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In addition, Heather has a detailed working knowledge of the community and estate management environment, gained within a leading London local authority. Specifically, she has experience of all aspects of repairs ordering and processing, gas servicing, rent collection, and tenancy enforcement. She has been responsible for reviewing and updating housing policies and procedures and undertaking service reviews.

Heather is a qualified PRINCE2 project manager and a Certified Microsoft Technology Specialist; enabling her to deliver your objectives to a high standard, on time and ensures that your projects will be in safe hands.

We covered a whole variety of topics and there were even a couple of competitions, feedback so far has been great!

Please let us know if there is something you would like covered in your next newsletter, otherwise we look forward to hearing from you soon.

Please contact us if something is of interest to you.

In the meantime, Our ‘Save the Date’ timetable is:-
Contractor Newsletter – June 2008
Partners Newsletter – June 2008
Summer Client Newsletter – July 2008
Partner Event – 2nd October 2008
Autumn Client Newsletter – October 2008

Please let us know if there is something you would like covered in your next newsletter, otherwise we look forward to hearing from you soon.

As part of this continued growth, we are expanding our Learning and Development division.  In addition to Cameron Evolve which is our dedicated training division, we are delighted to introduce ‘Helping HANDS’, and ‘Brain Gym’.

Helping HANDS is our stakeholder engagement training package and is designed specifically reflecting all the latest government guidelines around the specific roles of stakeholders in future decision making processes.  For further information about this, please click here.

We will be showing some of the techniques we use with clients and some of our Best Practice that we know you will find of interest for your own projects. Additionally, our whole team will be manning the stand at various points during the week, so please do come and introduce yourself - we’re right opposite the Older Persons Feature - so very easy to find!

We are advising the Council on the procurement of a Construction Management Team to fulfill this role which will entail procurement in accordance with EU Rules. Initially we will be working with the DLO, client officers, Members and key stakeholders (using our Helping HANDS stakeholder engagement programme) in developing the procurement strategy. Thereafter, we will design and develop an appropriate Service Level Agreement and Specification, working in conjunction with our Legal Advisers, Vertex Law. This is a unique public/private partnership that is designed to bring together the best aspects of running a DLO together with the commercial experience of a private sector enterprise with the ultimate aim of building capacity within the in-house team.

We will be working in partnership with Moat and Apollo to firstly – and most importantly – undertake ‘Stakeholder Mapping’ to identify the thoughts and feelings of both parties in terms of their satisfaction with the Partnering Contract. We will then use this information, along with the contract and KPI’s to date to build a full picture of the ‘missing elements’. Essentially, this is a gap analysis which is being carried out with the full commitment of both parties. This means that the learning programme being developed to further integrate both parties will be seen as legitimate in the eyes of the stakeholders, contain relevant and appropriate activities and achieve their desired outcomes quickly – all the time building the in-house capability of both teams. We will share more as the programme develops. If however you wish to speak with someone regarding your Learning & Development needs, please contact sarah.rae@cameron-consulting.co.uk

Helping HANDS is different from the traditional “hearts and minds” training because it is really hands on, practical capacity building bringing people together from all aspects of your business.

In short helping HANDS stands for:

“We really felt as though the Contractors were taking us seriously. The training that was given to us in tender evaluation, site visits and interviews gave us the confidence to fully take part in the whole procurement process – something we would not have done previously”
NCH residents

‘Being part of the process has been interesting, enlightening and a learning experience.’
Linda Henstock – Tenant, Board Director

For an informal discussion on how Helping HANDS can help your company, please contact Karen Thody at karen.thody@cameron-consulting.co.uk.

It was with this in mind that Kent Kids made the decision to fundraise not only to continue to take children holiday but to also fundraise to establish and run a small care home in Kent.

A property was found in 1995 and after four years of fundraising in May 1999 Footprints opened its doors to six disabled children for holiday and respite care.

Then in 2004 a second property was purchased this has been developed into a six bed-roomed registered care home.

Kent kids want to create an atmosphere of happiness and enjoyment within a safe caring environment so young people can grow and develop, at the same time as enjoying life to the fullest possible extent.

Cameron Consulting will be giving a percentage of its profits to Kent Kids to enable them to continue the fantastic work that they are providing to many families within Kent.

