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Client procurement strategies shape the construction industry? – A discussion - Professor John Lorimer
1.
2. Agenda
Drivers
Procurement
Tools &
Collaboration Training
3. Manchester is the regional capital of the north
west of England, the UK‟s largest economic
region outside London. The Greater
Manchester conurbation is by far the most
densely populated part of the region, with
over 2.5 million people living in an area of
1,200 km2.
Manchester is the largest of the ten
Greater Manchester districts,
but in a relatively small area of 117 km2.
4. Population
Population fell from 703,082 in 1951 to 422,915 in 2001.
However following the recent growth period the
current Manchester population is estimated to be 498,779.
5. Economy
o In 2008 the city region generated over £44bn of GVA – Circa 5% of the
national economy & 40% of NW GVA
o GM is a larger economic unit than Wales, Northern Ireland or the North East
of England
o GM is nationally leading in balancing of civic leadership, accountability and
business expertise
o Major companies such as the Bank of New York Mellon, Google, Nike and
Credit Suisse have all recently been attracted from the UK and overseas
o GM has particular strengths in advanced manufacturing, life
sciences, creative and digital media and financial and business services
o We have an exceptional higher education offer with the largest student
population in Europe of over 100,000 students across five Universities.
Economic forecasts suggest that GM has the business base to create 75,000
(net) new jobs by 2015
6. Recession
o Over £1.7bn (3.3%) and 46,000 (3.5%) GM jobs lost between 2008 and
2010
o GM unemployment increased by 44,300 (64%) between 2007 and 2010
o Youth unemployment increased by 13,800 (40%)
o The number of companies winding up was (on average) a third higher
between 2008 and 2010 compared to 2007
o Personal insolvencies peaked at 5,700 in 2009, representing 28.2 per
10,000 adults
o House prices have fallen by 18% from their April 2008 peak and the number
of sales fell to a third of peak volume
7. A Prospectus for Cities
o Cabinet Office leading work with Cities to make the case for Cities in driving
economic growth across the UK and set out a radical platform for devolution
o Opportunity to create a framework for a tailored deal for growth according to:
a robust economic narrative and strategy for growth, appropriate governance
and leadership from both the business / public sector and delivery
mechanisms that provide assurance that outcomes will be achieved
o Core Cities amendment to the Localism Bill supports this tailored approach and
the need for devolution to be linked a cities‟ ability to deliver. It provides a
mechanism for enacting this approach.
o In Manchester, the Prospectus will be significantly strengthened by some
flagship proposals….
8. Etihad Campus
£127m investment across 32 hectares of East Manchester - 250 new jobs, 80
apprenticeships, a further 155 FTE construction posts and 310 existing jobs
safeguarded
9. Sharp Project
Digital and creative media hub currently used by Sky 1 and Channel 4. Alongside MediaCityUK
establishes Manchester as the 2nd most significant media centre in Europe. Broadband/digital
infrastructure here is key to the success
10. Airport City EZ
New hub for global businesses linking a string of key sites.
Up to 10,000 new jobs over the next 10 years of which
at least 7,000 would be new to GM.
All business rates (circa £10m+) available for reinvestment.
11. Spinningfields
Over 8,000 financial and professional jobs and the highest rents in the north.
Next major opportunity is the ITV site and plans to strengthen Liverpool Road
and the gateway into Castlefield.
MOSI is another important part of this project.
12. NOMA / Coop
New Co-op HQ in a new neighbourhood of the city centre with over 1m sq ft of
new offices, residential and leisure uses including a hotel which is now in
planning.
The development will have the capacity for over 15,000 jobs.
13. Civic Quarter
Transformation of the Town Hall Estate,
Elisabeth House and the series of buildings opposite the Peace Gardens
and Peterloo House. Potential for another 10,000 jobs in the wider area.
14. Retail
Many stores amongst the best performing in their groups.
No voids in the Arndale – footfall during 2010 was over 38m up from 25m in 2004.
Other Centres, have not performed to anything like this level.
15. New Housing
MCC working with Redrow to construct 400 family homes
across six sites in Harpurhey and Moston.
This represents £30m private investment including a
local labour agreement and deals to improve affordability.
