Stakeholder Engagement Event
Workshop Discussion
8th September 2015
Issues:
Notified in advance
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BIM
The Procurement Journey.
Construction Procurement Capability Assessment (PCA).
Spending forecasts.
Tender process.
Cash retentions.
Community Benefits.
PBAs.
PQQs.
Construction skills.
Contracts & Risks.
Alternative methods of procurement.
Raised in Session 1
•
Implementing The Recommendations
Construction
Procurement
Review
Themes
Policy
Workstreams
SG
Delivery
Workstreams
SFT
Collaborative
Procurement
1
4
Efficient
Procurement
5
4
Sustainable
Procurement
3
2
Outcome Focussed
Procurement
1
1
67
Recommendations
Theme – Collaborative Procurement
Workstream - Structures
Overview
Create a structure to provide leadership and a focal point for construction
procurement policy guidance to ensure infrastructure is properly planned.
Issues
Approach to Delivery
• McClelland Report did not
deal with Construction
• Substantial capability
exists, but…
• Limited co-ordination
• Strengthen SG Policy Team
• Develop Collaborative
relationships
• Create structure for
implementation of Review
Theme – Collaborative Procurement
Workstream - Skills & Capability
Overview
Procuring Authorities require the right mix of construction procurement skills
and expertise. The recommendation is to create a strategy to measure,
share, develop and allocate skills and expertise more effectively across the
public sector.
Issues
Approach to Delivery
• Limited collaboration.
• Improve skills
development.
• Limited resource.
• Baseline skill set developed.
• Enhance learning
opportunities.
• Pooled expertise.
• Explore barriers to
collaboration.
• Establish support structures.
Theme – Collaborative Procurement
Workstream - Linkages & Collaboration
Overview
Promote the benefits and opportunities of identifying linkages between
projects and of adopting a collaborative approach between public sector
bodies. Address how regional, sectorial and programming synergies across a
pipeline of work can be co-ordinated.
Issues
Approach to Delivery
• Limited strategic reviews.
• Opportunities for
collaboration not fully
exploited.
• Lack of pipeline
transparency
• Best practice developed.
• Promote co-ordination of
spend.
• Consider appropriate regional
forums involving industry.
Theme – Collaborative Procurement
Workstream - Benchmark Database
Overview
Using robust and readily available data from historic projects will support the
public sector in the development of future projects. Providing Procuring
Authorities with accurate benchmark data on costs, design and performance
will support better outcomes within infrastructure procurement.
Issues
Approach to Delivery
• Limited knowledge sharing.
• Challenges in obtaining
data.
• Limited level of data
collated.
• Variation in how/what data
is collected.
•
•
•
•
Develop database
Promote consistency
Promote Transparency
Support budgeting & project
development.
• Develop Hub pilot database
Theme – Collaborative Procurement
Workstream - Benchmark Database
Database
Accessible
External Website
Central Library of Data
Sharing knowledge
Support demonstration of VfM
Monitor Programme Performance
Promoting Hub
Theme – Collaborative Procurement
Workstream - Benchmark Database
Database
Accessible External
Website
•
Capital Costs
•
FM & LCC Costs
•
Design Solution (Nett:Gross, Design solution, BREAM)
•
DBFM Specific Costs (SPV, Advisors, Insurance, Funding)
•
Programme Performance (Cost, Programme Certainty)
•
Community Benefits
•
Participant Costs
Theme – Collaborative Procurement
Workstream - Benchmark Database
Procuring
Authorities
Existing PA
Databases
SFT
hubCos
Data
Accessible External
Website Database
BCIS
Theme – Collaborative Procurement
Workstream - Benchmark Database
Theme – Collaborative Procurement
Workstream - Building Information Modelling (BIM)
Overview
BIM offers the opportunity to adopt a new collaborative approach which has
the potential to achieve more efficient and effective ways of working. The
objective is to develop the implementation of BIM and encourage its adoption
across the entire public sector. The review recommends the use of BIM level
2 by April 2017 on all construction projects.
Issues
Approach to Delivery
• Limited use within industry
• Limited understanding of
the client benefits.
• Development of industry
expertise.
• Supported by Construction
Scotland BIM group.
• Complete pilot project.
• Develop strategy.
• Develop guidelines.
• Liaise with UK BIM task force.
• Demonstrate benefits.
Theme – Collaborative Procurement
Workstream - Building Information Modelling (BIM)
MODELLING
Or
MANAGEMENT
Theme – Collaborative Procurement
Workstream - Building Information Modelling (BIM)
Theme – Collaborative Procurement
Workstream - Building Information Modelling (BIM)
Theme – Collaborative Procurement
Workstream - Building Information Modelling (BIM)
Theme – Collaborative Procurement
Workstream - Building Information Modelling (BIM)
Theme – Collaborative Procurement
Workstream - Building Information Modelling (BIM)
Current Activity
• Appointment of David Philp to Chair the Scottish BIM Delivery Group
• Issue of capability survey to all procuring authorities
• Publication of the implementation plan.
