1. Delivering Successful Outcomes
STEVE ROWSELL
ANDY ROACH-BOWLER
Rowsell Wright Limited

2. Contents Current position Background to industry change
What Clients want – Crossrail example
What’s needed to deliver
Collaboration – Project 13 approach
Delivering wider objectives
Looking ahead

3. Current position on project procurement and delivery
Progress has been made
Funding and forward planning still difficult
Inconsistent approach to collaboration
Still too much focus on lowest price
Supply chain profits too low
Larger clients developing new approaches

4. Industry change has been slow
1998
1994
2002

5. Where we were – learn from mistakes
40% average cost overruns, most projects delivered late
Poor buildability, little innovation
Quality defects and poor life cycle performance
Adversarial claims culture, disputes and high legal costs

6. We know how not to achieve successful outcomes
Work packaging not aligned with market structure
Supply chain not engaged until construction
Lump sum contracts which carry high risks for contractors
Complex and misaligned contract incentives
Expensive tender process with design required during tender period
Focus on lowest price tendering
Collaboration by name but not by nature

7. What outcomes do Clients want? More focus required.
Best whole life value
Affordability
Certainty of cost and time
Sustainable solutions
Risk-free innovation
Efficiency / improvement
Higher productivity
Support economic growth
Skills development
Technology solutions
Collaborative culture
No defects
Better health and safety
Sustainable supply chain
Enhanced reputation
No procurement challenges

8. Contract strategy factors – the Client
Clients need to establish:
Scope – build/maintain/operate
Design strategy - how far to develop design
Risk allocation
Affordability criteria and realistic budgets
Prioritise the wider benefits of investment

9. The Crossrail Approach
Packaging based on market engagement
OCI approach
Balanced risk allocation
Robust outturn estimate
Focus on skills development

10. Contract strategy factors – the Market
Market factors:
Supply chain capability and capacity
Access to resources
Willingness to accept risk
Time to prepare and respond
Competing work programmes
Trust in the Client

11. Procurement, commercial and contracting key principles
The Client needs to understand its capabilities
Clear Client objectives / outcomes
Effective market engagement
Careful consideration of contract packaging
Achieving an integrated and incentivised team
A fair balance of risk and reward
Upholding equal treatment, transparency and proportionality

12. Project 13: From Transactions to Enterprises
Evolution of the new approach:
Traditional approach
Simple collaboration
Integrated functions and relationships
High performing enterprise

13. Project 13 The five key features
Governance
Defining value; long-term relationships; performance measurement
Organisation
Coalition of suppliers; aligned commercial interests; effective organisation
Integration
Effective teamwork; Production management; Health, safety and well-being
Capable Owner
Digital Transformation

14. Examples of collaborative contracting
Use of NEC contract for simple collaboration – spirit of mutual trust and cooperation
Early Contractor Involvement – Highways Agency and HS2
Optimised Contractor Involvement – Crossrail
Collaborative frameworks – Highways England
Alliances (NEC4) – HE SMART motorways

15. Supplier selection: Risks of lowest price tendering
Tenderers forced to submit unrealistically low prices to win the contract
Tender does not reflect the outturn price
Confrontational relationships
Quality of work or services threatened
Design solutions are not best value
Reduced competition

16. Selection: Use of MEAT as award criteria
Encourages higher quality proposals – but price still important
Supports delivery of wider government policies such as sustainability
Criteria can be developed to support successful project outcomes
Develops better understanding of requirements and risks

17. Delivery of wider Client objectives
Equality / diversity / inclusivity
Regional / community benefits
Skills and employment
Workforce welfare
Environmental sustainability
Ethical sourcing
Economic growth

18. Delivering wider objectives through procurement
Specifications / requirements
Pre-qualification procedure
Tender criteria
Contractualise tender promises
Incentivise performance
Manage performance

19. Looking ahead

20. Procurement Regulations – post-Brexit
Public sector currently need to comply with EU Directives via the 2014 Regulations(PCR & UCR)
If Brexit deal agreed and UK retains EU process, case law will be determined by EU courts
If no-Brexit deal, problems arise and we lose access to OJEU processes and the EU markets
Could move to a GPA option, but need to become WTO member in our own right – and there is opposition

21. Key steps in achieving successful outcomes
Decide on requirements and objectives
Assess client capability
Develop robust budget
Set out approach to best practice principles
Market engagement
Define/follow the procurement process
Apply assurance – “3 line of defence”

22. Questions?