A VALUE BASED APPROACH TO SELECTION Professor John R Kelly

design/build – Lee Evey the old days are gone forever the USA can put together the best diverse innovative teams in the world provided that the team contains a Scot. the fundamental difference and advantage of design/build is in the integration of the entire team

application of VM - The Lever of Value Project Strategy Project Functionality Design Const Project Operations VALUE Project Objectives Program

Prog/Design Build Use Falling influence over the total whole life value of a project through design, construction and in use phases bid

accountability & audit FAR permits wide scope in evaluating bids but: the methodology for the evaluation procedure MUST be clear and made explicit in the bid documents.

classification of quality - kano “delighter” “basic” “performance” absent fulfilled Presence of Characteristics delight neutral dissatisfaction Degree of customer satisfaction Impact of time

judgement factors - company Basic - health & safety, corruption, turnover, experience of type of work, bonding, etc. Measurable performance – O/H & profit, number of partnering projects, examples of value engineering successfully implemented

judgement factors - project Basic – largely relate to company. Objective measurable performance – CAPEX, OPEX, time, number of ft 2 provided, environmental criteria, earning potential, etc Subjective measurable performance – aesthetic, comfort, community/political benefit, etc. Risk – should be an overlay on basic & objective measurable factors.

the key question how far through the process do you have to go before making an appointment?  full design & spec  outline design & spec  performance specification of project  performance specification of company/consortia

case study Withington Community Hospital previously pursued through design-bid-build £26m initial cost plan (£6m over budget) DB Contractor appointed on performance specification of company & interview Similar to Construction Management At Risk but including design

VM1 – strategic brief issues  budget  sharing facilities  whole life costs value equation  flexible design  community & whole life cost

value equation H. Politics / Local Community / Service Outcomes A. Capital Cost - CAPEX B. Operating Cost - OPEX C. Time D. Environment E. Esteem F. Flexibility Total F C F CD FF A B B BA F A C HBHH F FH GGGGB H A 3 BCDEF G. Comfort G 45 H

strategic task FAST diagram Improve Community Health  Meet NHS Plan  Create Local Community Plan  Treat People (DTC)  Create Primary Care Resource Focus for Community Attract Staff Enhance Local Health Service

VM1 conclusion Analyse volume of activity clinical and non support facilities (case load) and ensure most up to date activity assumptions Discover / analyse comparators for benchmarking Outline planning application Options to board – business case  include phase 1 with a phase 2

VM2 – project brief/ architectural programme patient pathways functional space analysis functional adjacency analysis performance specification of space ideas to maximise space usage

VM3 – concept design spatial layouts audited against brief ideas for improvement Output final sketch design guaranteed maximum price confirmed

The Result Withington community hospital started life £6m over budget. It was built £½m less than budget using VM with an integrated team.

A VALUE BASED APPROACH TO SELECTION Professor John R Kelly