Rob Garvey's Government Construction Strategy Presentation
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The UK Government Construction Strategy (May2011) set out “a detailed programme of measures Government will take that will reduce construction costs by up to 20% by the end of this parliament”. Rob Garvey reviewed whether this objective has been achieved and the impact of strategy for the next Parliament.
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- 1. @Rob_Garvey #lcecGTP Rob Garvey University of Westminster 12th May 2015
- 2. @Rob_Garvey #lcecGTP Work 1st 20yrs Academic work . Interests Government Construction Strategy 2May 2015 Education BSC (Hons) Quantity surveying MSc Construction Economics & Management Professional Doctorate
- 3. @Rob_Garvey #lcecGTP Work 1st 20yrs Academic work . Interests Government Construction Strategy 3May 2015 Education BSC (Hons) Quantity surveying MSc Construction Economics & Management Professional Doctorate
- 4. @Rob_Garvey #lcecGTP Objectives Context Progress So What … … next? Government Construction StrategyMay 2015 4
- 11. @Rob_Garvey #lcecGTP Objectives Context Progress So What … … next? Government Construction StrategyMay 2015 11
- 15. @Rob_Garvey #lcecGTP Government Construction StrategyMay 2015 15 72 447 840 476 2400 3500 0 500 1000 1500 2000 2500 3000 3500 4000 2011/12 2012/13 2013/14 2014/15 Savings / Expenditure Saving Expenditure 15.6% 13.1% 19.6% ?
- 16. @Rob_Garvey #lcecGTP Government Construction StrategyMay 2015 16 Department Actual Cost reduction 13/14 BIS £58m 10% DCLG £42m 13.3% DEFRA £20m 14.2% DfE £127m 31.4% DfT / HA-MP £379m 27.7% DfT / NDD £119m 15% DoH £60m 12.9% MoD £8m 9.3% MoJ £25m 18.4%
- 17. @Rob_Garvey #lcecGTP 1720 100 40 0 200 400 600 800 1000 1200 1400 1600 1800 2000 Total Government spend Total Construction Output Public Sector Construction output Expenditure Expenditure Government Construction StrategyMay 2015 17
- 18. @Rob_Garvey #lcecGTP Government Construction StrategyMay 2015 18http://www.clipartpanda.com/categories/pipeline-20clipart
- 20. @Rob_Garvey #lcecGTP Objectives Context Progress So What … … next? Government Construction StrategyMay 2015 20
- 21. @Rob_Garvey #lcecGTP 21 'Never Waste A Good Crisis‘- A Challenge To The UK Construction Industry, Constructing Excellence (2009) (available at www.constructingexcellence.org.uk) May 2015 Government Construction Strategy
- 22. @Rob_Garvey #lcecGTP 22May 2015 Government Construction Strategy
- 24. @Rob_Garvey #lcecGTP Government Construction StrategyMay 2015 24 May’11 Oct’10 Dec’10 March’13 July’13
- 25. @Rob_Garvey #lcecGTP Objectives Context Progress So What … … next? Government Construction StrategyMay 2015 25
- 27. @Rob_Garvey #lcecGTP Government Construction StrategyMay 2015 27 https://www.gov.uk/government/organisations/cabinet- office/series/government-construction
- 30. @Rob_Garvey #lcecGTP Intelligent client Procurement routes Effectiveness of Frameworks Cross Government collaboration in procurement Government Construction StrategyMay 2015 30 Intelligent client Procurement models Effectiveness of Frameworks Cross Government collaboration in procurement
- 31. @Rob_Garvey #lcecGTP Cost-led Two-stage open book Integrated project insurance Government Construction StrategyMay 2015 31
- 33. @Rob_Garvey #lcecGTP Cost targets and savings Reduced supply chain costs Improved client brief Simpler pricing Greater visibility of workload Procurement Lower bid costs Due to simpler procurement process Commercial Government Construction StrategyMay 2015 33 14% 16.5%
- 34. @Rob_Garvey #lcecGTP Early engagement of supply chain Standardised specifications Improved briefing process Supply chain innovation Improved quality control Extended warranties Improved repairs and maintenance Government Construction StrategyMay 2015 34
- 35. @Rob_Garvey #lcecGTP Government Construction StrategyMay 2015 35 "planned and confirmed turnover, cash flow certainty, direct communication between all parties from client to resident" (Sovereign) "The use of local resources and labour from the areas we are working in helps break the barriers sometimes felt between local residents and the client or constructor" (Dendale). Increased confidence in relationship between client and supply chain enabling higher levels of productivity and performance "Everyone is more than happy to help each other out to get the works complete at the same time, keeping the tenants informed and happy" (Masher Bros) "The speed of which a contract can go from AMP inspection to starting on site and completion is far quicker than normal procurement practices" (Gunite)The supply chain said…
- 36. @Rob_Garvey #lcecGTP Intelligent client Hard work All focused on delivery Engaged supply chain Early contractor involvement Confidence = reduced risk Significant benefits Cultural Change Government Construction StrategyMay 2015 36
- 38. @Rob_Garvey #lcecGTP Intelligent client Procurement routes Effectiveness of Frameworks Cross Government collaboration in procurement Government Construction StrategyMay 2015 38
- 39. @Rob_Garvey #lcecGTP Objectives Context Progress So What … … next? Government Construction StrategyMay 2015 39
- 49. @Rob_Garvey #lcecGTP Government Construction StrategyMay 2015 49 623Mt
- 55. @Rob_Garvey #lcecGTP Objectives Context Progress So What … … next? Government Construction StrategyMay 2015 55
- 57. @Rob_Garvey #lcecGTP Government Construction StrategyMay 2015 57 @Rob_Garvey uk.linkedin.com/in/garveyrob r.garvey@westminster.ac.uk
Editor's Notes
- 13 themes … mention Co-ordination and Leadership Client skills New procurement models BIM
- There have been a plethora of industry wide reports, numerous government sponsored and others by organisations such as Building Property Federation. Fundamentally the reports have highlighted similar problem areas namely poor performance associated with building projects resulting in time delays, cost overruns, poor quality and poor H&S. For more detail on all these reports up until Rethinking Construction, Sir John Egan’s report in 1994 look at David Langford and Mike Murray’s book
