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Southwark Partnering Adviser It’s not often a commission comes along that really allows the depth and breadth of skills required by a ‘partnering adviser’ to be exemplified. However, to our delight, we have been appointed to work alongside Southwark Council’s Housing Asset Management team as their Partnering Adviser for their ‘Major Works’ programme to upgrade their housing stock. The programme itself involves working with 5 appointed contractors who cover different areas - with varying levels of partnering experience. We are therefore working closely with the client to develop not only the processes & procedures required for the effective running of the contract, but also, developing training schedules to ensure that the needs of all participants are met dependent upon their individual experience. There is much more exciting work to come throughout the life of this contract including supply chain development and a partnering overlay agreement - we will update you with best practice in the coming months. As this commission is bringing together the ‘hard’ and ‘soft’ sides of partnering together very effectively, both Neil and Karen will be working with the client and their contractors. For more information on the contractual and technical elements of this commission, please contact Neil and for the training elements, please contact Karen on 01732 897766.
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Catalyst Housing Group - Procurement of M&E Contractors We are pleased to continue our role as Procurement Advisers to the Catalyst Housing Group and in particular, for the Group Asset Management Team. We are now procuring contractors to undertake M&E related works including the installation of new heating installations, electrical re-wiring, door entryphone systems and other associated works. Pre-qualification questionnaires are available from tenders@cameron-consulting.co.uk. Contracts will be awarded under the Term Partnering Contract TPC2005 (Amended 2008) and will commence in April 2011.
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Business Continuity for SMEs Over the Easter holidays we took the family away to Cyprus for a short break. Before we set off, we made arrangements for holiday cover and ensured that critical pieces of work were complete and clients informed of our whereabouts. In addition, we made sure that we had every conceivable mobile device with us whilst away, including dongles, iPhones, and laptops, in case of emergency. We then set off to Cyprus safe in the knowledge that we had everything covered and we could now relax! Or so we thought... On 15th April, news broke of the flight restrictions across Europe caused by the volcanic ash cloud. We were due to return on 16th April! As Business Owners of a SME we simply couldn’t afford to be away longer than our planned vacation. We therefore decided to set about making our return home (2 adults, 2 children under 7 and lots of luggage)! On Sunday, we flew to Athens, about the only place you could get a flight to from Cyprus. On Monday, we drove 150 miles across Greece to Patras, a port on the Western coast where we caught an overnight ferry to Ancona in Italy. Once in mainland Europe we continued our journey by car, taking two days through some of the most beautiful sights in Europe. We managed to see the Acropolis in Athens, Lake Como in Italy and Lake Lucerne in Switzerland. All a wonderful cultural and character building experience, but alas, no business! So what have we learned from our experience? SMEs find it difficult at the best of times, but when something unexpected happens, it can be business critical and the effects can be massive. We have a great team, but tacit knowledge simply can’t be transferred quickly and with the same efficiency as the knowledge holder. Therefore, we have learnt the following important things to do to prevent the risk of downtime during times of crisis:- Effective Planning - It may be obvious, but effective holiday planning is important to ensure that key staff are not off at the same time; Mobile/Home Working Solutions - These days it is possible to work anywhere in the world and still access business files. The use of a virtual private network (VPN), remote desktop, as well as mobile devices including phones and other devices make it possible to be in contact all the time. Whilst it may be nice to turn everything off when on holiday, the fact remains that half an hour spent responding to emails every day will save at least a day when you get back. It will also highlight to your client how important you consider them to be that you have taken time to deal with something whilst away; Set up reciprocal arrangements with partner organisations - Use your extended supply chain to step in when you are not around. The RICS for example, have a ‘locum’ service, much like a GP, so that when you are not available, you can have a nominated peer to deal with your workload when you are away. Because the locum is a professional and governed by the RICS, you will receive a professional service; Build capacity within the team - Use opportunities to upskill other members of the team and transfer skills and knowledge so that important functions can be undertaken competently in your absence. We have developed our own Business Continuity Plan adopting all of the above. Whilst SME businesses can be put under great pressure during times of crisis, they are also extremely flexible and responsive to client needs, much more so that larger organisations. As a footnote to this article, our tender proposals for the Southwark Partnering Adviser tender mentioned above was prepared over a few evenings in Cyprus, on a macbook pro and submitted by email on the hotel’s wi-fi network!
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Neil Thody becomes MCIPS (Member of the Chartered Institute of Purchasing & Supply) In April 2010, Neil Thody became a full member (MCIPS) of the Chartered Institute of Purchasing and Supply having successfully qualified through the Management Entry Route (MER). Neil is delighted to have attained this important qualification, stating ‘The purchasing function within organisations has become increasingly important, particularly in the public sector where cash is limited and efficiency is paramount. Achieving MCIPS adds greater credibility to the procurement services we offer and through structured continuing professional development (CPD) we will continue to be at the forefront of procurement related consultancy.’
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e-tendering portal to launch in Autumn 2010 Cameron Tenders, a new online e-tendering portal is set to launch in Autumn 2010. With the future of the OGC now under the newly formed Efficiency and Reform Group (ERG) and Sir Peter Gershon sitting on the new board, what is more than likely is that procurement will continue to become more efficient with online resources and tools being at the forefront of innovation. In response to client demand and a need for greater efficiency in the way in which we undertake procurement, we have designed and developed an online e-tendering tool that will manage the entire procurement process from start to finish, on both EU and non-EU tenders. Where pre-qualification is required, Cameron Tenders will include an online questionnaire and evaluation tool. Legal support from one of the country’s leading procurement specialists will also be available. Cameron Tenders is being developed jointly between Cameron Consulting and Nomis Ltd. For further information, please contact sarah.rae@cameron-consulting.co.uk.