Develop Robust Evaluation Strategies – With an increasing litigious market due partly to an uncertain economic climate and also bad procurement practices it is absolutely essential that first class evaluation strategies are developed that set out the process for evaluating bidders at each stage in the procurement process. In the case of two stage tendering, such as the Restricted Procedure or the Competitive Dialogue Procedure, this entails evaluating bidders at both pre-qualification stage and then at tender stage (Invitation to Tender or Invitation to Participate in Dialogue). In the previous article we addressed the importance of setting out clear evaluation criteria and sub-criteria. However, translating criteria into a methodology for evaluating bidders’ proposals is a skill that requires a good understanding of the type of procurement being undertaken, aligned with scoring systems that are robust, fair and transparent. We always prepare ‘Evaluation Methodologies’ for each stage of the process, that combine details of how the evaluation will be undertaken, who will be involved in the evaluation process and above all, scoring templates for assessment. In addition, we recognise the need to engage stakeholders in selection processes and to that end, we also provide training for evaluators and above all, ‘Prompt Sheets’ and/or ‘Model Responses’ to support the evaluation team understand how to assess responses.

Top Tip: Develop Robust Evaluation Strategies

The ‘Alcatel’ Statutory Standstill Period – Following the case of Alcatel Austria and Others -v- BundesministeriumfürWissenschaft und Verkehr the European Commission ruled that all EU Procurement should be ‘open to review before conclusion’. The impact of this being that an aggrieved bidder can have an opportunity to challenge the award of contract if there has been a breach in the Rules, resulting in the setting aside of the contract or where a contract has been awarded, a claim for damages. Therefore the Public Contract Regulations 2006 into which EU Law is enshrined in the UK now includes for a 10-day mandatory standstill period prior to award of contract. The standstill period has significant implications for both purchaser and bidder. In the case of the purchaser, the notification of results must contain details of the award criteria, the score obtained by the economic operator and the score obtained by the winning operator and finally, the name of the winning tenderer. From a practical perspective, purchasers must ensure that their evaluation strategies have been properly followed including adopting correct procedures around post tender clarifications. For example, purchasers cannot introduce new evaluation criteria post tender or negotiate with bidders. In addition, under the Regulations, bidders have a right to request a ‘de-brief’. Purchasers should therefore prepare themselves for such requests by making available all relevant information to feedback to unsuccessful bidders. It is also recommended that these de-briefs are formally recorded in the event that an aggrieved bidder may take further action. From a bidder’s perspective, it is important to know your rights under the Regulations and in this regard, timing is critical. Once the Alcatel period has passed, bidders have little recourse other than damages. In fact, if an aggrieved bidder considers a breach in the Rules, they can take out an injunction preventing the award of contract, the result of which may result in the ‘setting aside’ of the award and potentially the re-commencement of the tender process. Once the Alcatel period has passed without challenge, and assuming a contract is awarded and there is a breach in the Rules, then an aggrieved bidder may apply to the Courts for damages which could include loss of profit, tender costs and legal costs. However, under the present rules, what this doesn’t mean is that the award of contract can be set aside and therefore, no opportunity for an aggrieved bidder to be awarded the contract.

Top Tip: Understand the Rules; Know your Rights.

The EU Remedies Directive – In late 2009, the EU Remedies Directive is likely to come into force (it is currently under consultation via OGC). The main impact of the new directive is the introduction of ‘ineffectiveness’ as a remedy for illegal award of contracts. Effectively the new Directive is pretty much the same as the current Mandatory standstill period discussed above, with the exception that the standstill period may be increased to 15 days. However, the most significant difference is that no contract award can be made before the court has made a decision either on the outcome of the review itself or on interim measures, or before the end of the standstill period. The significance of this is that unsuccessful bidders who make a challenge outside the Alcatel period can apply to the Courts to have the contract ‘set aside’. This supersedes the current ruling whereby after the award of contract, only damages can be sought. The practical implications of this are such that if an unsuccessful bidder is successful in having a contract set aside, this could be well into the contract placed by the client. The client may have to terminate the current contract and start a new procurement process, notwithstanding the recovery of mobilisation costs incurred by the appointed bidder. Clearly any successful challenge could be costly, therefore reinforcing the absolute importance of good procurement practice.

Top Tip: Make sure evaluation criteria and strategies are well defined and administered during the selection process.

EU Procurement is complex and ever changing. There are significant challenges both for purchasing and bidding organisations and therefore up to date knowledge is essential in understanding the Rules and in adopting safe and ethical practices.

Finally, we are delighted to offer training seminars on the EU Procurement Regulations. Our training sessions can be tailored to your specific needs whether you are a purchasing organisation undertaking an EU procurement process or a bidding organisation seeking a greater understanding of the process and want to learn how to respond to EU contracts. If you are interested, in any of the training we have to offer, then please click here to register your interest.

