Construction procurement

With £18bn a year being spent on capital construction and infrastructure programmes, councils are having to take a look at how procurement can assist them to build and maintain the critical infrastructure which supports society and our economy


The construction category management steering group are looking into a number of initiatives relating to construction procurement. 

The current workstreams are:

  • Developing a new national category strategy for construction
  • Market engagement / supply chain management
  • Cost benchmarking.

National Construction Category Strategy 2018

The second edition of the construction category strategy was launched in 2018 and outlines how councils can facilitate better value solutions that can be achieved through lower capital costs and more efficient procurement. This is particularly important given recent major public sector supplier collapse.

Market intelligence

NACF have now updated their popular market intelligence maps that show data captured annually on projects >£1m, incouding current market trends and other market factors that are important to budgets and awareness of project delivery.

NACF Market Intelligence - Heat Maps

New models of construction procurement

In 2014, Government issued some draft guidance on new models of construction procurement, based on best practice in public sector construction.

The guidance is in three parts and covers:

  • Two Stage Open Book
  • Cost led Procurement
  • Integrated Project Assurance

Learn more

National School Delivery Cost Benchmarking

The National Schools Delivery Cost Benchmarking is a hugely important study, providing a reference point for councils when assessing schools costs. The submissions for the 2019 study has now closed and the results will be published soon. 

The study was conducted by Hampshire County Council in conjunction with East Riding of Yorkshire Council and the Education and Skills Funding Agency. This significant study now has a dataset with a capital value of over £3.7billion from 126 local authorities across England. The study now has good data on the actual costs of primary, secondary and SEN school projects including;

  • cost per place
  • gross costs
  • net costs

To ensure a high level of consistent participation, local authorities  are asked to submit data using a common standard form of cost analysis.
 
This study is welcomed and supported by the Infrastructure & Projects Authority (part of the Cabinet Office), Department for Education and Education and Skills Funding Agency and will be a valuable tool for us all to understand the real cost of building new school places across the country. The output of the study will also be used in future publications of the Cabinet Office Cost and Data Benchmarking Task Group.

 
Previous reports

National Schools Delivery Cost Benchmarking 2018

National Schools Delivery Cost Benchmarking 2017

National School Delivery Cost Benchmarking - Primary, Secondary and SEN Schools (February 2017)

National School Delivery Cost Benchmarking - Primary, Secondary and SEN Schools (February 2016)

National School Delivery Cost Benchmarking - Primary and Secondary Schools (January 2015)

National School Delivery Cost Benchmarking - Newbuild and Refurbished Primary Schools (June 2014)

Framework contracts

Effective Construction Frameworks compares construction frameworks with traditional forms of procurement (where suppliers are procured for individual projects) and considers the benefits offered by effective construction frameworks. It also sets out the key features of effective framework agreements. The details included are not necessarily exclusive to framework arrangements; the attributes can also be prerequisites in other effective construction procurement mechanisms or routes to market.

A refreshed version of the Effective Construction Frameworks document will be available for download soon.

For access to construction related framework contracts please visit the NACF website.

Construction case studies and other resources

Market consultation case study

Cluster working: Hampshire, Surrey, West Sussex and Reading councils used a two-stage open book process to trial cluster working on 22 individual projects with a total budget of around £119m. They hope to aggregate savings of 14% of the total cost by standardising on design approaches, aggregating  and driving efficiency through the supply chain. For more information see the case study here

Using Procurement to tackle poverty: Birmingham City Council's Employment Action Team set out to use public procurement to address poverty through training and employment.

Use of BIM: Trafford Borough Council were keen to implement the use of BIM on Springfield Primary School, a contract worth some £4.2 million. The main BIM objective was the early completion of design information to allow early engagement with the supply chain and increase opportunities for further collaboration with specialist subcontractors.  For more information on how the council saved £80,000 through use of BIM with the whole supply chain see here.

The National Skills Academy for Construction

This client-based approach provides a toolkit to deliver employment, apprenticeships and training for public sector clients through their construction projects, planning policy and development control. It provides model documentation, benchmarks, case studies
and practical commentary. Based on successful National Skills Academy for Construction projects, the guidance includes all necessary components to deliver apprenticeships, employment and training opportunities on any type and size of construction project.

Case studies