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Using site visits and interviews as an evaluation tool Increasingly, clients are using interviews and site visits to support decision making in the selection process before appointing a suitable provider. Typically, these processes are in place at the Invitation to Tender (ITT) stage and are most commonly conducted after the return of tenders and in particular, to support the evaluation of written proposals provider by the bidder. This of course is only really relevant on procurements that are conducted adopting MEAT criteria (most economically advantageous tenders) whereby the bidder’s quality proposals are further assessed by interview and/or site visit. Most importantly, the use of site visits and interviews should only be used to clarify and confirm the bidder’s written proposals and not introduce any new criteria to be assessed that wasn’t identified within the ITT. Indeed, in the case between Harmon and the House of Commons (2002) the judge ruled that prior qualification relating to technical capacity should not be revisited at ITT stage unless facts regarding the bidder had occurred since qualification that were ‘not apparent or not reasonably discoverable’. In practice however, it would be perfectly permissible to review a qualification decision prior to award, particularly regarding such matters as financial standing or taking into consideration a failed project. Firstly it is worth considering what value an interview and/or site visit may add to the selection process. Put simply, we often refer to this as the Ronseal® Test, i.e. ‘Do they do what they say on the tin?’ The important aspect here is to gather further information and evidence through site based or interview assessment to verify the bidder’s written proposals. The interview and site visit should only be forward looking and must relate directly to the criteria within the ITT and not new criteria. Under no circumstances should the interview or site visit be used to assess previous experience or information already assessed at PQQ Stage. In other words, any aspects previously assessed should not be assessed again and to a degree, this is one of the criticisms of using interview and site visits in particular, whereby, a visit to site in most circumstances provided evidence of a current or past state and not one in which the bidder may be proposing as part of their submission. Therefore, the criteria to assess at both interview and site visit must be clearly set out. The other consideration at interview/site visit is the involvement of stakeholders in the selection process. We have previously advised upon the need to have competent persons involved in evaluation (see Summer 2009 newsletter at http://www.cameron-consulting.co.uk/consulting/news2009.html) and again, with the increasing involvement of stakeholders in decision making, it is essential that they are provided with the necessary skills to undertake assessment. We enable this through our Helping HANDS® programme of Stakeholder Engagement. Turning to the site visit or interview itself. The simplest approach is to undertake a comprehensive review of the written proposals in the first instance and in doing so, highlight a number of areas which may require further clarification. This can be done by jotting down a series of questions or notes that are bespoke to each bidder’s response. Then, only those questions are probed further at interview or site visit. The written proposal is provided with a provisional score and then, dependant upon the findings/responses at site visit/interview, the provisional score is verified and marked up or down accordingly. This approach, if properly documented, provides a clear audit trail indicating the impact of the site visit/interview on the overall assessment. In addition, it is useful to have an adjudication process in place, particularly where there is a team of evaluators undertaking the evaluation. We have never really favoured the approach whereby scores are aggregated. In fact, the Procurement Consultant can play a very useful role in acting as ‘Adjudicator’ to review the collective scores and then through discussion, arrive at scores by consensus. Inevitably, much paperwork is required, together with complex scoring sheets to document the process. This is necessary, particularly under the New Remedies Directive whereby comprehensive feedback is required to be provided to all bidders at Contract Award stage. For further information on developing appropriate procurement strategies and evaluation methodologies please contact neil.thody@cameron-consulting.co.uk.
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Sustainable Asset Management in the Affordable Housing Sector The current economic climate and ongoing budget reductions in central government are having a significant effect on the affordable housing sector, ranging from the cost and availability of commercial funding for RLOs, the £220 million reduction in the HCA’s budget and the general reduction of Local Authority grant, right down to the financial circumstances of individual tenants and leaseholders. Clearly, significant cost savings will need to be achieved, not just for this year but also for the foreseeable future. In the case of new build, matters are, in principle, relatively straightforward although admittedly harsh - new houses and flats can only be built if funding is available. In practice, however, things are clearly not that simple and many currently stalled projects have already had significant sums invested in design, enabling and infrastructure works. Careful consideration of such schemes is therefore necessary to avoid wasting the investment already made. The situation for existing property portfolios is somewhat more complicated in that existing housing assets need to be effectively managed and residents have a genuine expectation that their home should be maintained to a reasonable standard. In addition, following the huge sums of money invested in Decent Homes, allowing the affordable housing stock to slide back into a state of disrepair is surely politically unthinkable. Faced with such significant challenges, sustainability, in its wider financial, social and environmental contexts is more important than ever and needs to be core to both strategic and operational planning. From a strategic asset management perspective, the key therefore is to determine a sustainable business model which incorporates the current condition of the stock, future physical, social and environmental needs, the resources available, or potentially available and how they can best be implemented to meet those needs. Accurate forecasting of maintenance requirements at the operational level, incorporating robust full-life costing, is critical to achieving best value overall. This needs to factor in all costs, including future maintenance, operating and energy costs, and ultimate disposal so that budgets can be properly programmed. Whilst some degree of lifecycle costing is normally utilised for significant elements - for example window replacement - this has generally been on a fairly adhoc basis and has been limited to direct replacement versus repair cost considerations rather than a holistic sustainability basis. There are clear advantages to developing a more comprehensive and robust approach which can be used to provide more detailed data on the overall sustainability of proposed solutions, particularly if this is done using a common format in order to allow comparison of similar exercises across the entire property portfolio and sharing of data with other similar organisations. Utilisation of BS ISO 15686-5:2008 (Buildings and Constructed Assets. Service Life Planning. Lifecycle Costing), would offer such benefits, particularly when used in conjunction with the BRE Green Book. Operational programming must also recognise opportunities for combining projects to achieve savings in respect of access, site and preliminaries costs which can form the major cost element of many schemes. Properties should be categorised on the basis of the minimum necessary maintenance cycle, usually determined by external decorations. It is critical that all works other than urgent defects are retained within the identified maintenance cycle and that works with a longer cycle, for example re-roofing are aligned with this cycle. In addition to achieving direct cost savings, this process also substantially reduces the risk of leaseholder challenges as a result of extensive works, requiring substantial scaffolding and site setup costs, being undertaken at higher frequencies than should be necessary. On a strategic level, procurement planning is significant in determining how available funds are used and inevitably, the debate over whether partnering or traditional tendering is better will no doubt have re-ignited in many organisations. It is 12 years since the Egan Report were published and partnering is now an established practice rather than theory, with many experienced service providers delivering significantly improved levels of service and efficiency. It is therefore possible to examine the benefits achieved by other similar organisations and to gain direct operational insight when considering entering into a partnered procurement route. In the current environment, the clear driver is to stretch the available budget as far as possible and traditional tendering will be seen as a way of achieving this. There are significant risks in this approach, however, all of which stem from the fact that many contractors will be tempted to submit tenders that are either at cost or below. Obviously this is unsustainable and presents significant risk to the contractor’s business viability, which in turn leads to a risk of the project itself being halted due to insolvency during the delivery phase. In this event, there are clearly significant costs to the client in terms of delays whilst procuring an alternative contractor, additional internal and external professional resource costs and the likelihood that the new contractors costs will be higher than the original tenderer. Alternatively, the contractor faces huge pressure to claw back costs in terms of variations and claims. As a result, not only is the final delivery cost higher than the tender cost but significant time and cost resources are required to fight spurious claims. Given the current reductions in public spending on construction this situation is certainly going to become worse. In the next newsletter, part 2 of this article will follow which will set out ways to overcome some of the challenges of current tendering.
