Okay, so “ProCure21” is a neat moniker for the government’s approach to healthcare construction – but setting aside all the jargon, what does it really mean? Here’s the truth
It’s something of an achievement for ProCure21 to win the accolade of “an exemplar of collaborative working” inside its first full year, and from as stern a judge as the National Audit Office.
Of course, it’s easy enough for the seasoned construction procurers of this world – Tesco, Sainsburys, Arlington, BAA et al – to embrace partnering. They come from a different world – one where the supply chains are dealing with a single entity and one where business plans are formulated years in advance of construction.
ProCure21 caters for a completely different client base. One that embraces more than 600 hospital trusts, many of which are complete strangers to construction, or infrequent clients at best. In this world, partnering has been virtually an unknown quantity, but one that lies at the heart of ProCure21 and its aim of helping the NHS get the most from its buildings.
ProCure21 was launched in May 2002 with five companies – Costain (now ACM), Interserve, Laing (now Laing O’Rourke), Medicor and Norwest Holst – chosen as principal supply chain partners (PSCPs) to participate in the pilot programme. The original five participants were joined in September 2003 by another seven – from more than 220 hopefuls – when NHS Estates launched ProCure21 countrywide.
To secure a coveted framework agreement, the dozen PSCPs had to prove they had an integrated supply chain. The chain had to extend from the upper level (architects, consulting engineers, quantity surveyors, healthcare consultants and professionals) down the construction hierarchy including trade contractors and suppliers (see “In the framework”, page 13).
In line with the principles set out in Sir John Egan’s report Rethinking Construction, the 12 also have to commit themselves to continuous improvement including strengthening the partnering ethos.
Martin Brackstone, Kier Health’s northern director, says philosophically:
If I work for a client using traditional construction,
I may end up working with an architect I don’t know and who doesn’t know me. And it can take time to break down the barriers
Chris Mugford, Engineer wsp
“It is hard work, but construction was ever thus.” To keep the momentum going at Kier Health, six full-time members of staff spread the partnering ethos throughout the company and its supply chain.
Kier has secured a dozen ProCure21 contracts worth about £110m, and Brackstone is currently engaged on a number of projects at two hospitals in York and Hull. He says: “It is much more rewarding because you are building relationships and understand the client’s needs that much better. You understand the constraints and the opportunities that much earlier, so you can manage out the constraints and manage out the risk – that is the beauty of what the supply chain can do to this process.”
Like other PSCPs, Kier has developed an extensive supply chain and some members are linked with two or more partners. Brackstone explains: “We had to demonstrate to NHS Estates that we had existing relationships with those partners and prove we had a track record with them and with clients. And we were not just bringing together a gaggle of people to suit that particular initiative.” (see “How supply chain members are selected”, below)
Brackstone has more than 30 years’ construction experience, most of it gained on traditional contracts – some of which he has less than happy memories. “As a contractor, we would come in after the design was finalised and have no opportunity to influence things. There was conflict between everyone, the client, the contractor and the design teams. I have waited this long to experience the time when a contractor is brought on board at the beginning of the project. There isn’t the blame culture. It is about ‘how do we perform’ and ‘let’s solve it together’. It must result in better buildings because we’re taking away risk and cost uncertainty and replacing them with cost certainty and delivering the buildings quicker and on time.”
Brackstone cites the hospital in Hull as a prime example of where ProCure21 demonstrated its mettle. “The trust wanted a cardio-thoracic unit, which would have cost about £30m. But the building wouldn’t have worked very well clinically and was being shoehorned into the space available. By looking at the whole thing again, we were able to find a better way of configuring some of the existing buildings and bring together a couple of clinical functions. The scheme grew in size, but has become a much better solution. It now offers better value for money and a better functional solution for the trust in the long term.”
At York, construction of a breast and haematology unit was going down a traditional procurement route before ProCure21 took over. A fair amount of the design work had already been done by architect Thompson Spencer and structural engineer Deakin & Walton.
