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Framework offers a port in the storm

In the 12 months since its launch, NHS building framework ProCure21+ has provided its winning contractors with £640 million in work.

The volume may surprise the industry, as when the framework went live on 1 October last year it hardly raised a murmur above the din over impending public sector spending cuts.

Chancellor George Osborne was preparing the 2010 Comprehensive Spending Review that slashed capital budgets across Whitehall, and there seemed little hope for the fledgling framework.

Now the six contractors that fought so hard to win positions on ProCure21+ have plenty of reasons to celebrate its first birthday.

There has been the equivalent of a project a week to bid for and procurement processes have been as short as four weeks.

Even health secretary Andrew Lansley’s controversial reform bill has failed to dampen health trusts’ enthusiasm for the framework.

ProCure21+ saw contractors Miller and Willmott Dixon joining Balfour Beatty, Interserve, Kier and Vinci/Sir Robert McAlpine, which already had places on the earlier framework, ProCure21.

But expectations had dipped dramatically since the heady public sector spending days of 2009, when more than 50 firms expressed an interest in the framework.

“When I briefed the board about what ProCure21+ would give us, I painted a much more pessimistic picture of workloads,” says Interserve divisional director for health Andrew Jowett.

There were a few nervous weeks before the first projects came into the framework, but in early November a fierce battle ensued for more than £100m of work.

Kier won the first two jobs, for Isle of Wight NHS Primary Care Trust and Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust.

The floodgates then seemed to open and there has been around a job a week tendered since, with 52 projects worth about £750m pouring into the framework so far, £110m of which are still to be awarded.

Kier Health senior director Gary Barnes says: “In August, which is traditionally slow, we had three interviews in a week. It’s been hard to get away on holiday this year.”

Competitive tenders

As the work came in - from £450,000 single jobs to £60m development programmes - tightly fought contests erupted over almost every job.

“The competition is intense and the quality of work you need to put in to win a bid is ratcheting up all the time,” says Interserve’s Mr Jowett. “There is a little bit of strategy but most schemes have five bidders, if not all six.”

Kier continued to rack up medium-sized schemes, while public sector construction giants Balfour Beatty and Interserve also picked up regular projects.

Then Vinci and Sir Robert McAlpine’s Integrated Health Partnerships made the reckoning with two major deals earlier this year.
IHP was selected to work on a reconfiguration scheme at Stevenage’s Lister Hospital, along with a new-build inpatient mental health facility in Blackpool, worth a combined total of almost £100m.

As the spring came round, newcomers Willmott Dixon and Miller were still to pick up their first wins through the framework.

“The first six months were difficult,” concedes Willmott Dixon health manager Michael Clarke. “We had a very good track record of written submissions and were going into the interview stage with top marks, but we were not performing well there.”

Eventually Mr Clarke, brought in from the NHS specifically for the framework, cracked the code.

“After a lot of soul searching we got it together and since April we have won as many schemes as anyone else.”

In May, Miller scored a major coup in its campaign when it appointed former Laing O’Rourkehealth chief and ProCure21 figure Andrew Cartwright as director of health.

Within weeks of his joining, Miller had secured £40m of work for South Devon Healthcare NHS Foundation Trust.

Rivals united

The four firms that came from ProCure21 have each won more than £100m, but the new boys are catching up fast. The contractors insist they are partners rather than rivals, however, and pool knowledge gained on jobs.

“The six of us meet regularly. We want the framework to be a success so that people keep using it,” says Mr Clarke. “There is a collaborative feel to it and lots of us have known each other for a long time.”

As well as collaborating with each other, the contractors ensure they work closely with trusts.

The bidding process does not involve price, so they are selected on their ability to work as partners, as well as their skills and experience.

The companies hope to use their relationships with trusts to help the NHS create work, by helping them save money through more efficient buildings.

Mr Barnes says: “It is a partnering framework; it’s not adversarial and if people use it correctly it should lead to a more satisfactory outcome than other methods.”

Mr Jowett adds: “The work is more strategic than under ProCure21. Rather than just rebuilding a ward, it is about early involvement and helping redesign facilities, which allows us to use the skills we have invested in.”

The contractors are confident the framework, which does not provide funding but allows trusts to spend government capital if they can make the business case, will remain popular.

“It will continue to be well used. The NHS estate needs a lot of work to bring it up to standard,” Kier’s Mr Barnes says.

If its success continues, ProCure21+ should provide a practical example of how efficient procurement and a partnering approach can allow capital works to take place in the toughest of spending environments.

For suppliers, the benefits are even more immediate. With price being taken out of the bidding equation, other factors grow in importance.
“Most trusts want a local supply chain and we target 60 per cent of our spending coming within 30 miles of a project,” says Mr Clarke.

 

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