HERTFORDSHIRE PROPERTY PARTNERSHIP

TOPIC GROUP

Dr Neil Jarrett

CE/CWC Briefto review the current approach to procurement & delivery by comparing practices with current construction industry best practice and identify any gaps

to provide independent challenge to own thinking

to make recommendations for future delivery including organisational, process and culture changes

to develop an action plan for the next steps.

Aims and Objectives Assurance methodology to determine the level of

compliance and embedding of the principles of Achieving Excellence in Construction (AEC) and other OGC policies by public sector procurers, and to measure the benefits gained

The assessment needs to be objective evidence based representative of the whole ‘department’

And it should secure a residual level of buy-in to subsequent actions and improvement

Common Minimum Standards

Relevant Policies

Sustainable Construction

Strategy, Commitments

Achieving Excellence

guides

Sustainable Procurement;

Design quality

NAOreports

OGC guidanceAchieving Excellence in Construction (AEC): AEC Guides 1 – 11: Initiative into Action; Project

Organisation; Project Procurement Lifecycle; Risk and Value Management; The Integrated Project Team; Procurement and Contract Strategies; Whole-Life costing; Improving performance; Design Quality; Health and Safety; Sustainability

A Manager's Checklist; Achieving Excellence Construction Projects Pocketbook; Common Minimum Standards; Guide to Best 'Fair Payment' Practices; Making competition work for you

Other guidance: Gateway, Construction Commitments, Sustainable

Construction Strategy, design quality

Overview of approach

OGC policies

(RAEC, NAO, CMS, Gateway, Commitments, Sustainable Construction Strategy, design quality)

Front page of ‘jigsaw pieces’

KPIs and management information

Self-assessment ‘healthcheck’

(core = NAO maturity matrix)

On-line tool (similar to CE

Tracker)?

Interviews, workshop, follow-up evidence

Facilitated validation interventions Pilots to confirm methodology

Refine OGC benefits methodology

Soft and hard performance measures

6-step process (AS PILOTED)

Senior –level kick-off meeting Self-assessment (up to 20)

Including a cross-section of the team (anonymous) if possible 1-2 suppliers and end users

Individual interviews To understand strategy and especially to identify value drivers and core

business KPIs; also to confirm evidence for self-assessment as required To validate the self-assessments, esp. higher scores

Performance data Collection of programme/projects KPIs and value measures

Workshop To expose different views and facilitate discussion on these, to reach

consensus, and to initiate ideas about improvement Report, feedback and action plan

Participants in the pilot

Ministry of Justice Whitehall Estate Defence Estates SmartEast Highways Agency/M41 (Flagship – housing)

NOT Bristol LEP/Skanska

Consultees: NAO CABE ProCure 21 IESE (Hampshire CC) SWRDA Partnership for Schools

Maturity matrix Developed from NAO maturity matrix 55 questions with 4 levels of maturity

under the 6 headings of the Construction Commitments: Client Leadership Procurement and Integration Design Quality Commitment to People Sustainability Health and safety

Applicable to different roles Funders, procurers, deliverers Centralised vs. devolved Departments End users and suppliers able to provide views too

Pilot resultsConstruction Commitment Client A Client B Client C Client D Client E

Client Leadership76% 69% 71% 64% 66%

Procurement and Integration79% 55% 78% 70% 66%

Design Quality77% 51% 68% 69% 40%

Commitment to People53% 32% 54% 55% 45%

Performance Improvement70% 49% 70% 60% 63%

Sustainability77% 54% 83% 62% 53%

Health and Safety75% 43% 69% 67% 36%

Total 74% 55% 71% 65% 58%

Results presentation

Value to Departments Objective ‘third-party’ review Identifying areas of good practice Action plan for improvement Demonstrating the current level of good practice in the Department A focus on value as well as ‘efficiency’ A standard way to report the impact of Departmental programmes Evidence for funding submissions and other reporting including audits Potential learning from comparison with other Departments

“The assessment is valid and valuable in helping to identify our current position and to provide a plan for further improvement”

Now a [10]-step process1. Agree the boundaries for assessment (scope, e.g. a unit or activity?)2. Select an appropriate team from across the delivery supply chain3. Hold a familiarisation meeting on the Assessment process4. Team members individually assess relevant elements of the matrix5. Collate individual assessment scores onto summary charts6. COLLATE KPI DATA7. Interviews with a sample of respondents to verify accuracy8. Workshop

1. consensus score ranges, explore differences2. Prioritise from gap analysis and set implementation timescales3. Action plans. (Revisit yearly)

9. Final report and action plan10. Final review meeting with senior-most

management to confirm buy-in to the action plan

Examples Of Evidence Required

Corporate Plan/Corporate Strategy, performance criteria, departmental annual reports

Capital Programme & Capital Programme Development (Proposal Process)

Investment plans and priorities Criteria for project performance Monitoring Reports on performance against the Programme and

projects Procurement Guidelines Project Management Procedures (Guidelines) Gateway Reviews (Project Evidence) Green Book Appraisals (Business Case – Project Evidence) KPI Data Collection – All projects? Analysis of data to evidence

performance improvement Post Project Reviews/Evaluations (Procedures & Project Evidence) and

what’s happened to the information collected to improve future projects

Sustainability: WLC Criteria, Evidence of external learning (UK visits, transfer of best practice) Resource Development Plans