• Continue launch forums with procuring authorities
• Identify Pathfinder Projects
• Conclude Horizon 1 by Oct ‘15
Theme – Collaborative Procurement
Workstream - Building Information Modelling (BIM)
SFT Website for Update
http://www.scottishfuturestrust.org.uk/our-work/sft-build/constructionprocurement-review/building-information-modelling-bim/
E-mail
bimdeliverygroup@scottishfuturestrust.org.uk
Theme – Efficient Procurement
Workstream - Procurement Journey
Overview
To develop new standardised guidelines in a revamped construction
procurement manual based on a newly defined construction procurement
journey.
Issues
Approach to Delivery
• Lack of awareness of
guidance
• Current guidance difficult
to access
• No common
understanding of
construction procurement
journey
• Develop a construction
procurement journey
• Link to journey for goods and
services
• Review and re-draft
construction procurement
manual
• Digitise web based manual
Theme – Efficient Procurement
Workstream - Assurance
Overview
Create a consistent, comprehensive, proportionate and appropriate system
for assurance and review of construction procurement capability and activity
particularly.
Issues
Approach to Delivery
• Project assurance is
essential
• Need to ensure
consistency
• Need to ensure
appropriateness
• Collect best practice
• Review current Gateway
Review Process
• Identify areas of need where
Gateway reviews apply to
construction
• Develop construction specific
module for the Procurement
Capability Assessment
Theme – Efficient Procurement
Workstream - Spending Forecasts
Overview
To develop an accurate means of tracking actual and planned pipeline
expenditure by public bodies to allow more efficient planning by both buyers
and suppliers of construction to take place.
Approach to Delivery
Issues
• Economic uncertainty
• Inability of industry to
plan for future
• Feast or Famine for
contractors and
consultants
• Barriers to collaborative
spend
• SG Infrastructure
Investment Plan is not
universal
• Review current practice
• Work with public sector
bodies and industry to
develop mutually acceptable
model pipeline
• Review current reporting
processes
• Develop guidance for
Construction Procurement
Manual
Theme – Efficient Procurement
Workstream - Tender Process
Overview
To review current procurement processes including SPQQ, PCS, PCS
Tender, Quick Quote to ensure that they are appropriate for construction.
And to ensure that the process identifies the right person/company for a job
whilst only requiring the bidder and the tenderer to provide the information
which is essential to allow a decision to be made.
Issues
Approach to Delivery
• Lack of awareness of
procurement processes
• Challenge culture
• New legislation
• Proportionality
• Review existing guidance and
processes
• Consultation and buy in by
industry
• Incorporate process into
construction procurement
journey
• Review existing guidance and
re-issue as necessary
Theme – Efficient Procurement
Workstream - Systems
Overview
To ensure that all content on Public Contract Scotland and Public Contracts
Scotland Tender is relevant for construction procurement where appropriate.
Issues
Approach to Delivery
• Procurement Reform Act
(Scotland) 2014
mandates use of online
tender systems
• Likely to be commenced
late this year
• Review existing PCS and
PCST
• Develop construction specific
modules and categories
where appropriate
• New guidance for
Construction Procurement
Journey and Construction
Procurement Manual
Theme – Efficient Procurement
Workstream - Frameworks
Overview
Guidance on best practice in the use of framework agreements should always
be followed, in particular in allowing opportunities for SMEs to participate.
Issues
Approach to Delivery
• Barrier to SME’s.
• Aggregation of small
contracts.
• Address the impact to local
SME’s.
• Benefits of aggregated
contracts.
• Review UK wide frameworks.
• Procurement Strategy
considerations.
• Develop guidance.
Theme – Efficient Procurement
Workstream - Contracts & Risk
Overview
Support and improve the approach to contract selection which considers
appropriate risk allocation. Avoid amendments to standard forms. Consider
painshare/gainshare arrangements. Alternatives to cash retentions.
Issues
Approach to Delivery
• Heavily modified
contracts.
• Disproportionate use of
cash retentions.
• Lack of open discussions
on risk allocation.
• Promote Standard T&C’s.
• Improve guide on contract
selection focussed on risk.
• Guide on pain/gain
arrangements.
• Alternatives to retention.
Theme – Efficient Procurement
Workstream - New Methods of Procurement
Overview
Assess and consider new procurement initiatives within the industry. These
include the UK Government trials of its three new methods of procurement
and the self-delivery of contracts promoted by Scottish Water.
Issues
Approach to Delivery
• Integrated Project
Insurance.