16. New Ways of Working
o Public Sector Reform
o City Region Pilots –
Better Life Chances
and Early Years
o Community Budgets
o Better Life Chances
o Health and Well Being
o Work And Skills
o Low Carbon
o Flexible lettings
17. Work & skills
o Future Jobs Fund - 1,511 Future Job Fund
opportunities filled in Manchester with 55.1% of
people engaged moving on to employment (the
majority), apprenticeships, training or learning or
volunteering
o Apprenticeships - Higher number and the greatest
% increase of apprenticeship starts for 16-18 year
olds in Manchester as compared with the other GM
local authorities.
o Manchester Employer Suite - Set up to link more
Manchester residents who are out of work with
vacancies in the City Centre. Since it opened in
November 2010, over 2,100 Manchester residents
have been referred to the Suite for training or
interview with 458 residents moving into
employment.
o Get Hired Event - Wythenshawe - over 800
residents attended with 101 JSA claimants securing
work within 3 weeks of the event and a further 84
signing off.
18. Strategic fit/Overview of
commitments
o Greater Manchester Climate Change Strategy 2011-20
A City which has adapted to a changing climate, is
powered by a low carbon economy and has embedded
carbon literacy into its organisations, lifestyles and
behaviours, while reducing its carbon emissions by 48%
by 2020
o Manchester – A Certain Future (Manchester Citywide)
Manchester will be a world class low carbon city which
has reduced its carbon emissions by 41% by 2020 and
has embedded low-carbon thinking into the lifestyles and
operations of the city
19. Environmental Strategy
Work Programmes
Green Infrastructure
Education
Third Sector
Energy Infrastructure
Domestic Buildings Public & Commercial
Buildings
Environmental Strategy
Communities/
Carbon Literacy Sustainable Consumption
Sustainable Transport & Production
Carbon Metrics
Sustainable Events Green Jobs
Business
20. Sustainable Transport
Aim: To reduce carbon emissions and promote sustainable travel across
Manchester and in particular within the City Council.
Examples:
o Workwise project - helping unemployed overcome transport barriers of getting
back to work in Wythenshawe
o Travel Planning – offering advice to local workplaces and organisations to
improve their use of sustainable transport
o City Car Club – car hire scheme in City Centre, Chorlton, Didsbury
o Adult cycle training – offering free cycle training to adults
o Metrolink expansion
21. “Government will require fully
collaborative 3D BIM….as a
minimum by 2016”
“A staged plan will be
published with mandated
milestones..”.
“a phased process working
closely with industry
groups…..
“allow time for industry to
prepare for the development
of new standards and for
training”
22.
23. What is BIM?
BIM is an acronym which represents three
separate but linked functions:
Building Information Modelling: Is a BUSINESS PROCESS for generating
and leveraging building data to design, construct and operate the building
during its lifecycle. BIM allows all stakeholders to have access to the same
information at the same time through interoperability between technology
platforms.
Building Information Model: Is the output of the business process resulting in
a DIGITAL PROTOTYPE, a virtual computer model of a project which holds
selected structured data about the asset (design, quantity, time, cost, as built
etc).
Building Information Management: Is the ORGANIZATION & CONTROL of
the business process by utilizing the information in the digital prototype to
effect the sharing of information over the entire lifecycle of an asset. The
benefits include centralised and visual communication, early exploration of
options, sustainability, efficient design, integration of disciplines, site
control, as built documentation, etc. – effectively developing an asset lifecycle
process and model from conception to final retirement
25. Programme
Active Management
Building Management
Strategic Management
Budgets
Carbon
Enable IGT Delivery
Live Operations Green Economy Roadmap
Resilience
Carbon
Early Adopters Cost
Planning
O& M Handover etc
Consistency
Cultural Change
Packaging
PUSH - PULL
COBIE Web Web
Enriched Data “Data” Driven “Process” Driven
COBIE
Database
File Based
Repository
Mobilisation Phase 1 Phase 2 Phase 3 Phase 4
Five Years More Years
Red Team Projects
Blue Team Projects
Live Operations
27. Structural M&E
Architectural BIM
BIM BIM
Construction Shared
BIM data BIM
Integrated BIM
28. Laser Scanning
o Point Cloud output of laser scanning
o Use of high definition scanning
equipment
o Captures millions of survey points
(3D)
o Provides accurate as-built
information
o Interoperable with BIM tools
o Used as basis for design
development
o Validates accuracy of existing model