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Disclosure - How much is too much? The recent judgement in the Croft House Care Ltd and others v Durham County Council case highlights only too well the need for clear and transparent procurement processes - particularly during the evaluation stage. This article sets out what happened when Durham County Council ran a procurement for the provision of domestic care service. In February 2009, Durham Council Council were going to award the contract - the decision was however challenged and they did not go on to make the award. Instead Durham Council Council re-ran interviews and changed the basis on which the evaluation of tenders was to be carried out. Following this interview ‘re-run’, three of the tenderers were each awarded less work than the February 2009 award letter had suggested - or no work at all. The 3 care providers subsequently issued proceedings against the council. A hearing was arranged to consider disclosure in the case. The council believed and subsequently argued during the case that they had identified two types of documents which should not be disclosed or should not be disclosed in full:-
In relation to the first category of documents (the bids of other tenderers), the court found the relevant sections of the bids of other tenderers must be disclosed following the redaction of information identifying the tenderer or which was not necessary for the claimants to give instructions to their solicitors. The court emphasised none of the bidders had marked their bids as confidential. Pricing information contained in the bids did not need to be disclosed. However, information in method statements or relating to technical capacity went directly to the claimants’ case and were therefore classed as disclosable. In terms of the second category for non-disclosure - Material - including model answers to interview questions - the court placed little weight on the council’s argument that disclosure of such material would render a re-run of the procurement very difficult, and any future tenders indistinguishable. Even more interestingly, the court also rejected the council’s proposal of a ‘confidentiality ring’. It ruled instead documents should be made available only in the presence of solicitors with no copies provided or notes to be taken. What this means for clients Therefore, during the procurement process, clients must be fully satisfied that all prepared documentation, such as model answers described in this case, are available at an early stage. In our opinion, clients should examine thoroughly whether such documents are necessary for example:-
The legality of not disclosing documents with the ITT has not yet been fully tested, what is clear however, is that in a challenge, they will be disclosable. What can you do to ensure your processes and procedures are compliant?
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Moat | Apollo - Open Book 10/11 Following on from our recent work with the partnering relationship between Moat and Apollo, we have been appointed to carry out the Open Book reviews moving forward. This is a real testament to the team who worked on this project. Of course the initial focus was to re-build the relationships, but subsequently we have taken on the role of ‘partnering adviser’ ensuring that the ethos and requirements of the PPC2000 contract were being adhered to. Their request for us to continue with the Open Book process shows how robust, transparent and valid our Open Book Methodology remains. If you need assistance understanding/interpreting Open Book, please contact Neil on 01732 89776. “The ongoing scheme that we have with Moat was losing its way a little and we jointly agreed that the partnership needed to be both re-energised and re-focused. To this end we brought Cameron Consulting on board to carry out a series of Partnering Workshops and Open Book exercises. Karen, Neil and their team have reviewed the way things were working and have started to realign the processes and procedures to the benefits of all stakeholders. We are not at the end of the road yet, but everyone involved is now far happier that matters are moving in the right direction and we are confident that the partnership goals of both Moat and ourselves will be met going forward.”
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Procurement of ‘Modernisations in Occupation’ for Saxon Weald Homes We are delighted to announce that we have been instructed by Saxon Weald Homes in conjunction with Rubicon Wigzell to assist them in the procurement of contractors to deliver their ‘Modernisations in Occupation’ programme of works. This is a short term contract (over 2 years) to deliver their investment programme comprising mainly kitchen and bathroom renewals. In the long term, Saxon Weald are developing their in-house team, ‘Homefix’ to deliver these works in the future. Whilst this is a Below-OJEU procurement exercise, Cameron Consulting will be adopting best practice procurement methodologies for contractor selection. This also signifies the strength of an existing relationship with Rubicon Wigzell who are working on the lean elements of this procurement.
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Catalyst Housing Group - Procurement of Consultants Following the re-structuring of the Asset Management Team within Catalyst Housing Group, we have worked with the Head of Asset Management in developing a Group wide procurement strategy for delivering planned maintenance programmes of work across the Groups various companies, comprising Catalyst Communities Housing Association, Kensington Housing Trust and Fortunegate Community Housing. This involves the re-procurement of a range of construction related programmes of work. Contract Notices for the selection of Consultants were issued Mid March with remaining services following on shortly thereafter. If you wish further information on any aspect of this, please contact linda.northridge@cameron-consulting.co.uk.
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Environmentally Aware We are delighted to announce that following a recent inspection by BSI, Cameron Consulting has achieved the Environmental Standard ISO14001. The certification relates to all of our business activities in the delivery of management and construction related consultancy and training services. We are committed to delivering environmentally sound services and practices to our customers and indeed to the community in which we work.
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Building Bright Ideas Returns We recognise that it can sometimes be difficult to share best practice and have been running our ‘Building Bright Ideas’ seminars to great effect for our consultant partners - so we got to thinking! Why are we not running an event for clients? The main purpose will be to share best practice; debate and learn. We will be inviting guest speakers to highlight current issues and using our successful ‘knowledge café’ format, we will be dedicating most of the time to discussion and solutions generation. We hope you can join us - the date is to be confirmed, but the venue will be central London. To register your interest and be sure to get one of the first invitations to this exclusive event, please click here.
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Helping HANDS builds on earlier successes Catalyst Housing Group (CHG) are currently re-procuring their Repairs and Maintenance contract. There is a large group of residents who wish to be involved in the exercise. The difficulty with ‘stakeholder involvement’ is always around expertise and subsequent training and whether it is actually ‘right’ that they are involved in evaluations. In CHG, residents have only been involved in agreeing which elements of the service are truly valuable, which elements could perhaps require review or enhancing but most importantly, they have only been invited to score on those elements where they really can add value i.e non technical/legal aspects. This approach has been met with much praise and the approach can be applied to a wide variety of stakeholder led situations, not just contract re-procurement. If you wish to find out more about how the Helping HANDS programme can assist with stakeholder engagement in your organisation, please click here.
