Intelligent Procurement

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1 Intelligent Procurement Lessons and pitfalls Making a Difference - Construction - Stewart Heaney Divisional Director Construction, CPD

2 Making a Difference Construction Procurement Stewart Heaney Divisional Director Construction and Advisory

3 Investment in Infrastructure Construction industry annual turnover 2.67bn Approximately 50% of investment is Public Sector Construction procurement accounts for significant part of Executive s budget Importance of delivering best value for money projects

4 Policy Framework for Construction Procurement Northern Ireland Guide to Expenditure Appraisal and Evaluation Procurement through a Centre of Procurement Expertise (CoPE) Gateway Review Process Achieving Excellence in Construction Sustainable Procurement in Construction Policy on Architecture and the Built Environment Procurement Guidance Note 06/10 Procurement of Construction Works and Services

5 Achieving Excellence in Construction Achieving Excellence in Construction initiative was launched to address shortcomings in client performance Sets out a route map for improvement of the construction client through better - Management - Measurement - Standardisation - Integration

6 Achieving Excellence Procurement lifecycle

7 Project Organisation Identify project objectives and agree performance measures Early involvement from CPD/CoPE Identification of stakeholders Fit for purpose governance framework clearly defined routes to escalate issues to senior management Key roles and responsibilities Individuals with available time, skills and track record Access to external sources of expertise where necessary

8 Roles & Responsibilities Independent Client Advisor Investment Decision Maker Senior Responsible Owner Project Sponsor Project Manager Project Board User Group Integrated Supply Team

9 Project Organisation Project Programme Risk Management Strategy Integration of Government policy and initiatives Economic Appraisal and budget SRO approval of project brief and execution plan Assurance measures Gateway Review or for low risk projects a Quality/Cost/Time [QCT] Review

10 Procurement Strategy SRO approval to move to the next stage Appoint Project Manager & Professional Advisors Design and construction should not be considered in isolation - an integrated approach ensures early involvement of all team members Client Team SRO, Project sponsor PM Supply Team Consultants Contractors Specialist subcontractors

11 Outline Design SRO must address all Gateway Review / QCT issues Regular Project Manager reports Risk Register Change control during design development Review project requirements against business needs Value management Full Business Case

12 Design Quality Good design takes account of functionality, appropriate build quality and impact Good design will provide whole life value for money It is at the design stage that most can be done to optimise the value of a facility to its users and the public Policy on Architecture and the Built Environment

13 Health and Safety BUILDSAFE NI Government Construction Client Action Plan 2011 Make health and safety a business priority when commissioning construction projects Select supply teams with demonstrable commitment to health and safety Comply with Buildsafe-NI initiative Set requirements for healthy, safe working conditions and facilities on construction sites

14 Sustainability Public sector procurement provides an opportunity to deliver wider sustainability requirements Sustainability objectives can be incorporated into contracts Sustainability Social Economic Environment

15 Procurement Process - industry engagement Government Construction Clients Trade Unions Construction Industry Group

16 Procurement Process - Visibility of Opportunities Delivery Tracking System Project description, estimated timescales and contact details Sign up for automated updates Zoom and pan capability from region-wide to street level detail.

17 Procurement process effective and efficient selection Standard PQQ for Works Contracts - Financial information only required if contractor is not registered with Constructionline proportionate levels - Information on health and safety only required if the contractor has not been assessed as satisfactory within the last 12 months - Each CoPE will accept the health and safety assessment completed by any other CoPE - Encourage smaller firms to come together to bid for larger projects as a consortium

18 Procurement process- tender stage Effective and efficient tender process Short-list a minimum number of firms Design projects typically to RIBA stage D to reduce tender design costs Best value for money Contracts to be awarded to Most Economically Advantageous Tender (MEAT) not Lowest price Contractors must deliver on the quality submission and sustainability requirements - unemployed, apprentices, etc

19 Procurement process standard form of contract Modern family of standard contracts Embraces the concept of partnership Encourages employers, designers, contractors and project managers to work together through both a powerful management tool and a legal framework NEC3 complies fully with the AE principles

20 Procurement Process - supply chain practice Fair payment - Code of Practice for Government Construction Clients and their Supply Chains and a Fair Payment Charter to be signed by the client, contractor and subcontractors feedback on monthly payment progress - Contractor reports to PM on payments made at each meeting - Contractor to provide PM with contact details for supply chain - PM carries out periodic checks with subcontractors on the payment performance of the contractor

21 Post Award Contract Management Good preparation The right contract Proactive project management Relationship management Continuous improvement People, skills and continuity Change management

22 Capital funded - PRONI HQ

23 Grant funded - Giant s Causeway Visitor Centre

24 Maintenance contracts

25 Critical success factors Early involvement of CPD or Centre of Procurement Expertise Client commitment to best value for money, including health and safety, sustainability and design quality Visible support of senior management Adequate resources allocated to deliver the project Commitment throughout the integrated project team to clearly defined objectives Robust project and contract management supported by clear and short reporting lines

26 Intelligent Procurement Lessons and pitfalls

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