Meeting Note CE Procurement Group 22 March 2020 – Zoom Meeting

Crown Commercial Service

Sam Ulyatt and John Welch provided an overview of the Crown Commercial Service Construction Works Framework a £30 billion, 7 year programme. The framework is open to every public body. A core element of the framework is to drive better procurement across the public sector. The team at CCS have been brought in to work with and encourage better procurement across the government function.

Introduction to the Construction Works Framework for Constructing Excellence 22042020

Key points:

• Government has been going through how a strategic change in how it procures construction. The central government’s strategic supplier programme did not have any construction companies. Government has traditionally found the sector disjointed and difficult to understand.
• CCS have mapped out the key decision makers – with government procurement it can be difficult to know if you are talking to the right people due to delegated authority and functions. Need to really understand the government commercial function and how business cases are formed.
• Working alongside and mentoring – some departments are more advanced than others. There is a lot of work to do to drive and support collaboration. There are pockets of good practice
• Design & Build is still an option but it is about educating and improving behaviours. The strategy is to get people in and give them the option to change. Need to work alongside clients to help them understand their capital programmes and risk profiles. Need to get people on board and then start enlightening them on the art of the possible.
• The framework covers manufacture, design, construct and operate therefore driving collaborative behaviours through the supply chain is very important.
• Aligning incentives with outcomes – The customer can incentivise the alliance in their sub-agreement. The commercial model is really important – based on the ability to understand a project or programme of works. Success outcomes needed to be ensure alignment with the works to be incentivised.
• Some departments are more receptive and are much more advanced than others. Many departments that have traditionally been quite stand offish are now approachable and open to change.
• Many across the public sector don’t realise that change and different ways of working are an option.
• Both supply and demand sides need to change approaches. CCS have brought in an experienced team to support both sides and work with suppliers wanting to change. Requires honesty and transparency on both sides.
• £30 billion is large enough to generate some genuine impact but not so large as to dominate the market. There was considerable input on procurement and competition rules. The CCS is working with frameworks, they want to support all frameworks to work in the right way and give the frameworks who are doing the right things a voice.

 

Case Studies

Alison outlined progress on client-specific case studies that are in focus. These aim to look at successful collaborative projects and produce some very short, very focussed case studies from clients aimed at other clients. The questions covered are:

• How did the client make the decision to employ a collaborative procurement approach?
• Why did the client decide on the procurement approach?
• What was the level of client involvement in the project?
• How did it differ from other approaches?
• What benefits did it deliver?
• What challenges did the client face?
• How has the asset performed over in operation?
• What are the key learning points for other clients?

Case studies are now advanced with the Environment Agency and Dudley College. Other proposed projects are welcome from group members.

The idea of a case study on the Nightingale Hospitals was discussed and this is coming up in many conversations. The best way to capture the key learning points will be considered and perhaps a topic to bring those involved to a future meeting to capture those points.

 

Coronavirus Discussion

Less than 50% of the industry is currently working (as of 22 April). Many frameworks have been extended to expedite procurements. Sufficient legal advice was sought to avoid legal challenge. Commercial and procurement guidelines are due for release shortly.

Cabinet Office are now looking at post-BREXIT procurement rules. Ann has been involved in discussions.

Construction firms are experiencing a range of responses from supply chain and clients ranging from supportive to aggressive and overly contractual approaches. Although there is some frustration around the advice and guidance approach from government, legislation is not an option as it will be challenged and needs consultation. Private sector in particular are acting aggressively as many companies are in survival mode.

There was widespread feeling that the industry was already broken going into the Coronavirus crisis. It enables and creates the environment for things to happen but very few people are interested in how it happens.

In 2009 the financial crisis led to a many years of public sector clients focussing solely on cost. Only in the past few years has value and other quality aspects such as zero carbon are coming through. There is a fear at a local level that there will be a return to austerity.

Suggestion that people need tools to focus on the right areas for the medium term.

AOB

Martin Davis reported good progress in terms of ‘breaking into banks’. Senior lenders are very keen to encourage collaborative projects as they see the advantages in terms of reduced risks. Martin will keep us updated on progress.