Construction frameworks are designed to deliver a range of benefits for construction firms, developers and clients, including reduced transactional costs and continuous improvements within long-term relationships. In order to enjoy these benefits, however, frameworks need to be clear, concise and standardised, which isn’t always the case.
A new report has found that many UK construction frameworks are confusing, expensive and waste time. An independent review of public sector construction frameworks has found that existing frameworks are not optimised, wasting both time and money, which can have a knock-on negative effect for all involved in a construction project.
The review, led by Professor David Mosey of King’s College London’s Centre of Construction Law, is hoping to tackle these issues with the development of a new ‘Gold Standard’, which will reduce wasted time and money. It looked at public sector construction frameworks with a combined value of £180 billion and considered more than 120 written submissions and 50 interviews.
This new standard will lead to frameworks that are better run and more efficient, while also helping to tackle waste and drive innovation for faster, greener and safer outcomes.
It is hoped that the new standard will help to improve consistency across major government projects. It should also help to support the supply chain as a whole, ensuring that small businesses have a better chance of securing government business and that major schemes don’t fall behind schedule.
A total of 24 recommendations have been suggested by the review, which will need to be met by the public sector and developers. As well as driving improved efficiency in terms of time and money, these recommendations will help with innovation and better safety standards. It is also intended that they help projects focus on social value and net-zero carbon targets.
The review is the result of the Construction Playbook launched by the Cabinet Office in 2020. This playbook was launched with the aim of making sure the public sector and the UK construction industry work better together when delivering key infrastructure jobs.
This gold standard will need to be met by all future frameworks, however, it also includes recommended actions to improve value under existing frameworks.
Cabinet Office Minister, Lord Agnew said: ‘The new Gold Standard will make sure that vital public sector developments have rigorous measures in place to make sure public money is spent well and that projects are delivered successfully.
‘This will be welcomed across the public sector, the construction industry and by the public, who have a right to expect the best possible public sector projects.’
The 24 recommendations are:
- Use the Gold Standard features of the frameworks, framework contracts and action plans to measure Construction Playbook implementation on a ‘comply or explain’ basis
- Ensure that all Gold Standard features are adopted by clients and suppliers when comparing different construction frameworks.
- Require that all public sector construction frameworks prioritise safety, net-zero carbon and Compact with Industry.
- Reduce procurement costs, improve value and reduce risks by wider adoption of a standard form Gold Standard framework alliance contract.
- Create contractually binding Gold Standard action plans to convert framework objectives into actions and timetables that deliver improved economic, social and environmental outcomes.
- Invest in framework management that demonstrates value for money for clients and suppliers.
- Capture improved value by identifying SME strengths and use Supply Chain Collaboration systems to maximise social value.
- Avoid wasted procurement costs and improve supplier commitments by ensuring that frameworks offer sustainable pipelines of work.
- Use pre-procurement framework consultation to explore emerging technologies and innovations and to identify opportunities in the market.
- Reduce procurement costs and improve value through the award of longer-term call-off contracts and the incentive of additional work.
- Improve supplier investments in MMC and other offsite technologies by awarding framework call-off contracts for portfolios of work.
- Create a whole life golden thread of asset information using BIM and other digital technologies integrated under a framework alliance contract.
- Improve economic, social and environmental outcomes through framework early supply chain involvement (ESI), using Supply Chain Collaboration systems in all framework contracts.
- Incentivise innovative solutions by creating specifications for frameworks and call-offs that focus on required client outcomes.
- Use delivery model assessments to inform and support framework strategies, procurement, contracting, management and call-off.
- Assess and control the costs of framework deliverables through the use of evidence-based benchmarks and whole life Should Cost Models.
- Integrate the mutual commitments of framework providers, clients, managers and suppliers through the terms of a Gold Standard framework alliance contract.
- Allocate risks based on framework marketing engagement and use joint framework systems for early risk mitigation and efficient responses to risk events.
- Create transparent pricing mechanisms for frameworks and call-offs that maximise cost certainty and ensure prompt payment.
- Reduce procurement costs by consistent and proportionate assessment of economic and financial standing using ‘PAS91’ or the ‘Common Assessment Standard’.
- Evaluate proposals for frameworks and call-offs [roportionately and consistently using balanced criteria that include quality, social value and net-zero GHG emissions.
- Establish shared and transparent framework systems through which to manage and mitigate the risks of a supplier’s financial distress.
- Improve framework outcomes by creating collaborative systems for the management of framework relationships and strategic supply chain relationships.
- Support the adoption of Gold Standard frameworks, framework contracts and action plans through government-led training and guidance.