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Excellence chief to chair procurement trials steering group

The chief executive of Constructing Excellence will lead a steering group that will monitor government procurement trials across dozens of construction projects.

The Cabinet Office is planning to set up a Trial Projects Support Group that will report on and monitor the success of the trials, and any subsequent evaluation and roll out programme.

Government is understood to be finalising details of the group, which will report on projects being run by major firms such as Balfour Beatty.

Don Ward, CEO of Constructing Excellence - the member-led organisation working to improve industry performance across all sectors and supply chain members - will chair the trial projects support group, which will monitor more than 30 projects evaluating the benefits of new procurement routes.

Trial projects testing new procurement and construction management methods are in the process of being rolled out across departments. 

The government is trialling three different methods, looking at opportunities for generating cost savings, efficiencies, innovation and shared learning to the benefit of the entire supply chain. 

The trials will include integrated project insurance; cost-led procurement; and the two-stage open book method. Within those there will be adoption of building information modelling; soft landing - which aims to align the interests of designers and constructors with those who use and manage assets; project bank accounts; and lean procurement (which includes restricted, open and competitive dialogue, underpinned by a set of lean sourcing key principles).

Projects piloting trials include an £100 million town hall complex for Manchester City council and a £3.75m upgrade to research suites for the Animal Health and Veterinary Laboratories Agency. Both will trial the ‘soft landings’ approach, designed to align the interests of builders and end-users.

Balfour Beatty’s £25m women’s and children’s department for Luton and Dunstable NHS Foundation Trust will test the new cost-led procurement method.

Cost Led Procurement (CLP) - The client puts in place a framework agreement with one or more integrated supply chain teams (encompassing designers, constructors, specialist suppliers and manufacturers). Teams are selected on their ability to work in a collaborative environment to deliver below the cost ceiling on the first project through continuous improvement, and achieve cost reductions on subsequent projects while maintaining the required quality outcomes.

Integrated Project Insurance (IPI) - The client holds a competition to appoint the members of an integrated project team, delivering under a new form of insurance that covers cost overruns up to an agreed liability cap. The project is supported from the outset with an assurance team that ensures the right project cost plan has been agreed and which monitors and reports to the insurer on the key project risks including the levels of integration achieved by the team. Scoring may include elements assessing competence, capability, proven track record, maturity of behaviours, and fee declaration. The chosen team then works up a preferred solution that will deliver the outcome defined by the client, with savings against existing cost benchmarks.

Two Stage Open Book - the client invites suppliers on an existing framework agreement to bid for a project contract on the basis of an outline brief and cost benchmark. A number of contractor-consultant teams compete for the contract in a first stage with bidders being chosen based on their capacity, capability, stability, experience and strength of their supply chain, and fee (profit plus company overhead)The winning team then works up a proposal on the basis of an open book cost that meets the client‟s stated outcomes and cost benchmark as a second stage. A key outcome of this model should be to further reduce supply chain bidding costs.

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