To view the first part of this article contained in our Spring 2009 newsletter, please click here.

In December 2008, The European Commission in recognising difficult economic times decided to relax the rules governing the use of the Accelerated Restricted and in particular in allowing ‘Major Projects’ to be procured using this route with little or no justification required. These relaxed rules only exist during projects procured in 2009 and 2010.

In terms of how this may impact both purchasers and suppliers alike, it is first of all worth noting the key changes. In effect, the Accelerated Restricted Procedure can only be used in how the previous Restricted Procedure is used. It cannot be used in conjunction with the Open Procedure, Competitive Dialogue or the Negotiated Procedure. Therefore, the process remains a two stage selection process with the impact on timescales as follows:-

For purchasers this enables projects to be procured much more quickly which can be particularly beneficial to meet funding requirements or to perhaps re-procure in the case of a failed current contract. However, the use of the procedure should be considered carefully so as not to restrict fair competition and in particular the markets ability to respond. We have recently used the Accelerated Restricted Procedure where a contractor was halfway through a development and then went into administration resulting in termination of that contract. The client, a Registered Social Landlord wanted to complete the works quickly so we used the Accelerated Procedure to get a new contractor on board, combined with award criteria as ‘Lowest Price’ to minimise the evaluation process.

For suppliers, the increased use of this procedure creates challenges for both large and small bidding organisations. An already stretched marketing resource will now need to commit resources quickly and efficiently to enable an appropriate response.

Market reports seem to suggest a greater use of this procurement procedure at the present time and therefore greater knowledge in how it is used should be sought so as to understand the implications of it in practice.

For further information on the Accelerated Restricted Procedure and other EU Procurement matters, please contact Neil Thody at neil.thody@cameron-consulting.co.uk.

It is considered that adopting ‘Lean’ in this way will deliver considerable benefits to the client in terms of long-term efficiency gains and quality improvements, whilst providing a ‘coaching’ provision for the appointed contractors to truly demonstrate the value of this innovative approach.

"One of our key commitments is giving people greater access to services at times which are more convenient to them. This new centre has been designed to do just that."

The centre, which will open 12 hours a day and 365 days a year, will provide GP services along with blood tests, minor surgery, cervical screening, drug and alcohol services, weight management, smoking cessation, sexual health advice, vaccinations and ECG tests. It will offer appointments as well as a walk-in service to both registered and non-registered patients.

To that end, Cameron Consulting has been involved extensively in:-

• Contract completion and execution working with legal teams from PCTs
• Fostering relationships with Estates, IT, Procurement, Facilities Management and Communications with 8 PCT’s
• Setting up of Facilities Management Contracts
• Procurement of all equipment and supplies (clinical and non-clinical) at quality and cost better than that achieved by NHS (Purchasing and Supply Agency)
• Development and Implementation of HR policies and Procedures
• Recruitment of the new teams for these sites (240 new employees) and the follow up checks including CRB disclosures
• Development of KPI suites to monitor performance across the group

The next site to mobilise imminently is within Coventry PCT where we have been working very closely with their Project Manager Jas Kumari who commented that:

"It has been a pleasure working with Karen, she has provided us with all information required, ensured that we have all the right staff in place for mobilisation, implemented the KPI strategy and most importantly communicated with us at all times to ensure the successful set up of the Stoke Aldemoor Site."

More on the mobilisation of Coventry, Sandwell and Telford Sites in the next newsletter and a little more on the development of the supply chain on behalf of Malling Health.

If you would like more information on how Cameron Consulting can help your organisation develop their NHS or Project Management Capabilities, please contact karen.thody@cameron-consulting.co.uk.

To reinforce the robust nature of EU Procurement we have supported the stakeholder team by providing training and mentoring in their important role. Our innovative stakeholder engagement programme ‘Helping Hands’ has now been used in Rykneld Homes and Kensington & Chelsea (TMO) and addresses the key recommendations of the Audit Commissions ‘Better Buys’ report of February 2008 and in particular, ‘ensure that residents are involved in, and have appropriate opportunities to influence, relevant procurement processes.’

‘Being part of the process has been interesting, enlightening and a learning experience.’ Linda Henstock – Tenant, Board Director

Of most importance to us was the links we made with both existing clients and those people we met who have since approached us to identify how we can work together in the future.

We had lots of really positive feedback about our stand, with the favourite sweet being declared as ‘the strawberry bon-bon’ with several frequent visitors! Thankfully as all staff looked after the stand at different points in the week – we all got the chance to speak to a huge number of people.