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Launch of ‘Keeping Promises’ We are all great at involving stakeholders at the beginning of processes - but how do we ensure their needs are being met further down the line? Keeping Promises is an innovative programme designed to assess whether or not promises made - particularly during the tender period - are actually being delivered further down the line. This has already been used to great effect in Nottingham City Homes where the Resident Participation Group reviewed a series of items that their contractors had ‘promised’ during tender for example, Key Performance Indicators; Use of Identification; Resident Involvement; Training and Development - on other words, those ‘value added’ items which are often difficult to assess contractually. The outcomes are enlightening to say the least and something we will be sharing in a Case Study soon. If you would like to be one of the first to receive the case study, or just to chat through how ‘Keeping Promises’ could benefit your organisation, please click here.
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Pathways 2 Progress (P2P) Really Moves On Throughout our working relationship with Kensington Housing Trust, we have been privileged enough to work with a group of contractors who have agreed to participate in the innovative ‘P2P’ programme. P2P is a programme designed to support to 13-19 year olds living in the Royal Borough of Kensington and Chelsea. Their outstanding mentoring scheme has been helping hundreds of children and young people to find new interests, develop their talents, and fulfil their potential. The objective of P2P is to engage young people who are at risk of crime and anti-social behaviour, experiencing social exclusion or deemed first-time non-violent offenders. In addition to mentoring, there was a keenness of the participants to gain ‘work experience’. In the current climate, getting any job is difficult - so imagine how difficult it would be to get one with potentially little or no experience of work, or perhaps a criminal record? The contractors taking on P2P participants are doing so for a 12 week programme initially. Those participants undertaking work experience have been given job descriptions, are being ‘interviewed’ for the position and of course regular review will take place as well. We will bring you a full case study on this in the next newsletter - in the meantime, we wish the contractors involved and their ‘trainees’ the very best of luck! “Young people involved in our young engagement programme, Pathways 2 Progress, now have the chance of gaining much needed work experience thanks to the strong links Cameron Consulting have helped us forge with our maintenance contractors. Karen’s personal commitment to our aims has meant that a number of young people will get their first experience of work and will hopefully go on to get the skills they need to be a success.”
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Pricing Strategies for Term Maintenance Contracts - Part 2 For those of you expecting Part 2 of our best practice article on ‘Pricing Strategies for Term Maintenance Contracts’ in our Winter Newsletter, I apologise. So much has been going on in the industry, particularly around pricing, largely caused by extremely competitive market conditions, that we considered it more appropriate to defer Part 2 so that we could incorporate current thinking into this article. In Part 1, we discussed Schedule of Rates, Open Book and Cost Plus pricing mechanisms. In this issue we are going to focus on the following:-
Fixed Price - This type of pricing mechanism is particularly effective where the scope of work is clearly defined, the condition of the asset is known and where the transfer of risk to the contractor is not too great to render pricing unrealistic or unsustainable. Fixed price by its nature requires the contractor to provide a fixed price for the delivery of services where the risk of delivering the service is completely transferred to the contractor. The Contractor will undertake the work for the fixed price, regardless of the cost. Typically, fixed price contracts have been used in term based contracts for services such as gas servicing and maintenance, most commonly referred to in the industry as a “3* comprehensive service”. Under these contracts, the contractor warrants to service, maintain and repair gas appliances for a fixed annual charge. Increasingly, these types of contract are being used on other term contracts such as day to day repairs and maintenance and void repairs. The problem is that in order to arrive at a reasonable fixed price, the contractor needs to have good asset information such as historical data on repairs spend, the frequency and nature of repairs and stock condition information. For more complex term contracts, a period of delivering the service under a more traditional pricing mechanism is usual, before moving towards fixed price. On the plus side, once the fixed price has been established, it can offer major advantages in terms of cost certainty for the client and improved efficiency through reduced administration. Target Cost - This is where the contractor and client agree to work to a ‘target cost’ for the delivery of a task(s) or project. The target cost could be built up either on an ‘open book’ basis or the use of some other form of pricing mechanism such as a schedule of rates. When the task(s) is complete the ‘actual cost’ of undertaking the task is calculated on an ‘open book’ basis. Essentially, the difference between the actual cost and the target cost is then subject to a pain/gain share mechanism. Therefore, in simple terms if the actual cost is less than the target cost, then the client and contractor agree to share the saving (gain) at the pre-determined allocations. Equally, if the actual cost exceeds the target cost, then the client and contractor agree to share the loss (pain). This type of price mechanism is more appropriate on term contracts where the task is more complex or of a higher value, such as the installation of a kitchen or bathroom. The advantage of using ‘target costing’ during the delivery of the term programme can reduce administration and focus the team on delivering the work and improving efficiency. If linked with a pain/gain mechanism, there can be considerable advantages by incentivising the contractor to save costs, yet realise financial benefits of doing so. Hybrid Pricing - This is largely what it says, i.e. a combination of different pricing mechanisms. Essentially, the pricing mechanisms used within a hybrid arrangement will depend on the nature of the work and the balance of risk. For example, on a contract for day to day repairs and voids, it might be possible to utilise a variable pricing mechanism for day to day repairs such as a schedule of rates and a fixed pricing mechanism for void repairs. The combination of different pricing mechanisms needs to be complementary and easy to administer. Therefore, different cost heads for on-costs such as site overheads, central office overheads and profit, need to be consistent across different pricing mechanisms. Hybrid pricing can also be used when a phased transition to a new price mechanism is anticipated. For example, a fixed price mechanism can be used from the start of the contract for certain elements, with other elements, subject to, say, a schedule of rates, with a view to moving to fixed price later on. Ultimately the choice of pricing mechanism to use on term based contracts will depend on a number of factors including: risk, client budget, condition of asset and market conditions. Of most significance at the moment is ‘market conditions’. Whilst clients may be keen to take advantage of a competitive environment by market testing their term contracts, by their very nature, term contracts are generally longer term (minimum of 3 years usually). Therefore, it is important that contracts entered into now are sustainable and are not designed to take short term benefits, which from experience suggests that the long term will be affected. It is also worth considering the type of contract that best supports different pricing mechanisms. Both the Term Partnering Contract (TPC2005) and the NEC3 Term Service Contract are extremely flexible in how pricing frameworks can be used on term based contracts. Finally, we are delighted to offer training seminars on Pricing Strategies and Open Book methodologies. Our training sessions can be tailored to your specific needs whether you are a client, consultant or contractor seeking a greater understanding of the key issues. If you are interested, in any of the training we have to offer, then please click here to register your interest.
