HM Treasury News Release
114/97                                       26 September 1997
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            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The first three of a series of draft guidance documents to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Publication of the draft guidance marks clear progress by the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     " I am also pleased to see that the Treasury draft guidance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 Further draft guidance will be issued for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 0171 270 1630.

8.   Media enquiries and requests copies of the guidance should
     be addressed to Charles Keseru in HMT Press Office on 0171
     270 5188.

9.   If you have access to the Internet you can find this news
     release and copies of other Treasury material at
     http://www.hm-treasury.gov.uk.  Other Treasury material can
     also be found at this site.