• Cost Led Procurement.
• Two Stage Integrated Team.
• Self – Delivery contracts.
• Liaise with UK Gov on
progress of trials.
• Identify and consider benefits
in their application within
Scotland.
• New guidance if appropriate.
Theme – Efficient Procurement
Workstream - Hub Programme
Overview
Develop guidelines in relation to the Hub programme which support improved
payment terms, the monitoring of hubco performance and the exchange of
project data. Consideration of a minimum contract threshold.
Issues
Approach to Delivery
• Limited knowledge sharing
within the public sector.
• Extended periods between
milestone payments.
• Guidance on payment terms
issued May 14.
• Develop Hub Manual.
• Develop Hub database.
• Assess benefits of minimum
contract value.
Theme – Efficient Procurement
Workstream - Hub Programme
Reponse
• New Designer Payment Guidance
http://www.scottishfuturestrust.org.uk/publications/hub-pdo-guidance-note-april2014/
• Hub Project Manager
http://www.scottishfuturestrust.org.uk/files/publications/hub_North_Territory_projec
t_managers_handbook.pdf
• Hub Database
• Recommendaiton Paper on minimum contract thresholds
Theme – Sustainable Procurement
Workstream - Fair Payment
Overview
Work collaboratively to ensure that all contractors and sub-contractors to
public contracts receive all monies due on time and to a fair payment
schedule.
Issues
• Industry reliance on
supply chain credit
• Late payment of supply
chain
Approach to Delivery
• Work with industry to develop
industry agreement to a fair
payment charter
• Continue to pilot project bank
accounts
• Develop contractual fair
payment terms for public
contracts
• Update Construction
Procurement Manual
What is a Project Bank Account?
• Ring-fenced, electronic bank account, from which payments are
made directly and simultaneously by a client to members of the
supply chain.
• Accelerates payment due to tiers 1 – 3, usually within 3 to 5 working
days of the Client paying the certified value of the monthly
assessment into the PBA.
• Has Trust Status which secures the funds in it and can only be paid
to the beneficiaries – the supply chain members are named in the
account
What is a Project Bank Account?
• Similar to an escrow account
• PBAs aren’t that different to other bank products, it is the context in
which it is used that makes it different
• Medium through which interim payments are made
• Provides clients visibility & auditability over timing/amounts of
payments
• Simple and cost effective to set up and operate
What a Project Bank Account doesn’t do
• It does not involve client prefunding but can be used as receptacle for
project funds if a client wishes
• It does not cut across any contractual provisions including:
• those dealing with the preparation and submission of interim
applications
• valuation, authorisation or certification of interim payments
• It does not take away the lead contractor’s responsibility for managing
the supply chain so that the work is performed in accordance with the
contract
• It does not negate any rights of abatement and/or set-off
Project Bank Accounts
Which PBA model
• Joint client & contractor account
Key requirements
• Two parties to Trust Deed
• Both client and contractor authorise payments
Dual agreement is required before payment is made,
i.e., the main contractor / client can only act when both parties
have agreed to the payment and one party can not alter the
payment without the agreement of the other party
PROJECT BANK ACCOUNTS
Traditional
Project Bank Account
Client
Payment
Client
Payment
Bank
Mandate/
Certified
payment
Main
Contractor
PBA
Typically 60 days
Sub
Contractor
Typically 3-5 days
Sub
Contractor
Sub
Contractor
Main
Contractor
Sub
Contractor
Sub
Contractor
Theme – Sustainable Procurement
Workstream - Small and Medium Sized Enterprises
Overview
To maximise the opportunities for SMEs to compete for public contracts
Issues
Approach to Delivery
• Difficult for SMEs to get
on national frameworks
• Lack of construction
procurement knowledge
of SMEs
• Ensure appropriate
frameworks are used
• Develop support mechanisms
for SMEs
• Work with industry
• Review framework guidance
• Incorporate into Construction
Procurement Manual
Theme – Sustainable Procurement
Workstream - Housing
Overview
Encourage and enhance active collaboration in procuring affordable housing
across Scotland
Issues
Approach to Delivery
• Large Sector: 40 – 50
HAs and 23 LAs building
houses.
• Budget pressures
• Inconsistent co-ordination
and co-operation
• Review of previous
collaborative pilots.
• Review will inform next steps
• May include further pilot
collaborative projects
• Further guidance to be
developed.
Theme – Sustainable Procurement
Workstream - Environmental Sustainability
Overview
Develop and promote guidance in supporting the Public Sector to deliver to
the sustainable procurement agenda. Specifically in relation to environmental
wellbeing. This will support a coherent and joined up approach in obtaining
best environmental outcomes from procurement within infrastructure.
Issues
Approach to Delivery
• Inconsistent approach.
• Limited knowledge sharing.