You understand constraints and opportunities that much earlier, so you can manage them – that is the beauty of it
Martin Brackstone, Kier
So to ease the transition, they were transferred to the Kier team, which includes services engineer WSP, quantity surveyor Gleeds and M&E contractor Haden Young (see “The engineer’s opinion”, “The QS’s perspective” and “The M&E contractor’s view” on what ProCure21 means to them). The original quantity surveyor, EC Harris, was retained by the trust as its cost adviser.
Brackstone says one of the first tasks on taking over was “to challenge the ideas clinically, structurally and architecturally”. He adds: “Part of our ethos is to challenge, but not in an adversarial way, what had been done to see if it is the right solution for the client.
“What tends to happen with a lot of trusts is they have development plans, but generally only for a one-off bespoke building. So it might be better for us to say: ‘Hang on, there are other things that you should do first because you’ll get better value’.”
The York team’s partnering skills are kept honed by regular meetings. More conventional site meetings are held every week with input from trade contractors and suppliers. Additionally, all the principal participants meet with the client once a month, although the frequency was every two weeks in the earlier stages of the project. Another communication tool among all but the smaller partners is a common IT platform, Build Online.
Brackstone says his enthusiasm for partnering will increase when everyone, down to the smallest contractor and supplier is signed up. He remarks: “We should be able to take it all the way through, but we’ve got a way to go yet because it’s a learning process. There is still an element of here today and gone tomorrow the farther down you go.”
The engineer’s opinion
Chris Mugford, associate director at WSP, which is designing the building services for Kier Health’s York project, describes ProCure21 as “a breath of fresh air, where there is no need for people to try and score points against each other”.
He continues: “I think it is a far more of an open-book relationship than many. I have worked on partnership projects where some have been more open-book than others. With ProCure21, the whole industry is changing from one based on distrust and suspicion. Now, for example, I can sit down with the principal M&E contractor and discuss the issues openly to arrive at the best solution.”
Mugford thinks having a supply chain where everyone can work together before actual construction starts is a godsend.
“If I work for a client using traditional approaches, I may end up working with an architect I don’t know and who doesn’t know me. And it can take time to break down the barriers. That doesn’t happen with ProCure21 and that’s got to be of benefit to all parties.”
WSP’s associate director says gaining access to contractors and suppliers lower down the supply chain is also improving, which means “they buy into the project, rather than just submit a tender package”.
How supply chain members are selected
xKier has a two-stage process for selecting its partners. The first is a basic questionnaire that it follows up with an in-depth interview plus visits to the firm’s offices or sites. Once firms are selected, the relationship is developed.
Brackstone says: “We held a series of meetings where we got them to input and we contributed back.” These were followed by a workshop, organised by NHS Estates and training agency Knowles. “All partners were invited to get them to understand what ProCure21 was all about,” he says.
Kier has taken on board four firms covering each of the main professions such as architecture, engineering, quantity surveying, and M&E design.
Brackstone adds: “For other partners in major disciplines such as M&E installation, cladding and windows, we are looking at four to six, maximum.” The partnering ethos applies across all of Kier’s regional businesses, not just health, as it helps broaden the supply chain. “It means we have up to 65 or 70 trade contractors or suppliers to choose from.”
The QS’s perspective
Peter Cole has first-hand knowledge of what life was like before ProCure21 – he worked for 21 years with health authorities before joining Gleeds, which is acting as quantity surveyor on the York project. He freely admits: “I was quite sceptical about ProCure21 at first, but now I’m absolutely convinced it’s the right way forward.”
Gleeds’ partner is in a good position to scotch some of the rumours that ProCure21 is more expensive than traditional contracting and that clients are paying more in fees to consultants. He explains: “There is a perception in some quarters that it is more expensive, but what you see is the true cost up front. With traditional contracts, the tender price can be artificially lowered, which is then offset by contractual claims with the result that the out-turn cost is much higher.”
He says a similar perception exists over fees, particularly around the cost management side. “There might be some limited duplication of fees in the early stages, but the route is simpler and there are no bills of quantities, so there are savings in the QSs’ fees.”