The stand was also commented upon by CIH, who not only loved our strap lines:-

‘Helping your business develop a clear vision’
‘Helping your business avoid unforeseen risk’

But also the link to Brighton with an image of the burned down West Pier, and indeed have happily accepted our request for a more prominent position for 2010.

We have already booked our space for next year, and look forward to seeing some familiar faces and of course meeting lots of new ones.

We will give you more details as and when we get them but if you wish to follow up with anything you may have discussed with us at conference, please contact sarah.rae@cameron-consulting.co.uk.

In addition, we are also delighted to announce our association with De Montfort University in Leicester.

In addition to building links with De Montfort in terms of their business development strategies, we have also forged a link between Malling Health and De Montfort’s career service who have agreed that Malling Health can be one of their ‘preferred employers’. As De Montfort has a strong nursing faculty, this has already proved a popular option for many Postgraduate students who have been applying for employment as a direct result of Malling Health’s innovative Job Adverts being posted, not only on the careers notice boards, but also on the careers newsletter which goes out to all students and postgraduates still registered with the careers service. We are also looking forward to presenting on potential career pathways within the NHS to current students.

Where contracts are procured in accordance with EU Procurement Rules and this only applies to public sector bodies and for works/services/supplies over a certain value, then tendering must be undertaken in accordance with these Regulations. For the time being, any unsuccessful bidder who considers there to be a breach in the Regulations during the process may bring a challenge, although the only remedy at the moment is damages. This won’t necessarily mean that an unsuccessful bidder gets the opportunity to tender again, since the client may have already entered into contract. The new EU Remedies Directive, which is likely to come in around December 2009, will seek to address this under a new ‘ineffectiveness’ provision. This will place far greater importance in getting the process right from the start.

Over the course of the next two newsletters, we will set out our top tips for effective EU Procurement, starting with 4 top tips in this issue:-

Get it right from the start – One of the most important things is to make sure that the client is very clear about what they want to purchase. Once the decision to purchase is made and the EU process starts, the inflexibility within the Regulations often makes it difficult to amend the procurement needs without starting the process all over again. Therefore we would always recommend quality time spent with the client at the outset in helping them develop their procurement strategy. This will also shape how the final contracts will look, whether you are looking at term contracts or frameworks for example.

Top Tip: Develop a clear Procurement Strategy.

The Contract Notice – This is the single most important document in the EU Procurement process that effectively sets out the client requirements. There are of course a number of elements to the Contract Notice, which would be an ‘article’ in itself. Suffice to say, every section of the Notice needs to be completed including the estimated contract value, description of the works and the type of works (using the right CPV (Common Procurement Vocabulary) codes). At this stage, we would strongly recommend specialist advice from a procurement adviser or solicitor since failure to comply with Regulations may result in recommencing the process and the impact of such delay on the commercial objectives of the client.

Top Tip: Seek advice when preparing the Contract Notice.

The Pre-Qualification Questionnaire (PQQ) – Increasingly, PQQ’s are used (in two stage tendering) to establish the financial, economic and technical capacity of a bidder. PQQ’s must only be used to assess bidders previous experience and therefore suitability to tender. In addition, the criteria for assessment at this stage must be clearly set out including whether assessment criteria is ‘pass/fail’ or ‘scored’. It should be borne in mind that the purpose of the PQQ is to use it as a tool for shortlisting suitable bidders. Therefore the quality of what you ask for and how you assess it are critical in determining the right bidders for your project.

Top Tip: Design PQQ’s that give you the right shortlist of bidders.

The Invitation to Tender (ITT) – The ITT is the all-encompassing process of the second stage of the tender and will typically include the client’s requirements (both strategic and technical). Where tenders are assessed in terms of MEAT (Most Economically Advantageous Tender) criteria this will invariably require a qualitative as well as quantitative response. The key to successfully ensuring that you end up with the right partner is in the quality of the ITT. The ITT is an opportunity to assess the bidders specific proposals (N.B. not previous experience which is requested at PQQ stage) to the client requirements. Furthermore, all of the criteria and sub-criteria for assessment must be clearly set out including how responses will be evaluated. Equally, on the quantitative side, clear cost models and price frameworks should enable ‘like for like’ assessments to be made. The quality of the ITT is crucial in ‘staving off’ potential challenges (more of this in the next issue!).

Top Tip: Design bespoke ITT’s that reflect the client need and ensure that evaluation criteria is clearly set out and transparent.

