Construction
Category Management Planning
Version 1.1 (May 2015)
2
Category Vision
To adopt
Practice
Construction
$20M Best
in savings
within
5 years Category Management processes that meet the
needs of government
Key Service Capabilities
Strategic Framework
• Financial, commercial, performance and risk
management
• Move away from transactional approach into strategic category
management approach
• Early engagement and collaboration with
government agencies and industry leaders
• Implement evidence based and result driven practices
• Align construction category with the market
• WoG approach
• Engage with government agencies
Commitments
• Engage with industry leaders and encourage innovation
• Provide internal and external stakeholders with the
best service
• Promote standardisation and fit for purpose within construction category
• Increase competition amongst suppliers
• Deliver best value for money
• Lead change by acting as a change agent
• Drive cost saving initiatives and communicate them with government
agencies
• Reduce government red tape
• Eliminate non-value adding costs and inefficiencies
• Ensure data currency and accuracy at all times
• Continuous improvement by challenging status quo
• Commitment towards supplier diversity
A comprehensive category plan will be developed once key learnings and
opportunities have been identified following completion of Best Practice
Construction Procurement Pilots
Category Scope
Construction & Facilities
Management
Construction Materials, Equipment
& Services ($6.73B)
Construction Materials
. Concrete
. Construction related
suppliers & materials
. Industrial Gas
. Internal Building
Materials
. Rails & Fencing
. Steel
Direct Professional
Services
. Architects
. Surveyors, Quantity
Surveyors & Estimating
. Engineering design,
Environmental Consulting
& Geotech Services
Civil Services
. Asphalt
. Demolition
. Traffic Management
General Contractors
. Tier 1
. Tier 2
Plant & Equipment
. Earthmoving &
Excavations
. Industrial &
Construction
Equipment Hire
1. A data re-categorisation pilot is currently being
conducted within NSWP. A detailed spend breakdown will
be available once this has been completed. 2. FM has a
separate CMP.
Building Services ($727M)
Property & FM ($2B)
Fire Protection Systems
. Fire & safety
. Locksmiths
. Security equipment
. Security services
Property
(Management & Leasing)
. Facility Management
Assets
. Land Related Expenses
. Realty Services
. Rental Payments
General Trades
. Electrical
. HVAC
. Plumbing
. Painting
. Landscaping
. General equipment & plant
repair
. Power Equipment & Services
Property Maintenance
. Cleaning Materials
. Cleaning Services
. Laundry &
Laundry Equipment
. Pest Control
. Removals
Food & Drinking
Water
. Food, Catering
& Consumables
. Drinking Water
Waste
. Recycling
. Waste
Management
4
Category Priorities and Objectives
Sub-Categories: Construction, Professional and Project Management Services
Short Term Priorities
•
Run pilot projects based best practice procurement (refer p.5)
•
Incorporate learnings from pilot projects into construction
category management and policy
•
Cost and spend data collection and analysis
•
Construction category market analysis
•
Early engagement of internal and external stakeholders
•
Performance measurement and review
•
Cut red tape
•
Standardisation across government agencies
•
Identify opportunities and implement them across government
agencies
•
Review and simplify construction government policies/procedures
Key Challenges
•
Understanding the needs of government agencies
•
Change management
•
Managing the rapid, volatile and discontinuous change in the
construction market
•
Limitations towards diversity and SMEs
•
Low flexibility as a result of standardisation
Five Year Objectives
•
Implement best practice in construction category management
and innovative construction procurement
•
Establish strategic relationships with suppliers and government
agencies
•
Maximise opportunities for SMEs
Drivers include:
•
•
•
•
•
•
•
•
Stakeholder management
Process improvement and innovation
Performance management and reporting
Challenge status quo
Diversity and SMEs
Sustainability
Knowledge management
Benefits program
Annual Addressable Spend approx. $9 -10B
Metrics
Savings ($m)
14/15
15/16
16/17
17/18
tbc
tbc
tbc
tbc
Best Practice Procurement Initiative
Features
•
•
Trial programs will be
established with
government agencies
based on early
engagement and
collaborative work
practices.
Savings may be achieved
with best practice
procurement models as
demonstrated by the UK’s
Government Construction
Strategy (2012).
Benefits
1. Early Supplier engagement
1. Lower costs
2. Integrated supply chains
2. Cost competition and control
3. Collaborative team focus
3. Improved project design
4. Transparent and agile
4. Faster speed to market
5. Governance and continuity
5. Reduced disputes, claims and litigations
6. Optimise whole life cycle costs
6. Higher client satisfaction rates
7. Clear KPI tracking
7. Reduced project risk
8. Provides cost certainty
8. Fair supplier margins maintained
9. SME facility
9. Increased SME and local business
engagement
10. Health and safety focus
Project
Scope &
Budget
Agreed
Appoint
Integrated
Team
Invite supply
chain to best
practice
design, price
and cost
discussions
Early Contractor Engagement and Collaboration
Specification
amended &
value
engineering
agreed
Tender Issued
& Evaluation
plan drafted
10. Increased innovation and sustainability
Tenders
returns
Evaluation
and Award
= Value realised
5
Contract
Management