Constructing West Midlands

Martin Merrix

Divisional Manager, Urban Design

Current arrangements Term contracts for non-housing repair and

maintenance works < £100k• five year duration commenced 2006• development of previous term contracts

Framework for Capital Works > £100k• Seven year duration commenced 2004• Innovative ‘partnership’ with three principal contractors

– the Birmingham Construction Partnership

Partnership benefits Approx £6-8 million tendering costs saved

per annum Better risk allocation and management Early contractor and supply chain involvement 62 strategic supply chain partners 221 jobs created / 200+ training opportunities Supports 1000+ jobs in direct supply chain

Partnership benefits Reduced pre-construction time Significantly improved time and cost certainty Collaborative procurement – joint purchasing Total joint working – client, end-users, designers,

contractors, supply chain

Early settlement of final accounts – no retention

Partnership benefits

Better design, WLC and sustainability Continuous improvement across BCP/client Safe sites with good welfare facilities Improved quality of construction Changed attitudes

What are the benefits?BCP COMPARISON TO NATIONAL KPI'S JUNE 2010

61%

46%

77%

84%

53%

59%

63%

92%

98%

86%88%

100%

95%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cost Predictability(Design)

Cost Predictability(Construction)

Quality (Impact atHandover)

Client satisfaction Time Predictability(Design)

Time Predictability(Construction)

Safety

National Comparator

BCP - Whole Partnership

Initiatives: Achieving Excellence in Construction The partnering and integrated team approach: avoiding fragmentation

and adversarialism Development of long-term relationships: one off lowest cost is OUT Improved skills development and empowerment: effective Project

Sponsorship, collaboration, tools and ‘infrastructure’ Adoption of performance measurement indicators: if you are not

counting you are only practising; Public Sector Construction Database Use of tools for value and risk management and whole-life costing:

Gateway, AE4, Green Book Supplement, Fair Payment in Construction, Demand Management and market analysis

NAO expects this initiative to save £2.6 billion per annum

Performance reports produced from PSCD

ORGANISATION X AEC SpecificProject Performance and resulting benefits Your contribution to the overall savings of

£823m is £2.0m, which is calculated using the Org X average project performance figure of 6.7%.

Please consult your spending team or the HMT VfM team if you intend to include this as part of your Departments VfM savings and have any queries about its qualification.

Birmingham Construction Partnership 09/10 saving: £13.1m on £130m p.a.

Future Arrangement:Constructing West Midlands

What are we proposing?

Framework available to all public sector bodies in the West Midlands region

Covering all types and values of work Duration 4 + 2 + 2 years To build on the successes of the Birmingham

Construction Partnership

‘Constructing West Midlands’ Region

Framework Category Proposal

Category 2

Major Public Construction Projects

Major Programmes of Work

£0 – 500 k £500k upwards

Category 1

Repair and Maintenance works

Planned / Reactive

Minor Building works

Quality / Price split 50/50 Quality / Price split 60/40

Constructing West Midlands

Framework Lots

£0 – 500 k £500k upwards

Quality / Price split 50/50 Quality / Price split 60/40

Category 1Lot 1 - Legionella – North

Lot 2 - Legionella – South

Lot 3 - Elec. and Mech. - North

Lot 4 - Elec. and Mech. - South

Lot 5 - Building - North

Lot 6 - Building – South

One contractor per Lot and only North or South per discipline

Category 2Lot 7 – Capital Projects or

Programmes of work

Up to four contractors

Constructing West Midlands

Timeframe Industry feedback 8 September 2010 Issue OJEU contract notice 8 November 2010 PQQ issue 15 November 2010 PQQ returns 22 December 2010 Issue tender documentation 18 February 2011 Tender submissions - close 31 March 2011 Contract award 29 July 2011

Operational start 1 October 2011

Constructing West Midlands

Key Drivers

Collaborative and integrated approach / working between clients, contractors, SMEs, supply chains, suppliers, end users and so on

Delivery of responsive, efficient and cost effective building / construction services to participating public bodies – demonstrating measurable value for money

Key Drivers Continuous improvement, innovation and cost

reduction (process and delivery) year on year Delivering excellence in supply chain management Creation and maximisation of opportunities for

supply chain / SMEs local to the points of delivery

Creation of local jobs and training (direct and indirect) through ‘Targeted Recruitment and Training’ – delivering measurable outcomes (for example, 60 person weeks of new entrant training per £million spend to achieve NVQs)

Reduction of environmental impact, carbon and waste

Delivery of whole life value and whole life carbon throughout design and construction

Key Drivers

Supply Chains

First tier contractors to help develop supply chain Creation of opportunities for SMEs local to the point

of delivery including, for example, use of Find it in Birmingham

Early engagement of supply chain on projects Collaborative procurement for and by suppliers To support targeted training and recruitment

objectives