Three government departments, which spend £2bn a year in total on construction, have signed a deal to share knowledge about procurement and buildings management.
The link-up, between the NHS, the Ministry of Defence and the government’s official surveyor, was unveiled by NHS Estates chief executive Kate Priestley on Monday.
The agreement will allow the three departments to swap expertise in property management and procurement, said Priestley.
Under the agreement, to be called the Concordat, each partner will nominate key staff to provide cross-department consultancy services. The MOD’s Defence Estates has put forward Ted Pearson, its commercial director, to advise on procurement; and Allan Baillie, responsible for its strategic management of land and property, will look after the strategic management of land and property.
The deal was signed by Priestley, Defence Estates chief executive Ian Andrews and Valuation Office chief executive Michael Johns.
Priestley said: “The idea is that we do not want to reinvent the wheel. For instance, we can learn a lot from how Defence Estates is training project sponsors – what worked and what didn’t.”
Despite the closer co-ordination inaugurated by Concordat, the parties to the agreement were at pains to point out its limits. For example, Priestley pointed out that the NHS will not be moving wholesale to Defence Estates procurement methods, such as prime contracting or Defcon 2000. “Defence Estates will not inform us in detail,” she said.
She said that suppliers that are not already involved with the Defence Estates initiative should not worry that they will be sidelined by NHS Estates. Defence Estates chief executive Ian Andrews said that the organisations had been talking to each other about procurement for about a year. “We have closely aligned thinking and employ staff from similar [non-construction] backgrounds. So there is a lot we can share,” he said. Andrews also pointed out that the agreement stopped short of integrated procurement.
We do not want to reinvent the wheel. We can learn a lot from Defence Estates
The differences in each client’s requirements meant that each would have separate supply chains, he said.
Andrews added that his organisation was hoping to learn from the NHS’ approach to benchmarking and performance measurement.
“They’re ahead of us on that,” he said.
Priestley was due to launch a new procurement strategy, Procure 21, with Sir John Egan this week. However, this has been postponed until the new year.
Priestley said: “Procure 21 is a proposed framework for how NHS Estates will implement Achieving Excellence [the Treasury’s model for public procurement techniques]. It will look at how the NHS can become a better construction client and how suppliers can become part of a better supply chain.”
Priestley also confirmed that all government client bodies will be using only three procurement routes in future. She explained that the Office of Government Commerce, to be formed from the Treasury next year, will advocate a standardised private finance initiative form, prime contracting and a design-and-build contract based on the GC Works contract.
The Office of Government Commerce, which will absorb the government’s Procurement Practice Division, will provide advice on public procurement.