Cole adds: “I’ve found there is a real team effort to achieve the guaranteed maximum price within the budget.”
The M&E contractor’s view
Haden Young first got involved with Kier Health’s York project after a fair degree of the design work had already been undertaken. There is no sinister reason – the project was originally going to be let on a traditional contract, but changed to ProCure21 late in the day.
Despite this less than ideal timing, Phil Harrison, design-and-build co-ordination manager with Haden Young, believes the ProCure21 process has allowed benefits to flow through before construction got under way. He explains: “We were still able to review the design with WSP (the services engineer) and have an input on co-ordination and installation issues. We were also able to involve members of our supply chain. For example, we brought in our BMS (building management system) and controls suppliers so that they could get involved in our consultations with the engineer and the trust.”
Haden Young is involved in two other projects at the hospital and was brought on board right at the start. “That’s when everyone can benefit and it has allowed us to put forward a few suggestions on using new systems and ways to tackle the work.”
In the framework
NHS Estates selected the 12 PSCPs after a rigorous inspection of their procurement procedures and supply chains. The partners are: ACM Health Solutions; Balfour Beatty; Carillion; HBG Bloom; Integrated Health Projects; Interserve Health; Kier Health; Laing O’Rourke; Medicinq; Medicor; Taylor Woodrow; and Wates Group.
Each PSCP has its own set of PSCMs (principal supply chain members) comprising architects, consulting engineers, quantity surveyors, healthcare planners, facilities managers, contractors, subcontractors, material suppliers and component manufacturers.
Framework agreements operate nationally and last a minimum
of five years. The frameworks operate on the following principles:
- a commitment by all to partnering;
- continuous cost improvement;
- sharing information with the NHS and other supply chains;
- monitoring performance;
- ensuring value for money;
- using the NEC Engineering and Construction Contract option C (target contract with activity schedule). Payments are based on actual costs plus an agreed profit margin;
- once the ECC target cost has been agreed, it becomes the guaranteed maximum price for the scheme. A gain share system operates for projects completed below the GMP;
- using NHS Estates’ pre-start agreement to enable PSCPs and PSCMs to work with a client at the earliest possible opportunity. The agreement allows PSCPs and PSCMs to be reimbursed for their actual costs before a target cost has been agreed and the contract details finalised;
- everyone in the supply chain being subject to open-book arrangements in all areas, not just accounts;
- pursuing lean construction.
How a trust selects a PSCP
The route taken by a trust when selecting a partnership consortium for a project generally involves three stages – a questionnaire followed by an open day and then a formal presentation-and-interview session.
It starts with a trust contacting the 12 PSCPs by email in which outline details are given for the scope of the works and the type of healthcare facilities required. The whole process takes about six weeks.
Usually, the PSCP forwards this email to other supply chain members to check interest and availability. Kier, for example, asks its partners to complete a matrix indicating where their experience lies in up to 50 healthcare disciplines. If Kier gets an enquiry for, say, a scanning unit, it can identify the relevant firms straight away and look at its portfolio.
In most cases, PSCPs are given a week to respond to a series of standard questions, such as listing their selected supply chain partners, what innovative ideas or techniques they will bring to the project, and how quickly they will deliver a guaranteed maximum price. They are also asked what they would do in the first six to eight weeks of the project and where the office that manages the contract would be located. The answers are scored and, generally, the top two, three or four PSCPs are shortlisted.
The second round usually involves PSCPs and members of their supply chains being invited to an open day where they can get a fuller appreciation of the project, any further documentation and a chance to see the site. PSCPs also get the opportunity of one-to-one sessions with the trust to exchange ideas.
The third stage involves a meeting at which the PSCP gives a presentation, which is then followed by an interview. Throughout this process, the main focus is on discovering which PSCP offers best value for money and the most relevant experience. At no time is cost used when making a decision.
Their submissions are scored, with the contract going to the highest.
NHS Estates has made available a team of implementation managers to guide trusts through the whole process.
- Currently reading
It’s all about trust