Training Needs Analysis Personal Development Plans (PDP’s for IDM’S, PS) Procurement Improvements through new Frameworks

Example - Smarte East Review Stages

1. Questionnaire completion – 272. Interviews – 93. Preliminary analysis 4. Workshop discussion5. Final report

A reminder of Achieving A reminder of Achieving Excellence principles Excellence principles

Achieving Excellence - Principles For Delivering Efficiency & VFM Long term relationships between client, contractors,

designers, and key suppliers. Collaborative behaviour with everyone incentivised to deliver

for the customer. Collaborative contracts that share risk and reward. Risk

passed to party best placed to manage. Detailed understanding of cost and other aspects of

performance and targets set for continuous improvement. Extensive collaborative planning to ensure a continuous

stream of work for partner designers and contractors and efficient delivery.

Involve Supply Chain Early To Unlocking Benefits

Ability toChange Cost of

Change

Historic Project Stages

Briefing Feasibility Outline Design Detail Design Implementation

Key conceptsKey conceptsagreed & ownedagreed & owned

Scheme Design Construction

Link to KPI’s?

Scheme design cost

& risk plan

Refinement of specification,

scope of works

Identify risk and remove

from target cost

Preliminary target cost

Final actual price

Pain share split

Gain share split

Budget/Historical cost record

Setting target costs and incentivisation

Risk Pot

Budget contingencies

Final target cost incl o/h & p

The Basic Principles

The customer defines a need - not a solution - and works with the team to agree the solution

The customer selects a delivery team – and a leader of the team – which will be responsible for all aspects of design and delivery

The delivery team are incentivised to translate the need into a solution and set targets to ensure they deliver superior value in meeting the need

All parties understand and implement the principles of project integration

Contractors Costs

Contractor Costs

Profit Share

Profit Share

Customer Costs Customer Costs

Customer Waste

Contractors Waste

Waste Reduction Model

100%

70%

SMARTE East Current State SMARTE East Current State

1.  Defining objectives

2.  Defining benefits

3.  Setting budgets

4.  Planning programmes

5.  Managing programmes

6.  Managing benefits

7.  Challenging the objectives

8.   Managing resources

9.  Team experience

10.  Committing funds

11.  Programme controls

12.  Reporting effectively

13.  Leading projects

14. Market analysis and demand capacity

15. Benchmarking

16. Post-project reviews and POE

17. Communication

1. Client Leadership

1. Good long term arrangements and attitudes.2. The objectives of the schemes are well defined3. Schemes are monitored through a structured gateway process by

expert project managers.

But………

1. Programme planning only looks one year ahead which hinders continuity of work. Limited forward programme availability for contractor partners.

2. Budgets are set against historic or BCIS data. They lack detail and are

often inaccurate.

3. Managing Benefits – there is no proper follow up to asses if the objectives have been met.

 

S

Smarte East Best Practice Assessment Findings

Client Leadership.....

4. Limited performance benchmarking – between Smarte East contractors and externally.

5. Member concern due to uncertainty over VFM.

6. Lack of Consultant Framework means approaches are not consistent and benefits limited.

7. Programme and project reporting is poor and not used for management and do not drive improvement.

8. Post project reviews are limited and hence the opportunity of ongoing learning is lost.

9. Communication process at high level is good but this is not the case at ground level.

 

S

Smarte East Best Practice Assessment Findings

1.     Whole life costs

2.     Building teams

3.   Procuring effectively

4.   Collaborative working

5.   Incentivising behaviors

6.   Managing risk

7.   External learning

8.   Internal learning

9. Fair payments

10. Collaborative procurement

11. Long term relationships

12. Risk and reward sharing

13. Project integration during briefing & design

1.   Developing people

2. Local Labour and Apprenticeships

3. Equality and diversity

4. Considerate Constructors' Scheme

5. Qualified workforce

1. Skills for modern construction

2. Teamworking

3. Process Improvement

4. Modern methods including off site

1. Sustainable delivery

2. Strategy for Sustainable Construction

3. Sustainability Action Plan

4.Site Waste Management Plans

5.Local Communities

1.   Constructing safely

2. Health and safety monitoring

3. Health

Summary of Main Areas for Improvement:

Self Assessment scores are mostly good but some fundamental issues are still to be tackled including:1. Benchmarking and performance managing – setting ongoing

targets for improvement.2. Ensuring competitive pressure to deliver optimum value for money

from partners3. Developing an integrated scheme process and ensure all user,

client, designer and contractor stakeholders understand the process and benefits

4. Understand, develop and monitor capability (including contract management) ensure have capable people to manage collaborative process - including what to do when schemes go wrong.

5. Establishing a commercial target cost that motivates the contractor’s and suppliers to deliver VFM.— Understanding costs - developing more robust target costing.

6. Investing resources and supporting all parties in formalised continuous process improvement