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EU Remedies Directive - Impact on administration and processes! Since the introduction of the New Remedies Directive on 20 December 2009 many industry commentators have been focussed on the impact on new procurements started after this date. In particular, the focus has been on the latter stages of procurement at award stage and the new requirements around de-briefing and the statutory standstill period. But what about the earlier stages of procurement? What is the impact, from a practical perspective at pre-qualification stage? We have now concluded the first stage of procurement under the Restricted Procedure under the new Directive with completion of the pre-qualification stage and shortlisting for tender. Like most people involved in procurement, we have read the Directive and the guidance from OGC and tried to understand how this will affect all new procurement activity. But alas, research as we may, there is very little guidance on what to do at pre-qualification stage. Under the old rules, for example, there was no requirement to provide feedback to bidders that failed at PQQ stage, but at contract award stage, all bidders had to be notified of the results. Under the new rules, only economic operators need to be notified of the tender results and importantly, provided a full debrief. Economic operators are only those who have been invited to tender and do not include those who failed at PQQ stage. Therefore, whilst Economic Operators (tenderers) are afforded comprehensive feedback via a written de-brief at contract award stage, what happens to all of those who failed at PQQ stage? At Cameron Consulting, we have always provided notification to bidders who failed at PQQ stage, even under the old rules, quite often providing them with their score and that of the lowest qualifying bidder. When asked for further feedback from a bidder, we would give structured telephone feedback which whilst never good news for a bidder, was always gratefully received. When considering the new rules and the apparent silence on the matter of feedback at PQQ stage, it is perhaps appropriate to apply some logic to what should be done. Given that the new rules require that a de-brief should outline the relative advantages of the winning bid over that of the economic operator, then it follows that this should also be the case at PQQ stage. Therefore, at PQQ stage, we now provide a full written de-brief to all unsuccessful bidders, outlining why their bid was unsuccessful against each section of the PQQ. This is helpful to the bidder and will give them useful feedback on how to approach future procurement, but most importantly, reduces the potential risk to the client of a challenge from an unsuccessful bidder. Of course, adopting this approach takes time and will increase the administration and cost of procurement. However, this type of best practice is surely a price worth paying if it helps to avoid costly challenges and disputes. By the time our next newsletter (Summer) is published, we would have concluded our first procurement under the new Directive and hope to report on our practical experiences at the latter stages of the procurement process. Neil Thody is a Fellow of the RICS and a Procurement Specialist, having procured over £1bn of contracts in the Public Sector. Neil works closely with leading Legal Advisers to ensure that best practice in procurement is applied in contracts he advises on. For further advice on the impact of the New Remedies Directive or to discuss your procurement needs, please contact neil.thody@cameron-consulting.co.uk.
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H&S corporate manslaughter sentences and fines - have you considered the impact? Recently published guidance for judges sentencing companies guilty of corporate manslaughter - or breach of health & safety legislation which has contributed to work related death - came into force February 2010. They apply to all cases heard by the courts irrespective of the date on which the offence occurred. The guidance issued by the Sentencing Guidelines Council, is set to significantly increase the penalties imposed. Have you considered the impact of these guidelines on your internal procedures? Have you made your internal checks more robust? How can clients be sure that they have appointed a main contractor who is not only aware or these changes, but that there processes and their execution are faultless? For more information and background to these changes, please download the PDF article here.
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ISO9001/14001 - Are your providers credentials UKAS accredited? What would you do if you realised your appointed contractors had not achieved ISO9001 or 14001 through an accredited body? Would you worry if their Quality Systems did not marry up with the expectations of an UKAS accredited assessing body? What are the impacts for contractors who have what they believe to be an accredited provider of certification, only to later identify that their certification is worth nothing in a Pre-Qualification exercise? Set out following are a few pieces of information which may help you decide what to do:-
United Kingdom Accreditation Service (UKAS)
Making the grade - Contractors
To answer the questions posed above, we have set out a Q&A Knowledgebase article - to request your copy click here.
Checking the certification - Clients
The certification is not valid - what can I do? The most important message to take from this as a client is that not all certificates are the same! Why should you accept a supplier as having ISO9001 or ISO14001 from a non-accredited body - what recompense do you have if their system fails? If you wish to learn more about our approach to dealing with this issue at Pre-Qualification phase, please click here to request further information about common evaluation methodology pitfalls and best practice concerning standard certification (including the use of values within constructionline and evaluation of financial risk)
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Nuneaton & Bedworth Borough Council - Building Capacity Following on from our recent appointment in the procurement of NBBC’s Kitchen & Bathroom programme, we are delighted to also support them in the re-procurement of their gas servicing contract. One of the key aspects of this commission is about ‘Building Capacity’ within the client organisation. Our approach is a ‘light touch’ solution where we provide training as we deliver the project to transfer key skills and competencies to the client team to assist them in undertaking their own procurement in the future. Capacity Building is of benefit to both client and consultant and certainly offers a more cost effective solution to many procurement projects. If you would like to talk to us about how we can help you develop your internal capability, please call Sarah on 01732 897766.
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Brunel University - Procurement of Consultants We were recently appointed to support Brunel University procure a Project Manager to manage the delivery of their prestigious new Eastern Gateway project, housing the new business school of the University. In addition, we are also assisting the University in managing the procurement and selection of consultants to deliver a wide range of construction projects on the site.
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CEDR Accredited Mediator In December 2009, Neil Thody became a CEDR accredited mediator through the Centre for Effective Dispute Resolution. As a result, we now offer alternative dispute resolution services through our new division, Cameron Solve.
