Adding Value to the Public Sector

How SCF are tackling Industry Problems.

The Southern Construction Framework (SCF) wanted to tackle the systemic problems in public sector construction, where budgets are fixed far in advance and political, demographic and economic pressures result in high levels of disputes and a lack of cost and time predictability.

The problem

Specific challenges were:

60% of projects delivered late
31% of projects delivered over budget
27% of projects achieved less than 8/10 for client satisfaction for service
19% of projects achieved less than 8/10 for client satisfaction for product
21.6 m3/£100k waste diverted from site

Public procurement was fragmented across many organisations; there was no ‘joined-up’ approach to delivering public construction projects. The lack of coordination was causing lost opportunities to increase efficiency in design and specification of public facilities, resulting in overall poor value. Plus, the drive for the lowest cost was compromising whole-life asset cost management. Public authorities were spending large sums on repeat procurement, struggling to retain budgetary control. It was difficult to predict the cost or speed of delivery.

In addition:

Local supply chains with finite resources were unmanaged
End product quality was inconsistent, with best practice not shared
Varying safety standards were being achieved
Little regard for employment rights and health and well-being
Clients felt unsupported in the understanding and management of their asset following handover

The piecemeal approach meant that lessons were not learned, knowledge was lost, good practice not recorded and added-value opportunities not achieved. There was a need for ‘best in class’ procurement driven by a ‘Trusted Advisor’.

The Solution

In the last 4 years of the current SCF iteration, the Framework has delivered £130m of value benefits and saved 1,500 weeks on traditional procurement programmes. The Framework has:

150+ commissions
70+ public sector organisations
Total project value of £2.5bn
Added an average of £0.10 added value for every £1 of project spend (10% extra added value)
Contributed £11m to third sector / charitable enterprises
Provided over 220 years of apprentice training, 8,300 trainee weeks, 182 education engagements, 388 work placements, 35 graduate placements, and 251 ‘meet the buyer’ events

Adding Value

SCF is acutely aware of wider current societal issues and is championing the awareness of mental health and well-being support, specifically within construction. In May 2019, the SCF will launch a Mental Health initiative that has cross-stakeholder engagement to provide signposting to tangible support of an estimated 1 in 4 workers, who will at some time suffer from mental health issues.
SCF has developed aggregated procurement and standardised products to further increase value, reduce design cost and improve predictability and quality of product through more efficient use of standard/pre-manufactured components, e.g. Class Space Optimised School Design and standardised school products. SCF drives continuous improvement, pooling main contractor’s resources in topic-focused groups to identify and improve collective performance.
Engagement with other frameworks in the National Association of Construction Frameworks (NACF) allows SCF to create greater value improvements through information sharing at a strategic level. Collaborating with industry organisations, such as Constructing Excellence, the CIOB and central and local government departments, SCF shares knowledge to shape best practice and increase value. For example, the SCF led the development of a national survey to support the Central Government response following Grenfell.
SCF’s commitment to continuous improvement has led to typical savings of 40% management time, 10% construction time, and 50% pre-construction time when compared to traditionally tendered projects. In an industry notorious for disputes and litigation, no SCF project has resulted in dispute throughout the generations of the framework.

Highlights:

Overall SCF has added £116m of Added Value, in SCF3 achieving on average 10% added value in pre-construction.
Driving improvement through SCF and NACF, value has been improved by:
i. Delivering On time: 75% vs 55% industry average,
ii. Delivering On Budget: 76% vs 64% industry average
iii. Making Payments On-time: 91% vs 79% industry average
iv. Resolving Defects Promptly: 86% vs 73% industry average
Throughout the life of all framework generations SCF has achieved repeat procurement savings for clients of over £500m, saved over 6,000 weeks of pre-construction time, and delivered 220 years of apprentice training, at the same time as increasing pre-construction time predictability (+31%), construction time predictability (+13%) contractor performance (+23%) and stakeholder satisfaction (+6%), by engaging, understanding, delivering, measuring and improving value for public bodies across the Southern region.