BETTER VALUE FOR MONEY IN PUBLIC SECTOR CONSTRUCTION CONTRACTS

The first three of a series of draft guidance documents to Government Departments preparing public sector construction projects have been forwarded to the Construction Industry Board (CIB) to take the views of their members, the Treasury announced today.

The consultation exercise between the Treasury and the construction industry is a significant step forward in public sector contracting with the construction industry.

It will lead to better value for money for the taxpayer as public sector building contracts become better and more consistently prepared and presented within a commonly used and understood framework.

Publication of the draft guidance marks clear progress by the Treasury in developing a practical dialogue between construction contractors and Government clients.

CIB Chief Executive Don Ward said :

"In the past, the construction industry has not had the opportunity to help Government get this sort of guidance right. The culture change evident in asking CIB members for their views is very welcome. I strongly commend the Treasury for it, and look forward to industry representatives making a positive input.

"I am also pleased to see that the Treasury draft guidance adopts the principles on which CIB's own guidance is based. It is important that construction clients in both the public and private sector should be taking these Codes as their starting point to improve construction performance ".

The guidance covers :

roles, responsibilities, qualifications and training of key client project team members.
a value for money (VFM) framework to identify key activities for achieving VFM .
a new "approval gateway" concept to prevent projects proceeding without specific management structures and key activities for achieving VFM.
the appointment of consultants and contractors on the basis of quality and price.

The Government Construction Client Panel (GCCP) will endorse final drafts of the documents after receiving views from the construction industry. Further draft guidance will be issued for consultation in 1998.

NOTE TO EDITORS

1. The 1995 Cabinet Office Efficiency Unit Scrutiny "Construction Procurement by Government" (ISBN 0114301417) examined ways of improving the efficiency of Government construction procurement and making Departments best practice clients.

2. The draft guidance was prepared by HM Treasury's Procurement Practice and Development Team (formerly Central Unit on Procurement) and representatives from other Government Departments following the Scrutiny recommendation to strengthen guidance on aspects and requirements of those tasks.

3. The three draft guidance papers announced today are :

"Essential Requirements for Construction Procurement"

This guidance defines the roles and responsibilities of the three key members of the client's project team and sets out the abilities and training required. The training syllabus includes topics on best practice covered by many of the codes of Practice published recently by CIB as well as the integration of value and risk management within normal project management.

"Value for Money in Construction Procurement"

This guidance describes a value for money (VFM) framework, consisting of a generic process flowchart for a project identifying key activities for achieving VFM. The framework introduces the concept of "Approval Gateways", beyond which projects should not proceed without specific management structures and key activities essential for achieving VFM being implemented.

"Appointment of Consultants and Contractors"

This guidance recommends the appointment of consultants and contractors on the basis of quality and price. It adopts and builds on the work of the CIB Codes of Practice for Government Departments.

4. Further guidance to be issued during 1998 will deal with other key aspects of the client's role in construction procurement, including:

financial aspects;
project evaluation and feedback;
team working, partnering and incentives; and
whole life project costs.

5. The Scrutiny also recommended a forum to coordinate Departmental interests in construction procurement. That role is fulfilled by the GCCP, which draws members from 30 Government Departments and agencies, including main construction clients, eg MOD, Highways Agency, National Health Estates and Property Advisers to the Civil Estate (PACE).

6. Through membership of the Construction Clients' Forum, the GCCP takes a leading role on behalf of the public sector in promoting a concerted client approach to improving the performance of the industry.

7. For copies of the draft guidance and further information for industry, contact: Mike Burt, Head of Treasury Procurement Practice and Development on 0207 270 1630.

8. Media enquiries and requests copies of the guidance should be addressed to Charles Keseru in HMT Press Office on 0207 270 5188.

Press Notices 1997 July to December index