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.
Local authorities undertake a significant volume of construction work ranging from programmes of repair and maintenance to major refurbishment and new build projects across a host of different sectors including schools, social care, housing, infrastructure and highways. It is therefore crucial that councils use their spending power to ensure that their supply chain is behaving responsibly and identifying and combatting instances of exploitation wherever it may be found in the supply chain tiers.
To address exploitation effectively it is essential that organisations take a risk-based approach to procurement. Whilst construction as a sector is considered high risk for modern slavery, the risks are found within specific materials and work packages which need to be identified by any procurement team before any requirements are set.
This guidance document has been developed to support procurement teams within local authorities embed requirements through the procurement process to identify and combat exploitation and slavery wherever it may be found.
It has been developed to outline all key activities that are associated with good procurement and provide advice, examples, and links to appropriate resources that will allow procurement teams to integrate requirements as effectively as possible.
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.
NACF have now updated their popular market intelligence maps that show data captured annually on projects >£1m, including current market trends and other market factors that are important to budgets and awareness of project delivery.
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In 2014, Government issued some draft guidance on new models of construction procurement, based on best practice in public sector construction.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
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 2020 study that includes data from 2019 has now been published.
The study has been undertaken with funding from the LGA and conducted by Hampshire County Council in conjunction with East Riding of Yorkshire Council, the Department for Education, Education Building and Development Officers Group (EBDOG) and National Association of Construction Frameworks (NACF).
This significant study now has a dataset with a capital value of over £5.7 billion from 150 local authorities across England. The study 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 a valuable tool for us all to understand the real cost of building new school places across the country.
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
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.