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ProCure21:a new treatment

BRIEFINGS

NHS Estates, the property arm of the National Health Service, has developed a new mechanism for the procurement of its capital works programme, worth about £1.8 billion a year. ProCure21 is designed to address the Government's demands for improvements in quality, efficiency and value for money. ProCure21 aims to achieve this through the appointment of fully partnered supply chains employed under specific framework agreements.

In this Briefing we take a look at the opportunities offered by ProCure21, as well as how the system will operate

Dissecting the idea

ProCure21 seeks to put into effect many of the concepts promoted by Rethinking Construction. Important factors will include:

An effectively managed supply chain.

The adoption of lean thinking techniques such as standardisation, prefabrication and sharing knowledge.

Extensive use of partnering requiring major culture change.

The majority of publicly funded NHS schemes will be delivered under ProCure21.

A suite of training workshops has been designed to assist all organisations that want to deliver NHS schemes to develop an understanding of ProCure21, the benefits that can be achieved and to provide a route map for practical implementation.

Training workshops are at the heart of the matter

The ProCure21 team has developed a number of training workshops to help organisations that want to join ProCure21 supply chains:

Executive Briefing: A focused and concise strategic overview of the ProCure21 approach.

Becoming a Partner: Guides supply chain organisations through the process of becoming involved in ProCure21.

The ProCure21 Experience: Provides an understanding of the principles, a clear picture of the learning curve and an insight into the more detailed issues and techniques described in subsequent workshops.

Starting an ProCure21 Scheme:

Practical guidance for starting a ProCure21 scheme.

Using the ECC Contract: Explains the main principles of the ECC Contract and provides practical guidance for implementation on ProCure21 schemes.

Setting Target Cost and Open Book Accounting: Provides an understanding of the key issues and practical guidance for implementation on ProCure21 schemes.

Effective Collaborative Working:

Explores how teams will be structured, roles/responsibilities and how to work as effective partners.

Performance Management: Outlines the main principles of performance management and provides practical guidance for using the NHS ProCure21 Key Performance Indicators that will be essential in the drive for continuous improvement.

Design & build

The NHS client and PSCP will develop the design together, including specialist input from the supply chain.

A target price will be built up from the cost models that formed the financial element of the selection process for the PSCP under the framework agreement. The target price is known as the Guaranteed Maximum Price (GMP).

Cost management will be administered on an open-book basis under the scheme agreement and will be based on an adapted ECC form of contract.

Partnering relationships and collaborative working will be essential ingredients in successful delivery of a ProCure21 contract, combined with effective supply chain management and continuous improvement.

Performance will be measured against ProCure21

Key Performance Indicators and the whole process will be benchmarked against UK and international performance.

Preparing for full operation ProCure21 has been operating as a pilot framework in two regions, the northwest and West Midlands, since May 2002. Following a rigorous selection process, five PSCPs were appointed under a framework agreement and are currently delivering ProCure21 projects.

In December 2002 the NHS announced its intention to roll out ProCure21 nationally.

The closing date for prospective PSCPs to express an interest was January 31, 2003. After a detailed selection process PSCPs will be appointed onto the national framework this autumn.

Prospective PSCPs are now developing their approach and planning the structure of their supply chains while Cutting through ProCure jargon PSCP Principal Supply Chain Partners A small number of preferred suppliers that will be appointed under a national framework agreement to provide NHS clients with single point responsibility for the delivery of schemes.

These will mainly comprise consortia of major contractors, designers and consultants.

PSCM Primary Supply Chain Members

Providers of key construction services appointed by a PSCP as part of its supply chain. These could include designers, cost consultants, constructors, mechanical and electrical designers/ installers and facilities managers SCMSupply Chain Members Providers of construction services appointed by a PSCP as part of its supply chain - including subcontractors, suppliers and manufacturers.

Framework Agreement - an agreement between NHS Estates and a PSCP to provide construction services.

Scheme Agreement - the specific contractual agreement for a Scheme between the NHS Client and the chosen PSCP.

Framework agreements ProCure21 will be delivered by carefully selected supply chains assembled under one of two framework agreements:

Framework Agreement for Diagnostic and Treatment Centres (DTCs)

A single framework will operate across the whole of England and will be managed regionally

Between five and 12 PSCPs will be appointed under the framework agreement

Estimated value of the works: £600 million over the 18 months duration of the frameworks

This first phase to be completed by March 31, 2005 Framework Agreement for Publicly Funded Schemes

A single framework will operate across the whole of England and will be managed regionally

Between five and 12 PSCPs will be appointed under the framework agreement

Estimated value of the works: £1.4 billion per year initially

It is envisaged that the framework agreements will be in place for not less than five years

How it works

Each PSCP will assemble, co-ordinate and manage its own integrated supply chain, including PSCMs and SCMs.

Some of these, particularly specialists, will operate nationally while others will work on regionally. Any organisation wanting to work on future NHS ProCure21 Schemes will need to be part of one of these supply chains.

When an NHS client wants to construct a new scheme it will select a PSCP, including its associated supply chain, from the framework agreement.

Winning a slice of the pie

All organisations involved in a supply chain will need to understand the ProCure21 strategy, develop new skills, address culture change and demonstrate that they can implement new tools and techniques successfully.

For further information

Visit the ProCure21 website at www. nhsprocure21. gov. uk

Contact Jennifer Lewin by telephone on 0113 254 7276 or by e-mail at jennifer. lewin @doh. gsi. gov. uk

ProCure21 Training Workshops: Contact Louise Downs or Stuart Carmichael by telephone on 0114 278 8687 or by e-mail at procure21@jrknowles. com or visit the ProCure21 website at procure21. gov. uk

About the author

Sharron Taylor is a director of Knowles Management and has responsibility for developing the training initiative for ProCure21.

You can contact her on 0114 278 8687 or e-mail: procure21@ jrknowles. com