33. Model-based cost management (5D)
3D Model Time Cost
o Measurement, estimating and scheduling
o Feasibility studies, cost planning, estimates, schedules of work
o Quantities, materials, labour, resources
o Comparative analysis and review
o Interoperability with 3D modelling technologies
o Reporting and data extraction
34. MCC FM view of BIM
o 2D difficult to understand
o Hard to visualise
o Functionality issues can be
overlooked / missed
o Limited engagement
o Typical 2D drawing of THC
Link
35. MCC FM view of BIM
o 3D Model fantastic visual aid
o Building comes to life
o Clarity of operational issues
o Positive engagement
BIM model showing section between CL and THX
36. BIM Aspirations and
Expectations
o Must haves
o Link to Concerto – MCC Building Management Software system
o Detailed Mechanical and electrical asset register
o Life Cycle replacement programme
o Room Data linked to:
• Specifications (all assets)
• Supplier / contact details
• Linked to service schedules / requirements (M&E)
37. BIM Aspirations and
Expectations
Like to haves
o Link to Energy Management Systems (zoning, out of hours use
event management, etc)
o 3D routes / mechanical and electrical distribution
o Known asbestos locations - link to Asbestos Management Plan
o Drainage infrastructure, distribution and connections
o 3D all service duct routes
o Ability to adapt and update the model to reflect future changes
o Staff induction tool. Customer communication tool
o Marketing tool, events and community schemes
38. BIM Aspirations and
Expectations
Want to haves
o Have access to fully integrated 3D fly through
o Full access to fully integrated 3D External models
o Link to fire risk assessments
o Link to operational zoning (e.g.; cleaning, events, etc)
o Run logistical tests / models
o Ability to link to thermal models
o Etc….
39. The Holy Grail
Energy
Management Known
system asbestos
Specs Fabric & locations
and finishes
supplier Asset
Ability to details register Reactive
rerun contact maintenance
thermal links
Link to
model
Concerto Statutory
Ability to MCC Service
link to BMS schedules
Cleaning thermal PPM
schedules model Evidenceof
and works
zones completed
(CERTS)
Zoning of Room M&E Fabric
building, Data BIM Model O&M and
Run managing sheets (asset finishes
logistical events register) PPM
tests and
models
3D Duct
routes, drai Life cycle Condition
nage replacement
Ability to survey
distribution programme
link to information
Fire Risk
Assessment
Comms
tool
Inductions Ability to Churn Materials
Customer.
update
Management and
Marketing
Planning components
the model 3D
Service selection
and data
routes
M&E
40. Maturity Level
Data Richness
10
Interoperability/ 9 Life Cycle Views
IFC Support 8
7
6
5
Information Accuracy 4 Roles or Disciplines
3
2
1
0
Spatial Capability Business Process
Graphical Information Delivery Method
Change Management Timeliness/Response
41. Manchester People into
Construction (MPiC)
Securing Local Economic
Benefit for Manchester
Residents
42. Why?
o £350 million Capital Expenditure
o Corporate Objectives
o Maximise Partners Added Value
o Provide Real opportunities
43. What is it?
o 269 Training Opportunities
o Apprenticeships = 197
o Internships/Work Experience = 60
o Future Jobs Fund = 12
44. MCC
Procurement Delivery Partners
Regeneration Aspire
Corporate Personnel Connexions
Capital Programme Skills Solutions
Economic Development Unit Manchester College
Placement Providers
GB Building, Laing Other
O‟Rourke, Reviva, Balfour Partners/Providers
Beatty, Crudens, Bramalls AGMA, NIEP, RSL‟s
, National Apprentice
Willmott Service
Dixon, ISG, Faircloughs, Construction Skills
Parkinsons, Mitie, Ground
works
Manchester
Working
45. Challenges
o Stakeholder Complexity
Management Function
o Creating Sustainable Opportunities
Long-term relationships with partners
o Minimising Risk to Partners/Trainee
Aspire Model
46. 2010 research
o MCC spent £357,382,215.03 upon its top 300 suppliers (08/09)
o MCC spent £183,967,557.15 upon Manchester based suppliers (51.5%)
o £43,164,744.32 is spent in Ardwick
o £87,541,509.18 is spent in Manchester neighbourhoods in 10% most
deprived nationally
o £309,055,609.74 (86.5%) is spent in Greater Manchester
o All suppliers re-spent £89,345,553.76 in the Manchester economy
• This equates to 25p in every £1 received
• Manchester procurement contributes towards the support of 5225 jobs
in the Manchester economy
o Range of wider local economic, social and environmental benefits
47. 2011 research
o MCC spent £547,382,215.03 upon its top 300 suppliers (53%
increase)
o MCC spent £294,836,725.96 upon Manchester based suppliers
(53.9%)
o £68,709,428.04 is spent in Harpurhey
o £154,770,295.70 is spent in Manchester neighbourhoods in 10%
most deprived nationally (77% increase)
