HM Treasury News Release
177/98 29 October 1998
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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 0171 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 0171 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 0171 270 5188.
7. This press release, together with other Treasury
information, is also available on the Treasury website at
http://www.hm-treasury.gov.uk.
# = pounds sterling