• Large variety of
measurement tools.
• Identify all current guidance.
• Identify coherent themes.
• Align guidance to policy
strategy.
• Align guidance to construction
specific elements.
Theme – Sustainable Procurement
Workstream - Community Benefits
Overview
Requirement to review and update the Scottish Government 2008 community
benefits guidance for construction. This revision to the guidance should
support Contractors and the Public Sector to procure, implement, measure
and deliver effective community benefits within contracts.
48 – Update 2008
Community Benefits
Guidance
49 - PS have
strategic
objective for CB's
and outline in
tender
50 - Guide to
Contractor to
design, deliver
CB's
51 - Guide to PS
to assess CB at
ITT stage
52 - Promote and
investigate share
apprenticships
53 - Guide to
monitor
performance
(KPI's)
65 - Industry
support PS
deliver CB's
Theme – Sustainable Procurement
Workstream - Community Benefits
Issues
• Inconsistent requirements within tenders.
• Limited knowledge sharing in adopting community benefits strategies.
• Challenges in evaluating tender price and benefits.
Approach to Delivery
Promote CITB Client Base Approach
Guidance on procurement & tendering
Community Benefits
Identify and Share all funding sources
Shared apprenticeship pilot and develop
model
New Community
Benefits
Construction
Guidance
Included in
Scottish
Government
Community
Benefits
Guidance
Note
Theme – Sustainable Procurement
Workstream - Community Benefits
COMMUNITY BENEFIT TOOLKIT FOR
CONSTRUCTION
Publish – Aug 2015
Toolkit to support the embedding of
community benefits within procurement.
Focus on Community Benefits which
are deliverable, proportionate and
specific to the contract.
A toolkit for both buyers and suppliers.
Theme – Sustainable Procurement
Workstream - Community Benefits
Community
Benefits
Pre-Procurement
Procurement of
Community
Benefits
Lesson Learned
Benefits which are
Proportionate &
Deliverable
Reporting of
Community
Benefits
Monitoring of
Community
Benefits
Theme – Sustainable Procurement
Workstream - Community Benefits
Theme – Sustainable Procurement
Workstream - Community Benefits
Theme – Sustainable Procurement
Workstream - Community Benefits
Type Of Benefit
Consideration When Defining The Benefit
Employment
New Entrants






Specify the Job Type (M&E/Joiner/Operative)
Specify duration of unemployment prior to employment on project.
Level of experience prior to employment. (ie no skills & experience)
Duration of new employment before benefit deemed to be achieved. CITB
advise 12 weeks.
Unit for measurement (Usually nr of new entrants)
Specify evidence/information required to demonstrate delivery of the
benefit.
Theme – Sustainable Procurement
Workstream - Community Benefits
• Link to key organisation
• Appendix A contains detailed list of
initiatives and source for funding
and support.
• Current list contains 190 different
support initiatives.
• Included for both public & private
sector
Theme – Sustainable Procurement
Workstream - Community Benefits
• Community Benefits Policy & Objectives
• Effective Procurement
• Monitoring & Reporting
• Partnership & Community Engagement
Theme – Outcome Focussed Procurement
Workstream - Whole Life Cost/Design Led Procurement
Overview
In the development of a business case and procurement strategy, Procuring
Authorities should ensure a focus is made on service outcomes. To facilitate
this approach, further guidance should be developed to embed design and
whole life costing early within the development process.
Issues
Approach to Delivery
• Greater focus on the capital
costs than the operational
cost.
• Spend to save not afforded
priority.
• Perceived barriers to the
early procurement of
designers.
• Promote best practice.
• Design- Led research and
guidance.
• Tools to support early
application, reporting and
consideration.
• Develop reporting templates.
• Support the procurement of
the correct expertise.
Theme – Outcome Focussed Procurement
Workstream - Whole Life Cost/Design Led Procurement
Definition
Theme – Outcome Focussed Procurement
Workstream - Whole Life Cost/Design Led Procurement
Output
• WLC Scorecard
• Consistent reporting
• Promote assessment
on WLC.
• Support approval
process.
• Support VFM over
lifetime not just capital
cost.
Input
• Consistent data
• Whole Life Cost
Assessment
• Consistent data
parameter (Yrs etc)
WLC Scorecard
Theme – Outcome Focussed Procurement
Workstream - Best Practice
Overview
Develop best practice resource including learning lessons for all aspects of
investment and construction procurement
Issues
Approach to Delivery
• Inconsistent methods of
prioritisation of
investment
• Inconsistent availability of
lessons and consequently
best practice
• Infrastructure Investment
Board reviewing current
investment decision practice
• Project currently underway to
develop learning lessons
• Guidance to be included in
Construction Procurement
Manual and aligned to
Gateway Reviews