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IOSH Health & Safety Linda Northridge is now an accredited member of the Institution of Occupational Health and Safety (IOSH). Not only will this be of benefit internally in terms of managing Health and Safety within the workplace, but also, Linda has expressed an interest in assisting with the compilation and evaluation of Health & Safety questionnaires – something which most of you reading will agree do not always reflect current best practice. Additionally, she will be able to offer guidance and assistance with documentation and Linda will be conducting some market testing with a variety of contractors and clients to identify what is truly important to them when evaluating and promoting Health & Safety in the workplace. If you would like to discuss anything with her, please call Linda on 01732 897766.
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Brighton Conference This years CIH South East Conference is 2nd – 4th March at the Hilton Metropole in Brighton. For those of you who experienced the frustration of the ‘chocolate pebble’ competition, I’m sure you know how difficult it has been to maintain a sense of excitement about this year’s competition! Our theme at conference this year is ‘offering traditional values with innovative solutions’ and I think when you come and see us on Stand 5, you may well just understand exactly what we mean! We have a number of passes for conference this year and if you would like one, please e-mail info@cameron-consulting.co.uk requesting a pass with your contact details and we’ll do our level best to get one to you.
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The role of the Partnering Adviser as Mediator As the use of partnering contracts and in particular, PPC2000 and TPC2005 become more mature and commonplace, it is inevitable that they will be subject to potential dispute. Indeed, the current economic climate is a potential contributory factor in testing the resolve of partnering team members, particularly around the issue of value for money. We are also experiencing tensions often exhibited by clients, where they entered into long term partnering contracts when the market was buoyant and now, where the market is more competitive, are seeking exit strategies to enable them to exploit potential cost savings by re-procuring contracts. From a contractor’s perspective, the current climate drives low margin tendering, almost reverting to the old days of compulsive competitive tendering (CCT) whereby low margin tendering resulted in a claims culture once a contract was awarded. Of course, both the client and contractor view in these scenarios go against the spirit of partnering and the long-term benefits of such arrangements. However, such culture is giving rise to potential conflict and it is here where the Partnering Adviser can help. The Construction Industry Council (CIC) in ‘A Guide to Project Team Partnering’ defined one of the key roles of the Partnering Adviser as: ‘to provide a first port of call in the event of misunderstandings or disagreements between project partnering team members’. This has been translated contractually under clause 5.6 of PPC2000 (Amended 2008) to: ‘assistance in the solving of problems and the avoidance or resolution of disputes in accordance with clause 27’ Clause 27 in itself deals with ‘Problem Solving and Dispute Avoidance or Resolution’ and in particular, uses the ‘Problem Solving Hierarchy’ as the means for escalating any dispute, most usually, firstly through the Core Group and then conciliation, adjudication, arbitration or litigation. Indeed, clause 27.4 promotes the use of alternative dispute resolution as a means of resolving a dispute if attempts at core group level are not satisfactory. (TPC2005 (Amended 2008) deals with dispute avoidance or resolution in broadly the same way as PPC2000 (Amended 2008) under Clause 14). So the role of the Partnering Adviser is to assist in resolving disputes. How about therefore if the Partnering Adviser could actually do more than merely assist, but act as Mediator? After all, the Partnering Adviser is jointly appointed by the partnering team members, is independent and is there to offer fair and constructive advice. Having some knowledge of the contract could therefore be quite helpful, though not essential in providing a facilitative role in helping partnering team members resolve their differences. Most importantly, mediation is a sustainable approach, most likely resulting in continuation of the contract and a genuine ‘win-win’ scenario for the parties. The problem is, that many Partnering Advisers tend to come from either a Construction Consultant background or as a Solicitor. Historically, Partnering Advisers may well have been involved in conflict resolution adopting traditionally methods including arbitration and litigation, appointed by one party to protect their interests no matter what and importantly, resulting in a ‘win-lose’ situation. Mediation, on the other hand offers an alternative means of dispute resolution by getting the parties to focus on ‘interests’, or in other words, ‘the bigger picture’. Therefore the Partnering Adviser acting as a Mediator requires a different set of skills. ‘Mediation is a flexible process conducted confidentially in which a neutral person actively assists parties in working towards a negotiated agreement of a dispute or difference, with the parties in ultimate control of the decision to settle and the terms of resolution.’ CEDR definition of Mediation Mediation is not an easy thing to do and increasingly, mediation is being recognised as a profession and discipline in itself with formal accreditation by the likes of CEDR (Centre for Effective Dispute Resolution). Mediation is not simply ‘getting the parties around the table’ to talk things through. Indeed, this is probably the worst approach, since the mediator will learn very little from a joint session in this type of format. In fact, mediation is a very structured approach comprising the following key stages:-
‘The great thing in this world is not so much where we stand, as in what direction we are moving.’ Oliver Wendell Holmes In most cases, the mediation itself only lasts for one day (sometimes 2 days, but rarely more). Whilst some preparation is required, mediation in itself is relatively quick. Therefore, this also means that mediation is also relatively cheap. Typically, the parties will share the cost of mediation on the basis that both parties have willingly entered into mediation. All in all, mediation is quick, cheap and most importantly, effective at resolving disputes. As a means of resolving disputes, the Civil Procedure Rules 1998 promote the use of ADR (Alternative Dispute Resolution) and views litigation as a ‘last resort’. In some countries, conflicting parties must attempt ADR before a case is brought to trial. Increasingly, mediation is being used in resolving construction disputes. PPC2000 and TPC2005 should be commended for making mediation (or conciliation) an explicit term under the Agreement, something not prevalent under other contract forms. However, the partnering team members have a lifetime of traditional attitudes to disputes and despite the fact that the contract may promote the use of mediation, it is unlikely many of them properly understand the process and in particular, appreciate the benefits of mediation. Therefore, the Partnering Adviser has a very important role to play in helping to promote an approach to dispute resolution. For those Partnering Advisers who are not trained mediators, they can recommend mediation, but for those that are, there are opportunities to support partnering team members who may be in dispute to resolve their differences and focus on the real benefits of being in a partnering agreement. Cameron Solve is a new division of Cameron Consulting offering mediation services. Neil Thody is an accredited mediator through CEDR, specialising in the resolution of construction disputes as well as being a qualified Partnering Adviser. For further information, please contact neil.thody@cameron-consulting.co.uk.
