Presentation to Construction Project Management Conference Reviewing the OGCs Achieving Excellence Guidance

18 February 2010 Jon de Souza

Our purpose is to

Improve industry performance

The outcome will be

A demonstrably better built environment

1994

1998

2001

2003

2005

2006

DBF
CRISP

National Platform

The Egan Decade

The Egan vision for change

5 - Key Drivers for Change
Committed leadership
Product

4 - Key Project Processes

Partnering the supply chain

7 - Targets for Improvement

Capital cost Construction time Predictability Defects
-10% -10% +20% -20% -20% +10% +10%

Focus on the customer Product Team Integration Quality driven agenda Commitment to people

development

Project implementation

Production of components

Accidents Productivity Turnover & profits

UK Construction Key Performance Indicators A Measured Approach

Economic Client satisfaction
Product and service

Defects Predictability
Cost and Time

Profitability Productivity Safety Construction Cost Construction Time

Egan comparisons
(2000 2008)

Egan Target
Target Construction cost Construction time
-10% -10%

2008
Actual 4% 8% 49% 45% 73% 865 46k 9.6% %
+0.5% +1% 0% +6% -2% -5% +7% +10%

-57% -57% 100% 100% 100% 213 58k 9.4%

Predictability cost +20% Predictability time +20% Defects Accidents Productivity Profit
-20% -20% +10% +10%

Never Waste a Good Crisis

Or A little less conversation, a lot more action please

Never Waste a Good Crisis

Review of progress since Egan The review asked... Is the agenda still relevant? Barriers to progress identified Business and Economic Models Capability Delivery Model Industry Structure

100

150

200

250

50

0
Client C lie n tS a tSatisfaction P ro d u ct Product Client C le n tS a tSatisfaction S e rvice Service Defects Impact at D e fe cts Handover

CE 2009

Predictability P ro je ct 1 Cost

P re d C o st-

Economic KPIs

Predictability P ro je ct 1 Time

P re d T im e -

Industry 2009 = 100

P ro fita b ility 2 Profitability

P ro d (C u rre n t) (Current

Productivity Values)

Demonstration v Industry 2009

P ro d (C o n sta n t) Productivity
(Constant 3 2000 Values)

Demonstration v Industry 2009

CE 2009 Industry 2009 = 100

People and Environment KPIs

450 400 350 300 250 200 150 100 50 0

Safety Overall

Saf et yOverall 4

Safety - All Projects

Saf et y-A ll p ro ject s 4

Emp Sat

St af f T/ O

Q&S

EnvImp -

EnvImp -

Employee Staff Turnover - Qualifications & Skills Satisfaction All Projects

Pro d uct Pro cess Environmental Environmental Impact Impact Product Construction Process

2009 Demonstrations outperform the industry by an average of 80%

OGC guidance
Achieving Excellence in Construction (AEC):
Initially drafted in 2002 Guidance to public sector clients on how to better procure and deliver construction Promoting the lessons of the Egan/improvement agendas Initial OGC review of the Guidance in 2008 Constructing Excellence engaged in March 2009 to lead process of redrafting and updating of this Guidance

OGC guidance
Achieving Excellence in Construction (AEC):
1. Initiative into Action 2. Project Organisation 3. Project Procurement Lifecycle 4. Risk and Value Management 5. The Integrated Project Team 6. Procurement and Contract Strategies 7. Whole-Life costing 8. Improving performance 9. Design Quality 10.Health and Safety 11.Sustainability

OGC guidance review

What we did
Initial discussions with OGC regarding expectations for review Initial review of existing guidance with key stakeholders Determining new structure for guidance Rewriting of guidance Identification of new case studies for amended content Second consultation with wider stakeholder group

OGC guidance review

Initial conclusions
The industry (and client knowledge) had moved on substantially since the guidance was first drafted especially in:
Sustainability Health and safety

The refreshed guidance should align with other industry targets and best practice But retain existing headings as these have become well known across the public sector

Construction Commitments and Strategic Forum targets to 2012

Procurement and integration Commitment to people Client leadership Design quality Sustainability Health and safety

The Clients Commitments

OGC guidance review

Outcomes
Refreshed guidance aligned with the Construction and Client Commitments New case studies Areas considered in more depth within the guidance:
Collaborative procurement Resource efficiency Client health and safety responsibility (CDM2007) Building Information Modelling Use of lean techniques

Guidance designed to add value to both frequent informed and occasional clients and their supply chains

Influencing behaviour of construction clients

Frequent

Intelligent Clients

Occasional Inexperienced Experienced

OGC guidance review

Key lessons
Acceptance within OGC that traditional lowest cost procurement does not provide best value More work needs to be done to promote fair payment practices down the supply chain While some Government clients are excellent procurers of construction, others still resort to lowest cost tendering There should be a method for assessing Government client performance

Economic climate change

Revert to type Long tender lists Lowest tender price Claims Cost and time overruns Abandon sustainability Shed people

No turning back Best value/real value Collaborative working Target price plus lean Delivery to all KPI targets Sustainability remains key driver Retain good people however possible

Maturity matrix
Developed from NAO maturity matrix 55 questions with 4 levels of maturity under the 6 headings of the Construction Commitments:
Client Leadership Procurement and Integration Design Quality Commitment to People Sustainability Health and safety

Applicable to different roles

Funders, procurers, deliverers Centralised vs. devolved Departments End users and suppliers able to provide views too

St Francis of Assisi Academy, Liverpool Green values help academy top new league table
A school which offers its pupils a green-focused education has won plaudits for having the best teaching standards in the country. The Independent, 11 Jan 2007
The excellent GCSE results and the fact that our students finished top of the national league tables for progress can rightly be attributed to the impact the building had on their studies

BDP

Thank you for listening !

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