o £497,712,492.26 (90.9%) is spent in Greater Manchester
o All suppliers re-spent £233,422,039.95 in the Manchester economy
• This equates to 43p in every £1 received
48. What Value is MPiC Generating?
Costs
o Manchester City Council - £86,500 per year
o Wages – (Average of £10,665 per person per
year)
o Supervisory and training costs to construction
partners
o Minimal costs to the apprentice
49. What Value is MPiC Generating?
Benefits
o Productivity of the Manchester economy (£11,643 per person per
year)
o Reduced welfare benefit costs (£8,100 per person per year)
o Reduced spending of healthcare (£508 per person per year)
o The value of reduced crime (£3,494 per person per year)
o Other softer benefits – Not valued but still important
A total of £5.46m of social,
economic and environmental benefits generated
For every £1 invested an additional £4.74 is generated in
social, economic and environmental benefits
51. Collaboration
1. act of working jointly; „they worked either
in collaboration or independently.
2. act of co-operating traitorously with an
enemy that is occupying your country.
Latin roots: from labour, toil together
52. “Collaborative working enables you and
your partners to create more value by being
more efficient and effective. It does this
because collaborative behaviours are all
about working together earlier and smarter
for mutual benefit. Eliminating waste and
inefficiency in methods and processes
significantly increased predictability and
suitability of outcomes”
53. Where does £100 go?
Designer £7
Client £18
Supplier £42
Contractor £33
54. Collaboration
o There are 6 critical success factors for
collaborative working
o Early involvement
o Selection by value
o Common processes and tools
o Measurement ) continuous
o Long-term relationships ) improvement
o Robust commercial arrangements
55. Collaboration
Key features of project alliances
o Single integrated team with the client on the inside
o Collectively owned risks and reward
o Decisions taken on „best for project‟ basis
o Alliance partners incentivised to achieve outstanding
performance
o Full „open book‟ accounting
o Culture of no fault, no blame and no dispute, with an
uncompromising commitment to
trust, collaboration, innovation and mutual support
58. A time of radical change...
“This strategy calls for a profound
change in the relationship
between public authorities and the
construction industry to ensure the
Government consistently gets a
good deal and the country gets the
social and economic infrastructure
it needs for the long-term”
59. North West England
o Five sub regions
o 47 local authorities
o Four-fifths of the region is rural, most
of the population live in urban areas
o 60% of people live in conurbations of
Merseyside and Greater Manchester
60. Where does the North West Construction
Hub operate and who can use it
All North West Public Cumbria
Sector Bodies have
access.
Over 200 organisations
were listed in the OJEU
notice Lancashire
Gtr Manchester
Merseyside
Cheshire
61. Why use it?
o Lead organisation on behalf of North West Contracting Authorities
o NWCH is responsible for establishing frameworks, letting procurement
agreements, playing a key role in the management
o NWCH is responsible for benchmarking and performance
measurement of those agreements
o Opportunities to apply lessons learned and share benefits across the
North West region.
o The results are less waste, less duplication, local engagement
and greater efficiencies which gives better value for money
62. Sub regional lots
Develop skills across the region
Promote sub regional
engagement &
Generic model for framework
ownership
management
Encourage
participation from sub
regional contractors
63. NWCH Frameworks
The NWCH procured three frameworks for the
North West region
Low Value (£0 - £500k) January 17 partners
2011
Medium (£500k - August 2010 14 partners
Value £10m+)
High Value (£10m+) May 2010 5 partners
64. Framework benefits
Saving on project
7.5%
costs
10-15% Time savings
Capital cost savings –
1-2%
result of not tendering
65. What does it mean for local
clients
o Reinvesting in the local economy
o Fair payment
o Local supply chain participation
o Support for SMEs
o Apprenticeships / Youth Employment
o Local employment
o Low Carbon
66. Conclusion
o Delivering sustainable efficiency savings
o Reducing consultancy and construction
costs
o Projects closer to target cost and time
o Reduction of disputes, claims and litigation
o High client satisfaction rates
o High proportion of value of work
undertaken by SMEs
67. Conclusion
o High proportion of local labour and sub-
contractors
o High take-up of government initiatives such as
Fair Payment, Apprenticeships, Localism
o High proportion of construction, demolition and
excavation waste diverted from
landfill
o Good Health and Safety performance against
national average