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Short Notice Inspections - Ensuring success! One of our clients recently underwent a Short Notice Inspection by the Audit Commission. It is always a relief to hear that work that has been ongoing with our clients has led to positive comment in each of the service areas assessed – indeed, inevitably through a series of well thought out processes, regular review of service improvement plans and contract reviews nothing is ‘left to chance’. Is it possible to be prepared for a Snap Inspection though? We think so – and here are some of our top tips:-
Above all, the key to short notice inspections would of course be ‘expect the unexpected’. We have worked with a number of organisations to assist them in their preparation for both Short Notice Inspections and Standard Inspections. If you would like to discuss anything raised here, please contact Karen on 01732 897766.
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Train to Gain As part of our commitment to our staff, we are always looking to develop and increase the skills and knowledge of all the people that work for us at all levels of our business. This year we worked in conjunction with Train to Gain. This has benefitted us by increasing the skill set available as well providing guidance and funding for the courses attended. What is Train to Gain? The two key areas of up skilling Cameron Consulting targeted were Project Management (Prince 2 Practitioner Consolidation) and Mediation (CEDR Centre for Effective Dispute resolution) as we know that these areas are heavily required by clients. In both cases the employees were interviewed by an adviser at Train to Gain to discuss their individual needs and how this was going to develop them personally and help the business. Train to Gain provided support regarding the training provider and a percentage of the course fees were paid for by Train to Gain. Train to Gain also provided impartial and independent advice identifying skills needs for all levels of our business. For further information on how Train to Gain could help your business go to www.traintogain.gov.uk.
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Pricing Strategies for Term Maintenance Contracts Current market intelligence tends to suggest that an increasing number of contractor organisations are switching their focus from capital to revenue based works. This is largely a result of the lack of investment in both public and private sector investment programmes caused by the current economic climate and public spending cuts, but also perhaps the recognition that revenue works can be lucrative, if managed efficiently. For clients responsible for delivering revenue based works, they are increasingly faced with reducing budgets, a deteriorating asset and scarce resources. Over the past few years, clients have focussed on selecting contractors based on ‘Best Value’ in accordance Government Policy. However, whilst selection is and should still be based on ‘Best Value’ criteria, it is also important to get the pricing right, particularly for Term Maintenance Contracts, that in most cases will be relatively long term (typically 5-10 years). Striking the balance between cost certainty, value for money, transparency and sustainability is a key concern for clients and contractors alike and therefore, getting the most appropriate price framework in place for the duration of the contract term is important. No one solution is the right solution and clients should consider their options carefully before committing to a certain type of pricing strategy. Over the next two newsletters, we will explore some of the different types of pricing strategy for delivering term maintenance contracts (of varying types), highlighting the advantages and disadvantages of each type of price framework. In this issue, we will cover the following types of pricing framework:-
Schedule of Rates - A schedule of rates (SOR) is essentially a schedule of brief descriptions of a work activity (or task) with a fixed price. Usually these are grouped by work category or component to enable them to be easily identified and used in terms of ordering a task. Each SOR will have a price which will represent the amount the contractor is paid for that task. There are variations on the SOR including pre-priced SOR’s such as the National Housing Federation SOR’s which requires contractors to mark a percentage adjustment to a pre-determined price, which will then derive the agreed price for the task. Other SOR’s may be left blank for the contractor to price under market conditions. Traditionally, the price against the SOR is deemed to include all overheads (site and office) and profit, although variations exist where these amounts are stated elsewhere. Either way, the SOR is a compounded price covering all aspects of the task (materials, labour and plant). The primary issue with using SOR’s is that they don’t always accurately reflect the task being undertaken. If a SOR is not available then the most appropriate SOR may be used which could result in over or indeed under payment. The very nature of a SOR is that the risk is primarily with the contractor who has priced it and if they get that wrong, then they could be stuck with rates that are unsustainable. On the plus side SOR’s make term maintenance contracts relatively easy to administer. The commitment to spend is known at the point of order and therefore it should be relatively easy to budget and account for. Equally, this makes it quite easy for re-charging purposes. Open Book - This approach has become more popular with the use of more modern procurement contracts such as the Term Partnering Contract TPC2005 (amended 2008). Essentially, open book involves the declaration of all cost components by the contractor, including overheads, profit, sub-contractor costs, supplier invoices, labour and plant. Contracts can be administered in a pure open book sense, much like a ‘cost plus’ approach (see below) or in conjunction with another form of pricing strategy. For example, the term contract could be administered on a SOR with open book being undertaken (say annually) to verify actual costs. The issue with this approach is when the two outputs vary. For example, if the contractor received considerably more via the SOR than it cost, verified by open book, then this may create an uncomfortable position for both parties to resolve. On the other hand, open book does at least provide transparency in pricing so that everyone can be fully aware of the costs and therefore collaboratively make decisions on how to manage the service. Contractually though, open book does not mean unrestricted access to books of account and may not necessarily be used to adjust pricing. Cost Plus - This approach ‘does what it says on the tin’! Basically, the contractor is reimbursed for the actual cost of undertaking the task with an agreed ‘mark up’ or margin. Under this type of arrangement, the contractor is most likely to manage the contract with a dedicated ‘Profit and Loss (P&L)’ set of management accounts, detailing all expenditure. A slight variation on this approach could be the use of hourly rates for personnel, based on their actual salaries, so that each task has a time charge and then actual materials are reimbursed ‘at cost’. Obviously with this type of approach, all of the risk is with the client, since they will pay the contractor for all of his costs. One argument is that this could include paying for inefficiencies and therefore there is little incentive for the contractor to reduce costs. One advantage of this approach is that by sharing information on an open basis, encourages collaboration between client and contractor and the opportunity to work together to reduce the cost of the service. In the next issue, we will explore Fixed Price, Target Cost and Hybrid pricing frameworks, together with advice on how to go about determining which pricing strategy is appropriate to your organisation. Finally, we are delighted to offer training seminars on Pricing Strategies and Open Book methodologies. Our training sessions can be tailored to your specific needs whether you are a client, consultant or contractor seeking a greater understanding of the key issues. If you are interested, in any of the training we have to offer, then please click here to register your interest.
