Review of Scottish Public Sector Procurement in Construction

Scottish Health and Social Care Facilities Conference

Update on Progress and Key Outputs November 2017

1. Overview of the Construction Procurement Review

2. How the Review will support SME’s.

3. Efficient procurement

4. How the Review will support the Public Sector to deliver better outcomes.

5. Digital Data for the Built Environment.

6. Questions

Agenda

1. Overview of the Construction Procurement Review

Review of Procurement In Construction

“Our vision is of an approach which achieves better collaboration in design-led, efficient and effective public sector construction procurement and which has regard to sustainability in all senses of the word”

Review Of Public Sector Procurement In Construction

Review of Procurement In Construction

Efficient Procurement Procurement Journey Assurance Spending Forecasts Tender Process Systems Frameworks Contracts & Risk New Procurements Hub Programme

Collaborative Procurement Skills & Capability Linkages & Collaboration Benchmark Database BIM Structures Sustainable Procurement Fair Payment SME’s Housing Community Benefits Environmental Sustainability

Outcome Focused Procurement Design & Whole Life Procurement Best Practice

New Legislation

Procurement Reform (Scotland) Act 2014

The Public Contracts (Scotland) Regulations 2015

Directive 2014/24 EU Of the European Parliament

Construction Journey

A

B C

E

Outcomes & Business Case Justification

Procurement Strategy

Consultant/Contractor Selection

Asset Use

D Construction/Consultant Contracts

Define Outcomes/Benefits

Business Case Approval

Contractor Selection

Contract Award

Operating The Contracts

Commissioning

Handover

Maintain

Replace/ Decommission

Zone A

Zone C

Zone E

Consultant Selection

Zone B

Zone D

Procurement Strategy

Generic Procurement

Strategies

Decision Process

Revenue Financed

Design & Build

Integrated

Traditional

Management

Zone B

Gateway Review 2

Procurement Strategy

Order of Cost Estimate As required to set budget

Two Stage

Variants Target Cost

Frameworks

2. How the Review will support SMEs

Support for SMEs

Initiatives to support SME’s

and provide sustainable

public sector procurement

opportunities.

• Fair Payment • Hub Designer Payment Guidance. • SME Support Services • Use of Frameworks Guidance. • Spending Forecasts • Appropriate Contract Assurance • Project Bank Accounts

Objective Recommendations & Outputs

“Collaborative, Efficient, Sustainable and Outcomes Focused Procurement in Construction”

3. Efficient Procurement

Efficient Procurement

Develop more

collaborative and efficient public sector procurement

processes.

• Systems • Tender processes • Abnormally Low Tender • Assurance/PCA

Objective Recommendations & Outputs

“Collaborative, Efficient, Sustainable and Outcomes Focused Procurement in Construction”

New Legislation • European Single Procurement

Documents

4. How the Review will support Public Procuring Authorities to deliver better

outcomes

Supporting Public Sector Procurement

Support the Public Sector

to deliver greater

efficiencies and better outcomes

from procurement.

• Skills & Capability Guidance • Environmental Sustainability Guidance • Community Benefit Toolkit • Contracts & Risk

Objective Recommendations & Outputs

“Collaborative, Efficient, Sustainable and Outcomes Focused Procurement in Construction”

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 • Limited collaboration. • Improve skills development. • Limited resource.

Approach to Delivery • Baseline skill set developed. • Enhance learning opportunities. • Pooled expertise. • Explore barriers to collaboration. • Establish support structures.

“Collaborative, Efficient, Sustainable and Outcomes Focused Procurement in Construction”

Complexity Level Level 1 Level 2 Level 3 Level 4

Development Management

Good Awareness Previous Involvement Previous Involvement Experienced

Governance Experienced Experienced Expert Expert

Commercial Acumen Experienced Experienced Experienced Expert

Project Management Previous Involvement Previous Involvement Experienced Experienced

Stakeholder Management

Good Awareness Previous Involvement Experienced Experienced

Procurement Management

Good Awareness Previous Involvement Previous Involvement Previous Involvement

Contract Management Good Awareness Previous Involvement Experienced Experienced

Guideline minimum resource commitment*

5-15% 10-20% 15-30% 25-75%

Senior Responsible Officer/Project Director

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 • Inconsistent approach. • Limited knowledge sharing. • Large variety of measurement

tools.

Approach to Delivery • Identify all current guidance. • Identify coherent themes. • Align guidance to policy

strategy. • Align guidance to construction

specific elements.

“Collaborative, Efficient, Sustainable and

Outcomes Focused Procurement in Construction”

Community Benefits Overview:

Requirement to review and update the Scottish Government 2008 community benefits guidance to support Contractors and the Public Sector to procure, implement, measure and deliver effective community benefits within contracts.

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 • Heavily modified

contracts. • Disproportionate use of

cash retentions. • Lack of open discussions

on risk allocation.

Approach to Delivery • Promote Standard T&C’s. • Improve guide on contract

selection focussed on risk. • Guide on pain/gain

arrangements. • Alternatives to retention.

5. Digital Data for the Built Environment

Digital Data for the Built Environment

Digital Data supporting

collaborative & efficient whole life outcomes.

• Benchmark Database • Whole Life Appraisal Tool

• BIM Level 2 Programme

Objective Recommendation & Outputs

“Collaborative, Efficient, Sustainable and Outcomes Focused Procurement in Construction”

• BIM Level 2 by April 2017.

• Better sharing of benchmark &

performance data.

• Embed Whole Life Appraisals within Projects

• Promote Design Led Outcomes Review of Scottish Public Sector Procurement In Construction

Promoting Digital Working & Data

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

• Limited knowledge sharing. • Challenges in obtaining data. • Limited level of data collated. • Variation in how/what data is

collected.

Approach to Delivery • Develop database • Promote consistency • Promote Transparency • Support budgeting & project

development. • Develop Hub pilot database

“Collaborative, Efficient, Sustainable and Outcomes Focused Procurement in Construction”

National Benchmark Database

Community Infrastructure Benchmark Database:- - School - Primary Healthcare - Offices

National Benchmark Database

This will offer a consistent method of reporting, providing decision makers with key information and develop a flexible reporting tool which puts an emphasis on “Whole Life Outcomes” not just capital costs.

Commercial Assessment

Design Outcome Assessment

Environmental Assessment

Whole Life Appraisal Tool

“ BIM should be introduced in central government with a view to encouraging adoption across the public sector. The objective should be that, where appropriate, projects across the public sector adopt BIM level 2 by April 2017.” Review of Scottish Public Sector Procurement In Construction

Building Information Modeling

• Issue Scottish BIM Guidance for consultation 31st Oct 2016

• Launch BIM Guidance Website 31st January 2017

• BIM Level 2 Objective 31st April 2017

BIM Implementation Plan

Questions