Public procurementTim BanfieldDirectorNational Audit Office

27 June 2013

Four aspects:

• Why projects matter for government;• Our evaluative approach;• How we are developing our skills;• How we share insights.

Why projects matter for government• Projects are the currency to deliver change;• 95 percent of government policy is delivered through

projects;• The majority of public sector projects do not deliver as

expected;• Failures may relate to efficiency (ie not delivering to

time/cost/performance) and/or effectiveness (not achieving the desired benefit/policy outcome);

• The private sector isn’t much better.

GMPP£384 bn

HO

DfE£6,699m

DEFRA£3,969m

HMRC

DCMS

CO

NS&I

FCO

ONS

DfIDDCLG

HMT

DWP£26951m

DoH£20344

£13,201m

£12,489m

£1,465m

£1,218m

£840m

£713m

£521m

£423m

£115m£20m

MoD£150,782m

DECC£89,068m

DfT£46,970

mDWP£26,506

m

DoH£19,927

m

BiS

HO

MoJ£7,736m

£1,221m

Characteristics

- Strategically important programmes

- High value/risk/ reward

- Unique projects, complex & uncertain

- Long-term horizons

Complex CBA

Vested interests in projects

Contracting with powerful players

Long supply chains

Operational impacts, some managed through third parties

Decommissioning challenges

Complex accounting

Contingency planning and maintain/replace decisions

Governance & accountability

Resource constraints

Financial management

Business transformation

Providers of last resort for strategic national services

Management and maintenance of current asset base

Man

agem

ent

chal

leng

es

There are plenty of examples of good project planning and execution………Few could have envisaged how successful the London 2012 Games would turn out to be. The construction programme was completed on time and within budget, 11 million tickets were sold and our athletes excelled. Crucially, the Games passed off without major transport disruption or security incident. Taken as a whole, the Games were a success by any reasonable measure and it looks as if not all of the Funding Package will be used.

Our evaluative approach

How we look at project delivery (1)

Influencing improvement

Desired Capabilitystate

CurrentState

of Capability

DeliveryEnvironment&Complexity

Value for money

Would you bet your own money on this project delivering the policy objectives

There are ten factors common to projects.They provide a framework to:

• Understand the specific challenges the project faces;

• Assess whether the bespoke delivery approach proposed is realistic;

• Judge whether the project has a good chance of achieving its objectives.

Source: NAO analysis of over 3,500 projects

How we look at project delivery (2)

Influencing improvement

Desired Capabilitystate

CurrentState

of Capability

DeliveryEnvironment&Complexity

Value for money Judgement

Organisational Competency

Portfolio Prioritisation and Management

Individual Project & Programmes

Knowledge Base• What works, fails, why and effect• Capability across government• Departmental assessments

Intelligence on current portfolio of major projects

How we are developing our skills

Capability Growth Path Indicative Roles, Contributions

Role Complexity of Project (DECA)

Basic Project Management tools techniques

Understanding leadership & behaviour

NAO Knowledge/ Back Catalogue exploitation

NAO Analytics External Profile

Lead interventions, advisory & quality assurance

Complex Expert in some aspect, competent in most

Application of analytics & interpretation

Comprehensive knowledge & interpretation

Thought leader Thought leadership NAO ambassador

Manage delivery & apply complex analytics & quality assurance

Complex Competent in most, growing expertise in some

Application of analytics & interpretation

Comprehensive knowledge & some interpretation

Lead development Recognised expertise NAO ambassador

Lead application of analytics & quality assurance

Complicated Competent in some & potential expertise identified

Awareness of dynamics & analytical tools

Interrogate & utilise appropriately

Contribute to development

Contribute to debate NAO ambassador

Supporting Simple Appreciation Awareness Access & understanding

Awareness & understanding

Engages

Portfolio of Evidence(Authentic, Valid, Reliable, Current, Sufficient)

Attribute Based - Professional qualifications- CPD- Contribution to development of profession- Specific qualifications e.g. PRINCE 2

- Assurance/Gateway reviewer

Performance - NAO intervention experienceBased - Analytic development

- Corporate knowledge development- Secondment- Previous career- External engagement- Academic engagement & research

Collegiate - Support to colleaguesBehaviours - Learn contribution

- Ability to work with clients

Competencies

Unit Elements Why it Matters Illustrative Techniques/ Attributes

Understanding success • Translating policy intent• Benefits optimisation• Requirement setting

• Systems engineering• Value engineering• Benefits management• Sponsorship

Designing the delivery approach

• Understanding the delivery environment & complexity

• Alternative delivery models• The legal & legislative framework

• Parliamentary procedure• Organisation design

Portfolios presentation

Making investment decisions

• Time and cost forecasting• Risk and uncertainty controls

• Estimations Monte Carlo simulation• Reference class forecasting• Historic trend analysis• Risk management• Scenario modelling • CBA & business cases

Delivery through/ with others

• Commercial engagement• Engagement with other delivery partners• Broader stakeholder/ influencer

relationships

• Legal & EU law• Contractual design• Negotiation

Stakeholder mapping & relationship mgt• Public enquiries & legal challenge

Behavioural aspects • Delivery leadership• Organisation & personal incentives• The operating environment• Skills & capability development

Project prioritisation • Project controls• Change management• Disputes• Interdependencies

• EVM• Schedule design• Dispute resolution/ arbitration• Team building & dynamics• Decision making

Transition to BAU • Acceptance• Process & cultural alignment• Learning & applying knowledge

• Change management

Novice

Knowledgeable

Experienced

Expert

Capability

Time* Evaluation Point

*

*

*

The Norwegian Approach

How we share insights

The range of assurance options

Five factors influencing successful delivery

Five key elements for initiating successful projects

GMPP

• Portfolio Management

• On Time

• On Budget

• Delivering Specified Benefits

THE MPA LEADERSHIP ACADEMY

• World class project leaders

• Much improved outcomes

• Value for money

GOVERNMENT MAJOR PROJECTS PORTFOLIO

MAJOR PROJECTS LEADERSHIP ACADEMY

OPERATING ENVIRONMENT

ACHIEVEMENTS& LEARNING

• Portfolio Management

• On Time

• On Budget

• Delivering Specified Benefits

• World class project leaders

• Much improved outcomes

• Value for money

• The ultimate Approach

• The ultimate Structure

• The ultimate process

• Interactive electronic dimension

• Advanced access systems

• Sophisticated alignment tool

The 4 Pillars of the Major Projects Authority

Thinking differently about success

2. Outcomes

How the project is used Impact Relevance Take -up

3. Benefits

What value is added to society (realisation of policy) Sustainability Satisfies needs Economic effects

1. Outputs

Performance Time Cost Quality

Tim Banfield

Tel: +44 20 7798 7662Fax: +44 20 7798 7588

E-mail: tim.banfield@nao.gsi.gov.uk

Website: www.nao.org.uk