more information on the New Models of Construction Procurement and the trial projects programme, click here.