Awareness events are run for everyone likely to be involved in frameworking. This section can apply to an awareness event for any group. It might be convenient to run one awareness event for members and regulatory officers together and another event for stakeholders.
It probably seems quite logical to tender projects on ‘best value’ criteria than just looking for who’s offering the lowest price. (We’ve all had personal experience of the bargain that turns out to be a maintenance headache.) But now members are asked to go along with awarding projects over and over to the same people, which may ‘go against the grain’.
Officers should be able to outline the case for frameworking as follows.
What have we learned from recent projects?
Report on the successes and failures of past projects. If you really have been rethinking construction, you will now have facts and figures to show whether the council has been achieving its desired outcomes in the past, and which aspects its needs to improve in order to achieve better value for money. See Strategic issue 4.
What are our options for the future?
Show the four general ways to procure projects and in which circumstances they work best. Members may be relieved to discover that the traditional lump sum contract still has a place in local government construction, but it’s really only suited to small, low risk projects.
This diagram does not mention the Private Finance Initiative (PFI). Under PFI, the relationships between the stakeholders will be less collaborative because the design, finance and maintenance risks move substantially to the contractor. So one of your early decisions will be whether PFI will be advantageous and, if not, then consider your procurement options in this risk/spend matrix.
The investment cycle for local authorities now extends over several years. This longer-term view will help you to decide on frameworking. Note also that a framework does not commit you to future spending on projects.
Industry-wide experience shows that framework agreements work well in large programmes, especially where risks are great. With bigger than ever spending on public sector construction, frameworking is a logical choice.
What do we know about Best Practice elsewhere?
Frameworking is like project partnering, except you do it over and over again with the same people and learn to do it better each time. We have assembled case studies, all Constructing Excellence Demonstration Projects (see opposite), that show how framework agreements partnering brings down construction costs and time, and produce better quality results too. Don’t worry if many of the examples are in the private sector, because frameworking has been in use there longer. But there are also case studies showing successful frameworks in the public sector, mainly in local government.
Explore these case studies which we list under:
- bringing in expertise
- co-operating with other local authorities.
Most of these demonstrate partnering and many extend to strategic partnering (denoted SP).
Frameworkone is to construct educational buildings in the value range £500k to £5m.
Project Review – the first year reports time and cost savings and shows that the contractors are seriously engaged in improvement.
Major benefits to date gives the client’s perspective.
Why and how do we need to deal with suppliers differently?
Large, risky construction programmes have the potential to cause council officers and members many sleepless nights if they are not well managed. Officers will tell you about The techniques which have been devised to manage framework agreements, such as include:
- evaluating suppliers and annual measure of target (MOT)
- using key performance indicators (KPIs) to maintain competition without retendering
- forecasting demand so as to improve the match between supply and demand
- designing incentives for everyone to improve their performance
- adopting new forms of contract that encourage partnering and continuous improvement.
The fact sheet Supply chain management is an introduction to the principles of supply chain management for organisations that are new to the subject or in the early stages of developing a supply chain. It covers the whys and hows and includes many references to further guidance.
Read the case study T5 Buy Club – how M&E contractors pool purchasing at Heathrow Terminal 5 to see how BAA’s quite proactive stance with its M&E supply chain achieved stunning results. The Buy Club applies best practice procurement processes (as normally used for selecting 1st tier suppliers) at the 2nd tier. There are many radical ideas here, surely food for thought.
Finally, if you’re wondering what the finance and audit people will think about all this, go to the next step ‘Procurement Strategy’.
If you are unable to convince colleagues that frameworking is the right choice for certain programmes, then either your council is not proposing any large, risky construction programmes, or you have not done your homework. When properly researched and presented, the case for framework agreements is overwhelming.
- Fit-out accomplished by multi-skilled team
- Mace opens Pandora’s box of innovations (SP)
- Operation: BRANDMAX – framework to refit 700 retail stores (SP)
- Repeat business nurtures continuous improvement
- Thames/Morrison network pioneers – together they transformed the water maintenance business in just two years (SP)
- The Pavement Team – integrated team making airport saving of 30% over 5 years (SP)
Bringing in expertise
- 18 water schemes in one management contract – Northern Ireland Water Service
- Moray Flood Alleviation Group formed – alliance between client and consultant
- New partnership spruces up property service unit
- New deal for stakeholders in partnered schools – Coventry LEA
- Partnering keeps school project on target
- Partnered IT project turns the tide in Dundee
- Strategic partnering works in North Tyneside schools (SP)
- Contractors collaborate with council to make homes decent – an award winning strategic partnership (SP)
- Partnering deal unlocks land for social housing
- Trailblazing partnership shows how to change maintenance – Broomleigh Housing Association (SP)
- Partnering pays-off in small refurb projects (SP)
Co-operating with other authorities
- How DSOs partnered for best value on Dorset roads
- LAs compare processes to achieve best practice
- T5 Buy Club – how M&E contractors pool purchasing at Heathrow Terminal 5