new infrastructure procurement routemap: a guide to …/media/files/insights... · 2014. 1. 11. ·...
TRANSCRIPT
INTRODUCTION
The Government has published the "Infrastructure
Procurement Routemap - a guide to improving delivery
capability" ("Routemap") for consultation. This is part of
the implementation programme for the Infrastructure Cost
Review and is a set of guidelines and tools designed to
support public sector infrastructure providers' capability to
improve the delivery of large scale projects and
programmes, long term capital investment plans and
publicly procured mega-projects.
It is widely acknowledged that procurement behaviours and
associated processes can be lengthy, expensive, adversarial
and risk averse. The Government recognises that a change
in behaviour is needed to address issues of inefficiency in
the procurement process and project delivery. The
Routemap is one way of achieving this goal.
The Routemap is not a prescriptive process. Rather, it
ensures that the "right" questions are asked at the right time
and that key risks are identified. It is anticipated that the
projects utilising the Routemap will see a number of
benefits, including achieving value for money, avoiding
unnecessary costs, potential increase in revenue and
development of a tailored best practice toolkit.
In this client alert, we take a closer look at the four key
components of the Routemap:
■ complexity assessment of the organisation and the
project or programme delivery environment and
associated pipeline;
■ capability assessment of the procuring authority and
project or programme delivery partner and the
supporting supply chain;
■ delivery route/procurement option selection and
implementation; and
■ innovation and best practice resources (building on
existing guidance and tools where appropriate).
COMPLEXITY ASSESSMENT
An assessment of the organisation, project delivery
environment and complexity of the issues is the first step of
the Routemap. The procuring authority will consider the
degree of complexity associated with a number of factors
such as stakeholders, interfaces, technology, its requirements
and financial impact. The output is a qualitative assessment
which should provide a better understanding of associated
risks, their consequences and potential revenue generating
opportunities.
CAPABILITY ASSESSMENT OF THE PUBLIC AND
PRIVATE SECTOR PARTIES
The next step is an assessment by the public sector of its
own capability to deliver the project and manage assets. The
assessment is based on a range of characteristics including
the ability to define required outcomes, governance, basis of
decision making and its effectiveness. A low score would
lead to the development of an improvement plan to put the
procuring authority in a position to demonstrate appropriate
capability.
This is followed by an assessment of the private sector
capability as against a range of criteria. The private sector
INFRASTRUCTURE PROCUREMENT ROUTEMAP: A GUIDE TO IMPROVING DELIVERY CAPABILITY
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entity should be able to develop a project or programme to meet
procuring authority's strategic outcomes and maximise value
from the supply chain by effectively managing the
relationships. A low score will mean that the private sector
entity in question is capable of procuring simple projects or
commodities and will need to either improve or procure
capability in the market. By contrast, a high score will
demonstrate high level of ability to generate best value.
The Government intends the capability and complexity
assessments to examine conditions that influence the
achievement of successful outcomes rather than individual
ability or action. It will be interesting to see how this is applied
in practice. Whilst the aim is to increase overall efficiency
there is a danger of public sector engaging in a lengthy and
expensive assessment exercise at the outset.
DELIVERY ROUTE/PROCUREMENT OPTION
SELECTION
The results of the capability and complexity assessments will
dictate the selection of the appropriate procurement route. A
highly complex project or programme will lead to the
employment of joint venture, alliancing, partnering and PF2
procurement routes which require a higher level of capability.
If the current capability is assessed to be at a low level then the
options are to reduce complexity of the project or improve
capability. The consideration of the appropriate procurement
route will also highlight the need for and the nature of any
enhancement activity required for effective project delivery and
only once this has been finalised should the procurement
exercise commence.
With the exception of complex infrastructure procurement,
there is now a presumption against the use of the competitive
dialogue procedure which has often resulted in long
procurements and high costs for industry. However, the
Government recognises that it can be successfully used where
the procuring authority has undertaken adequate preparation
and has a suitably skilled team which is able to engage robustly
with the private sector. The Routemap should go some way
towards ensuring that procuring authorities are well equipped to
adopt the competitive dialogue procedure where suitable.
INNOVATION AND BEST PRACTICE RESOURCES
The principles of the Routemap are consistent with existing
government policy and guidance on effective procurement and
the Government is developing a number of tools that can be
deployed alongside the Routemap, as follows.
At the Autumn Statement 2012, the Government published full
details of a new approach to public private partnerships - PF2.
Whilst restating its commitment to private sector involvement
in delivering infrastructure and services, the Government
recognised the need to address the widespread concerns with the
Private Finance Initiative and the recent changes in the
economic context.
From January 2012, the Government has mandated the adoption
of LEAN sourcing principles across central government and the
Cabinet Office has published Standard Operating Procedures
(SOPs) for open, restricted and competitive dialogue procedures
and is working with the Treasury to develop a set of SOPs
tailored for use with PF2 procurements. The Department for
Business, Innovation and Skills has developed "PAS 91" - the
Publically Available Specification for Construction Related Pre-
Qualification. This standard is to be used across all Government
departments and is focused on the key questions required to test
compliance with the core criteria essential for prequalification
and to establish uniform requirements for their application and
use.
The Infrastructure Cost Review and Government Construction
Strategy implementation programmes have been developing a
number of new best practice approaches including: early
supplier engagement; strategic incentivisation; supply chain
contract alignment; use of project bank accounts; and client
requirements and technical standards. The intention is to have
integrated resources that can be used to support effective
running of the procurement process.
SUMMARY
The Government has already applied principles of the
Routemap on both the Crossrail Project and the Thames Estuary
Phase 1 Programme. With securing efficiency and savings in
mind, the Government intends to use the Routemap on a trial
basis in the Top 40 projects identified in the 2011 National
Infrastructure Plan and to encourage its application in future
major projects and programmes prior to the approval of the
Outline Business case. The key to the success of the
Government's various initiatives would be consistent and
streamlined guidance and consistent application across
Government departments and local authorities.
The closing date for consultation on the draft toolkit is
22 April 2013 after which responses will be reviewed in
preparation for the launch of the final toolkit in late Spring
2013.
CONTACTS
If you would like to discuss any issues contained in this
briefing, please get in touch your usual DLA Piper relationship
contact in the first instance.