Transforming local government construction The power of framework agreements Contents Report complied by Bob King Consultant for East Midlands Centre of Devon County Council/Scape, built under the Devon framework Excellence and Local Government Task Force by Costain page Foreword 3 ONE Introduction 5 TWO Executive summary 7 THREE Background 9 FOUR Framework 11 FIVE Ingredients of successful frameworking 13 SIX Benefits and efficiencies 23 SEVEN Advice and lessons learned 25 EIGHT Small and medium enterprises (SMEs) 27 NINE Small authorities 29 TEN The contractors’ perspective 31 ELEVEN Collaborative opportunities in highways 33 TWELVE Future directions in frameworking 35 THIRTEEN Widening the reach 37 FOURTEEN Framework profiles 39 FIFTEEN References 77 SIXTEEN Notes 79 Transforming nment local gover construction Foreword Roger Latham Few would doubt that local government has I am delighted to endorse this report as it 3 made significant advances in procuring and marks the first in a number of reports that will delivering construction projects in recent examine how local government can implement years. The principles set out in Sir John Egan’s the most effective construction regime. By landmark report, Rethinking Construction, have examining good practice and highlighting been successfully employed in innumerable common principles, it brings together our projects throughout the country. Equally, I am collective learning. sure that local government can do more to comprehensively adopt and embed the Egan The mission of the Local Government Task principles in its construction services. Force is to encourage and assist local authorities adopt the principles of Rethinking As this report skilfully highlights, many local Construction and I hope that this report acts authorities have adopted the framework as a further catalyst and inspires practioners to approach where not just cost but factors such rise to the challenge. as quality, performance and partnering, the very principles that Egan has sought to embed, I would like to pay my special thanks to Bob characterise their approach to construction. King for this excellent work in preparing this report and to all those who contributed to its With increasing pressure on the public purse, production. framework agreements allow local government to share resources and to collaborate across Roger Latham boundaries so that it becomes more efficient at Chair of the Local Government what it does. Importantly, they enable smaller Task Force Board authorities to access the benefits which such agreements can offer that hitherto have been out of their reach. So, good construction is also efficient construction. Transforming nment local gover construction Tim Byles Bob King Local government can be pleased with its track BOB KING 4 record so far on delivering its efficiency targets but with heightened public and political Bob trained as an architect. He has wide expectations, the efficiency agenda has experience in the public sector in the UK and become more relevant than ever. Local Canada where he worked in the 1980s as government must continue to explore project manager on a range of major projects innovative ways of generating efficiency gains for the Government of Alberta. right across its business. In 1986 he was appointed City Architect for The pace must quicken, the sphere of Manchester, a post which he held until 2003. influence widen and local government must Between 1989 and 1992 he was also Director think more radically, particularly in the area of of Housing. collaboration. I believe that collaboration is not optional, particularly in the areas of major As City Architect he was responsible for spend. Building Control and in that capacity coordinated the recovery operation in the With some £14 billion of capital alone spent by centre of Manchester after the IRA bomb of English local authorities on construction, I am 15th June 1996. convinced that frameworks and the adoption of the principles behind them provide a key In 1999 he became Director of Special opportunity for considerable efficiency gains Projects, the Council's in-house construction that we cannot afford to miss. project management office through which the City's major construction projects were Tim Byles procured. These included most significantly Past Chair of the Local Government the City of Manchester Stadium, the Task Force Board centrepiece of the 2002 Commonwealth Games held in Manchester. Bob has been a board member of the Local Government Task Force since its creation in 1999, and continues to contribute to efficiency initiatives relating to construction in the public sector. ONE 1 introduction Introduction This project was commissioned by the East They will not have started to deliver Midlands Centre of Excellence which is construction schemes on the ground before 5 managing the national lead on the this report is completed. Those involving Construction strand of the Gershon Efficiency collaboration between authorities show the review. That initiative set a short term target direction that frameworking is taking in the to secure some £6.45bn of efficiency savings future. across the local government sector by 2007/08, and an obligation to plan for longer Frameworking is progressive and incremental. term efficiencies extending further into the Each level of accomplishment provides a new future. base from which to plan new advances. Each advance enlarges the range of benefits which The object is to showcase current examples of can be reached. Those actively involved in successful local authority construction framework management and development frameworks covering housing, general building would all say that they have embarked on a and highways. In highlighting key journey, but none would claim to have reached characteristics and the efficiencies they are the end, or the limits of their capacity to delivering, it is hoped to encourage and inspire achieve and improve. others to adopt similar principles to assist in meeting their construction efficiency targets. The examples featured have been identified through networks of contacts including the Regional Directors of the Centres of Excellence, and the Local Government Task Force (LGTF) Regional Champions. They are at different stages of development and maturity and this is often reflected in their achievements. The project profiles represent a snapshot of a changing picture at a moment in time. Some are still in the formative stages. Transforming nment local gover construction TWO executive summary 2 Executive summary Franklin Ellis Architects Construction frameworks have developed by Much of the early progress in construction extending the application of the principles of frameworks has been made by larger county 7 partnering advocated by Latham and Egan and metropolitan district councils. The from individual projects to programmes of benefits are however potentially obtainable by work. Continuity allows the construction smaller councils willing to enter into partnership to grow, build on the intelligence collaborative procurement relationships with and experience developed, improve the other authorities, RSLs or central government service and product and achieve a range of agencies managing framework contracts with other efficiencies including financial similar work content in the same geographical economies. locality. Successful frameworks require careful Frameworking is not limited to larger consideration of a number of process issues. contractors. By structuring framework They include clarity of objectives, the packages appropriately, there are formulation of detailed operating arrangements opportunities for SMEs both directly and in conjunction with the contracting partners through the supply chain. and full integration and management of the supply chain. They also require a shared Frameworking liberates contactor capacity, commitment to performance improvement enables contractors to involve more senior through progressive measurement and staff in clients' programmes and to add value benchmarking. in other areas including corporate social responsibility agendas. When a sufficient volume of work is being handled, trust and confidence exist between Future advances in frameworking will see more participants, there is a commitment to developments in inter-authority collaboration, performance improvement and cultures and reducing the demands imposed on smaller organisations adapt to the new type of authorities wishing to engage, whilst bringing working that frameworking requires, significant the benefits within their reach. gains and efficiencies are obtainable. The efficiencies obtainable through These include more productive relationships, construction frameworks can make significant higher levels of client satisfaction, savings in contributions to current efficiency targets. time and reductions in cost. Cashable savings There needs to be a wider debate about how can be worth up to 10% of the overall capital their use can be extended within the cost. local authority sector. Transforming nment local gover construction THREE background 3 Background Rectory Lane, Fowlmere (completed July 2005) part of a wider development. Cambridge Housing Society Thought and practice in construction project projects showed improvements in the control procurement in the last decade has been of time and cost and were characterised by 9 dominated by two seminal reports better relationships. Partnering also saw the 'Constructing the Team' by Sir Michael Latham introduction and adoption