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Local Authority + PCT’s in one service = Commissioning Bliss? If recent comments by NHS Hammersmith and Fulham chair Jeff Zitron are to be believed, then giving the local Primary Care Trust commissioning role to Local Authorities would be:- ‘an excellent way of reducing beaurocracy and bringing health services closer to the public.’ His thoughts go much further in as much as having councils and acute commissioning being carried out by a Capital Wide body - of course, this could be widened to encompass Social Care removing further management levels which cost the public sector millions - but would this be one step too far? The arguments for are multiple including:-
However, with everything there will always be arguments against:-
The case of Hammersmith & Fulham is a compelling one. By integrating H&F LBC with H&F PCT they have identified that the PCT’s £150m continuing care budget with the councils £72m community care budget of £72m could lead to substantial savings by taking a local integrated approach to care delivery - now wouldn’t that be refreshing? Cameron Consulting provides consultancy to both NHS clients and Local Authorities, to date, we have been working with these organisations independently to offer supply chain solutions, procurement pathways and service improvement offerings - knowing as much as we do about NHS clients and Local Authorities, we know we are well placed to help your organisations with any potential plans to integrate - even if initially it may just be a ‘what is possible’ review. With public budgets being ‘reviewed’ and inevitable cuts on the way - wouldn’t you rather be in control of where those savings are made? If you would like to have a proactive discussion with a member of our team regarding anything discussed in this article, please call us on 01732 897766.
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PRINCE2 - Can it really help your projects run smoothly? We think so! So much so that Heather Langridge has recently become a Registered Prince2 Practitioner. This is great news for Cameron Consulting and follows in line with our CPD policies for all staff. Heather sat the Foundation Exam while still with Greenwich Council and this summer consolidated her skills by undertaking the Practitioner Training to complete her qualification. What is PRINCE2? PRINCE2 is a standard used extensively by the UK Government, local authorities, other public bodies and is widely recognised and used in the private sector, both in the UK and internationally. PRINCE2 is a registered trademark of OGC. It is a structured approach to project management, providing a method for managing projects within a clearly defined framework. There are procedures to coordinate people and activities in a project, how to design and supervise the project and what to do if the project has to be adjusted if it doesn’t develop as planned. Each process is specified with its key inputs and outputs and with specific goals and activities to be carried out, which gives an automatic control of any deviations from the plan. A project, whether large or small is divided into manageable stages and so close monitoring of the project can be undertaken and any problems spotted at an early stage. Heather has found that the methodology can be easily applied to many of the projects she works on and has learnt from experience that projects that aren't organised and controlled properly usually go disastrously wrong! Having experienced and qualified Project Managers is just one reason why Cameron Consulting should be your first choice when looking for someone to really take your project to the next level. To speak with Heather to understand her expertise and some of the skills she has used with current clients, please call 01732 897766.
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Kent Kids: Miles of Smiles when cheque presented! Kent Kids is our charity of the year. On Thursday November 5th 2009 Linda Northridge had great pleasure in making a trip to Canterbury to meet everyone at Footprints, one of the care homes that Kent Kids runs. It was great to see all the hard work that is being carried so that the children and young adults live in a caring and happy environment. There are currently 6 children who are permanent residents with a respite care list of up to 12 children. It was great to see the facilities they provide from a spa to a multi sensory room. All of the rooms have been painted by a local artist in various Disney themes and several times a year he will come and visit and add characters to the walls. Footprints is set in beautiful grounds where there is a great play area and just recently added is a thatched roof sun terrace where outdoor parties can be held and the peace and quiet of the countryside enjoyed. Kent Kids relies totally on donations and fundraising from local businesses and the community. Linda was delighted to be able to give a cheque, on behalf of everyone at Cameron Consulting, to Liz Baxter Head of fundraising. Liz and her team of one Michelle Moxley are kept busy all year raising money for this very deserving cause; they will try and attend all the fund raising events to give their support. Their most ambitious event to date is to trek the Inca Trail in Peru, Liz will be joining several other people from Kent to walk the trail which is 3360m above sea level, more volunteers are required so if this is something that you want to do then why not do it for a good cause. For more information about Kent Kids have a look at their website http://miles-of-smiles.org.uk and of course, if you want to have a look at our CSR policy, please click here. It was great to see what a deserving charity Kent Kids is and to know that the money we have donated is going to such a worthwhile cause. Cameron Consulting are pleased to support Kent Kids and look forward to helping them over the coming year.
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Nuneaton & Bedworth Kitchen & Bathroom re-procurement: Capacity Building We are really thrilled to be continuing our relationship with Nuneaton & Bedworth Borough Council. We are re-procuring their Kitchen & Bathroom contract with a slight twist! We committed to the client to assist them with this re-procurement, based on the ideal that throughout the process we would build their in-house capacity in order that eventually they would be able to undertake many of the tasks associated with the procurement activities themselves. This is something Cameron Consulting pride themselves on. When we are capacity building with clients, we know we are truly adding value. That said, we hope to continue this relationship for many years to come! For more information on our capacity building techniques for many aspects of contract development, please click here.
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Wandsworth Council: External Repairs and Redecorations Contract Administration We commenced works with Wandsworth 2 years ago carrying out roofing projects. We welcome the continued opportunity to work with them, this time contract management of the external repairs and redecorations contract. James Belk will be leading on this contract and will be bringing his extensive experience and expertise to the role. Cameron Consulting are experienced project managers and welcome continued works of this nature. If you have a contract you wish to discuss, please contact James Belk on james.belk@cameron-consulting.co.uk.
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Welcoming Our New Team Member: James Belk who joined us in October, is a chartered Building Surveyor with over 20 years experience in both the private and public sectors, including commercial, education, healthcare, housing, infrastructure and telecommunications. He has considerable experience in the housing sector and, as an associate director at Dunlop Haywards, was responsible for the management of project teams delivering large-scale maintenance and refurbishment projects, including decent homes, estate regeneration and major works programmes for a number of local authorities and RSLs. Before moving to Cameron Consulting, James was the Building Surveying Director at the London office of an international civil and structural engineering consultancy where he was responsible for overseeing architectural and structural engineering activities in addition to running the building surveying team. James is a keen advocate of best value in construction, using a combination of robust partnering, effective risk management and sustainability in construction, not only in terms of energy efficiency but also whole life costs, future maintenance and final disposal. He has become an integral and valued member of the team very quickly and is adapting well to Radio 2 and the ‘fiddly’ coffee machine… if you wish to re-establish contact with James, please call him on 01732 897766.
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