177/98
29 October 1998
BUILDING BLOCKS FOR BETTER CONSTRUCTION CONTRACT PERFORMANCE
A three-year action plan to improve Government performance in procuring major construction projects is being developed, Paymaster General Geoffrey Robinson announced today.
Mr Robinson was speaking at the launch of two reports highlighting areas for improvement in the procurement and performance of Government construction contracts. These were prepared by Professor Andrew Graves of the Bath University Agile Construction Initiative for HM Treasury and the Government Construction Client Panel (GCCP).
Mr Robinson said :
"These reports provide the building blocks for a step change in Government performance in dealing with the construction industry.
"The public sector accounts for 40 per cent of construction industry contracts in the UK. As such a significant client, the Government is excellently placed to provide both a lead for other client sectors to improve their performance and the motivation for the industry itself to change. The industry tells us regularly that change will only occur when Government is seen to be improving itself. We are committed to doing exactly that.
"We shall build on the findings of these two valuable reports in five ways, through :
- an action plan to implement the Client Improvement Study recommendations within three years developing better performance measurement and benchmarking, taking account of time, cost and quality criteria applied in the pilot study improved training and skill development for project sponsors, building on a successful scheme developed with the Civil Service College and Reading College of Estate Management
- six further guidance documents on key aspects of client performance, in addition to three already issued
- working with all Government Departments and the National Audit Office to develop a strategy to deliver and monitor improvements identified in the Client Improvement Study.
"These reports are entirely complementary to the findings and recommendations of Sir John Egan's Task Force and ensure that improving Government client performance will be implemented within the framework of Sir John's work.
"Our actions in response to the reports show our commitment to better client performance. As a construction industry client, the Government has the profile, critical mass and size of business to lead change. That is what we are determined to do."
The first of Professor Graves' reports, "The Government Client Improvement Study", compares Government client and supply side performance against UK and, for the first time, international best practice. It provides directions for Government client improvement in four areas :project management; measurement; standardisation; and integration.
The report highlights a number of areas for improvement:
- empowerment of the project sponsor role
-
flexible use of rules and regulations
- need for greater integration in the procurement process
- early involvement of all parties in the planning and design of projects; and
- use wherever possible of standard processes, components and integrated information technology systems.
The action plan set out today will seek to implement the recommendations of the report in all these areas.
The second report, the "Pilot Benchmarking Study", examines some 60 projects completed in the last five years, with a combined value in excess of £500 million. It shows, for the first time on Government construction projects, that high level data can be used to demonstrate relationships between project characteristics and project success. This will enable Government to identify and focus on factors which will provide the best basis for the successful delivery of construction projects.
NOTES TO EDITORS
1. The GCCP was set up in March 1997 to coordinate the work of individual departments as clients in construction procurement, and to provide a single voice on cross-departmental strategic client issues. Its formation was a direct response to an Efficiency Scrutiny in 1995 which examined Government's role in construction procurement.
2. GCCP membership is drawn from around 50 departments with an involvement in construction. These range from sponsors of large scale projects, such as MOD, the Highways Agency and NHS Estates, to more focussed interests such as Property Advisers to the Civil Estate (PACE). DETR is also a member given its role as sponsor for the construction industry. A number of action groups report to GCCP, dealing with particular issues and tools, such as bench-marking, value and risk management, partnering and PFI. Key Panel members meet regularly with representatives of the industry client and supply side umbrella bodies.
3. HM Treasury Procurement Group has published three guidance documents on best practice construction procurement, available from the Public Enquiry Unit on 0207 270 4558.
'Essential Requirements for Construction Procurement' sets out the roles and responsibilities of the Investment Decision Maker, the Project Owner and the Project Sponsor and the training they require.
'Value For Money in Construction Procurement' sets out a VFM framework (a structured list of activities undertaken in a project including approval gateways), risk and value management techniques and control procedures.
'Appointment of Consultants and Contractors' sets out consultancy roles and responsibilities, details of the appointment process and the structure of the project team.
4. The Agile Construction Initiative at the University of Bath was launched in May 1997 in collaboration with Balfour Beatty Civil Engineering Limited. Funded by the Engineering and Physical Services Research Council (EPSRC) and Balfour Beatty, the purpose of the three year initiative is to develop benchmarks in the construction industry in order to improve the performance of the whole construction industry. The team is led by Professor Andrew Graves.
5. The reports "The Government Client Improvement Study" and the "Pilot Benchmarking Study" are available through the Treasury Public Enquiry Unit on 0207 270 4558, priced £10.00 and £15.00 respectively.
6. Requests for media copies and media enquiries should be addressed to the Treasury press office on 0207 270 5188.