Sub-contracting Outputs Matt Galvin and Tim Rudin Transport for London

...many construction examples demonstrate the energy performance of final buildings being well below that anticipated by the design... Solution? Monitor ‘in-use performance’ to accurately identify the energy performance of a building How? Post Occupancy Evaluation... Post Occupancy Evaluation

What is POE? Definition: POE is a structured review of the functional, operational and strategic performance of the building during occupation, which includes the regular collection and review of several aspects to identify key occupier and/or building performance issues... Occupier satisfaction - Space utilisation - Resource consumption Inclusion of POE in construction contracts can: – provide an additional performance incentive for the contractor, – reward outcomes which exceed initial expectations – penalise under-performance.

Costs

Post Occupancy Evaluation Report South East Centre of Built Environment/Constructing Excellence, April-June 2012 An insight into current POE-related policies and practices by European public authorities to drive sustainable construction and innovation What is POE / current policies and best practices Key barriers to greater implementation Conclusions & recommendations

NHS Scotland : Systematic use of POE Mandated approach led to large costs savings & better health recovery rates. Integrated, systematic and collaborative approach with <1% of a project’s capital sum invested into POE. User needs & business outcomes are fully integrated from the investment bid, through construction and into operation. Project funding is not provided without evidence of user involvement. Each stage requires a summary report. A project review is completed within 1-3 months after handover and the lessons learnt are compiled and shared with others within the network. Best practice examples in Finland and Stockholm County

Challenges to POE implementation Most public authorities accept that POE is critical, however usage is limited Property is often low priority for an organization, yet facilities have a huge impact on productivity and costs are sometimes second only to the workforce. 2. Disconnect between those that procure, operate and use a building – so encourages localized cost-cutting despite consequence on others. (Budget separation issue). 3. No mandate or requirement from a senior person or organization – so it is treated an ‘optional extra’ rather than ‘critical input’. 4. Time pressure on staff time and project programmes – no time to ‘plan’, just ‘do’ 5. Disconnect between similar projects and organizations – preventing comparisons & shared learning 6. Fear of being associated with a poor performing project – it is better not to ask than have to deny/distance themselves.

Recommendation 6.e Recommendation 6.e: Incorporate a post-occupancy evaluation into construction contracts, together with a clear indication of sanctions for non-compliance with designed performance PA’s requiring and using POE report significant benefits £reduced in-use energy consumption & associated costs (& carbon emissions) £reduced construction and maintenance costs £improved occupier productivity

Next Steps Case Studies x 3 by end of Dec Further identification on the best ways to integrate a POE obligation into construction and facility management contracts...

Monetisation of Carbon in WLC in Construction Measurement of carbon within building projects Extent of the monetisation of carbon into Whole Life Costing (WLC) appraisals James Fiske, Mott McDonald Uses UK case studies in order to provide examples and best practice guidance from construction and other sectors Recommendations for those who need or want to include carbon within project appraisals.

Monetisation of Carbon in WLC in Construction Operational carbon monetised.... embodied carbon not yet Only at request of a client who is subjected to the associated taxes or charges (such as the UK’s CRC Energy Efficiency Scheme) or in regulated industry such as Water Utilities Sector in UK. If appraised at all, embodied carbon is generally reported as a weight and considered separately to cost in any project appraisals. Recommendations based on the consideration of carbon during the design stage of a proposed development and/or applicable to other stages of a construction project including in use, refurbishment and replacement activities.

Performance-based procurement in the construction sector: feasibility study Academic study being developed by School of Construction Management and Engineering, University of Reading, led by Will Hughes, Professor of Construction Management and Economics Considers the feasibility of performance-based contracting for local authorities in terms of: Finance Governance – EU procurement regulations Contractual approach Organizational culture and strategy

Performance-based procurement in the construction sector: feasibility study Utilising new and existing research to look at possible procurement models and financing options Interviewing suppliers and reviewing examples from the public and private sectors: Greater Manchester traffic lights Rolls Royce “Power by the Hour” SBS Utilities in Queensland, Australia Alsatian High Schools Recommendations and guidance

Case Studies Design for sustainable school construction in Bristol 2012 Olympic Park Development - Sustainable Procurement Two further case studies are being finalised:

Dissemination Events: Sept - EcoProcura 2012, Malmo 10 Oct – Strategic Supply Chain Group, London Nov – Action Programme on Responsible Sourcing (APRES) Conference, Loughborough 30 Nov – Constructing Excellence National UK Awards Event, London (tbc) Publications: UK and EU Construction Trade Press Procurement Press: Supply Management, etc Sustainability newsletters/publications e.g. Defra’s SD Scene