- Leadership … central focus across all government departments
- Key points … despite Construction Matters desire to have a focal point for construction … it could be argued this has not be
- Not a project, but a programme Year March’13 to April’14 Interim and final case studies
- Improved client / resident satisfaction Improved predictability of time & cost Improved quality Improved sustainability Improved leaseholder relations The cost savings have been achieved through two principle cost reductions through firstly procurement and then through process improvement using the SCMG Starting on the right … The procurement savings were achieved by lower bid costs. The SCMG has enabled both clients to simplify their procurement process and lower not only their own bid costs, but also those of the tenderers. Secondly, there was a commercial advantage gained through the procurement process. These are attractive contracts worth approximately £75m pa. But that bidders already had a good appreciation of the SCMG and were keen to work on it. Secondly the SCMG processes enabled the supply chain costs to al be reduced. With a clearer understanding of what the client requires, better scopes and specifications have been generated and standardised, reducing the time to start works as well as giving confidence to the project teams on what is expected of them. Greater standardisation of spec’s and scopes have enabled a simpler method of price determination which again reduces the time involved in agreeing both the anticipated costs as well as the final costs. There are minimal variations – I touch on this again in a minute. But another key cost reduction has been the transparency of workload, which takes out risk for the supply chain as they can have greater confidence in deploying dedicated resources to the projects So what have we reported … well we have audited savings of approximately 31%; with savings in procurement at 16.5% and process improvement savings at 14%
- So I’ve touch on some of these already but if I focus on a couple Firstly, supply chain innovation … the tier 2 suppliers have a voice and have greater confidence in the process that they are prepared to engage and consider alternative solutions. Whatever the innovations, introducing new materials such as upgrading windows at no extra cost it is the process that encourages suppliers to contribute Another example of this is the extended warranties. Actually whilst they may have extended the warranties, the real benefit has been in effective management of the warranties. Both clients now have a much improved process that if damage occurs to a property, before a repairs and maintenance gang attend the warranties are checked. So if a window is damaged, the original supplier, who is more than happy to fulfil the warranty obligation is given the opportunity to attend the repair. This means the authority has saved money in not occurring the cost in the repairs and maintenance division, but also benefitted from activating the warranty. Moreover the supplier can understand and record what the problem is and potentially improve their own products Another example is the roofs – this fits in quality control as well. But dialogue with the roofing companies led to the introduction of an inspection after one year – because if a roof is going to fail, statistics say it will be within the first year of two. Any issues can be immediately attended to. We can see that there is now a benefit of not incurring additional costs of repairs to properties down the line, but these can’t be accounted for!
- I’ll leave you to read the quotes from the supply chain, but I’m really just reinforcing what I’ve already said Integrated working has resulted in increased confidence in the relationship between the clients and the supply chain which has led to improved productivity and performance It really is a feel good story and one that I feel should be shouted from the rooftops. Collaboration and integrated working achieves so much more than just cost savings …
- Why will other clients adopt these new methods … what are the challenges going forward? Relate to Industrial Strategy?
- s National Change Agent Davis Langdon will oversee the £35m Efficency Challenge Fund, which will be used to establish procurement consortia. It will be assisted by solicitor Trowers and Hamlins. Housing minister Keith Hill said: “Collective procurement can deliver big benefits for social landlords and their tenants. As well as reducing costs, it can improve quality by developing long term relationships with suppliers.” This appointment comes as part of the ODPM’s response to the Gershon review that said money saved on procurement could be used to build more social housing. The 2003 Spending Review said that collective purchasing arrangements that focused on the whole supply chain and managed demand had significant potential to reduce costs and improve quality.
- Just to quickly summarise, we’ve looked at the GCS and it’s evident that the objective of cost reduction is being achieved, however it’s not clear whether this is just short term cost reduction that also supports whole life value? It’s been recognised that a key driver has to be not only focus on cost, but also carbon reduction … we can’t wait! I suppose my final point is that the GCS is a good example of the leadership the strategy itself has called for. The challenge is whether the future leaders will continue and achieve the potential legacy the GCS was aspiring to achieve. IN that vain it will be interesting to see who will be the next Chief Construction Advisor. The other aspect of the strategy was to influence us to do things different. … the implications of my poll indicate you are all prepared to do something, but the challenge is to influence that early majority. To that end, what is apparent to me, the emphasis on being better informed clients on the demand side will help, but on the supply side of the industry we have the capability to solve our problems and to do things differently, it’s up to us to align our capabilities to deliver the appropriate solutions.