In our Summer newsletter, we will continue with our top tips including:-

• Contractor Evaluation Strategies
• The ‘Alcatel’ Period and Challenge of Award
• EU Remedies Directive

In the meantime, if you have any queries in relation to your procurement needs, then please contact neil.thody@cameron-consulting.co.uk.

On longer term contracts such as service based programmes including repairs and maintenance, this contract provision can be used on a regular basis (annually, for example) to review performance and use the outcomes of such a review to determine such things as: reviewing performance targets, extending the contract, terminating the contract, allocating any savings/overspend via risk/reward mechanisms and to capture lessons learned to drive best practice and continuous improvement.

In our experience, this clause is not religiously used with any vigour and as a result, this undermines one of the most effective contract tools within TPC2005 that truly make it unique in driving continuous improvement.

Cameron Consulting have undertaken a number of Term Reviews on TPC2005 on contracts ranging from repairs and maintenance to gas servicing contracts. We usually undertake these in a workshop environment whereby partnering team members can contribute in a collaborative fashion to meeting the project targets for continuous improvement.

For further information on how you can better utilise the contract to meet your continuous improvement targets contact neil.thody@cameron-consulting.co.uk.

We will be showing some of the techniques we use with clients and some of our Best Practice that we know you will find of interest for your own projects. Additionally, our whole team will be manning the stand at various points during the week, so please do come and introduce yourself - we’re right opposite the Older Persons Feature - so very easy to find!

The selected specialists will be involved in supplying components such as kitchens, boilers, windows, doors and roofing materials. In our continued role with Greenwich Council, we are now involved in integrating the specialists into the current partnering arrangements in place between capital and revenue contractors. Initially this will entail a series of workshops and meetings, aimed at integrating the team. The entire selection process has been designed adopting the Strategic Forum’s Integrated Toolkit. The development of this toolkit was initially funded by Constructing Excellence and has been used in the initial procurement strategy through to supplier selection and appointment.

Malling Health started life providing primary care services tracing right back to the inception of the NHS in 1948, and they believe that even today they continue to innovate in the services they offer, by using modern technologies to enhance patient access. These new GP-led health centres will be open seven days a week from eight in the morning until eight in the evening, offering extra GP services and are there to essentially complement the services provided by other local GP’s - they came into existence following a review of equitable access to primary care by Lord Darzi. Our role is very much around project managing a safe & secure implementation of each individual clinic, liaising with the PCT’s, ensuring successful procurement of required surgery fixtures, outsourcing of legal, HR, Marketing & Design and IM&T (Information Management and Technology) service both during implementation and following service commencement. Most importantly ensuring that when in place, the clinics offer an outstanding patient experience. This is a great move for Cameron Consulting and utilises Karen’s previous experience of the NHS while working for a large pharmaceutical company.

For more information on work we do within the NHS, please contact karen.thody@cameron-consulting.co.uk

The contract is the Term Partnering Contract (TPC2005) and we are particularly pleased to be appointed jointly in recognition of our independent role in assisting both parties to deliver further service improvements. Indeed, with increasing pressure on budgets and the need to truly demonstrate impartiality, a joint appointment can work in the best interests of the contract overall. For further information on how we can support you in providing Partnering Adviser services, please contact neil.thody@cameron-consulting.co.uk.

Each of the 5 Framework Contractors gave a short presentation on their aspirations for the contract and the Partnering Charter was formally launched in celebration of the event. The evening underlined the importance of synergistic working in a partnership with a number of contractor partners and the need for excellent post contract mobilisation activities to build trust and understanding between all parties. We will continue to update on this contract. If you, or anyone in your team would like to know more about post contract work streams and how they can be effectively used to strengthen your contract, please contact us.

We are pleased to report that 2 placements utilising the Pathways 2 Progress programme are now active and both participants are not only doing well on their placements but also have secured college places! The success of these early placements has encouraged the client team to really look at how this can be developed and implemented across wider areas and larger regeneration schemes within their portfolio – we will continue to update. In the meantime, if you are interested in developing training via your main contracts but aren’t quite sure ‘what to do next’, please contact Karen on 01732 897766.

The overarching aim of the day was to provide these legal teams with knowledge relating to procurement processes. Specifically, Karen was asked to address the issue of challenging a procurement process. The presentation itself led to many questions which flowed straight through into coffee – highlighting only too well the fact that challenges from unsuccessful bidders as a result of the EU remedies directive, and indeed, more knowledge around how and when to challenge is giving rise to more and more challenges to the procurement process. There was some great feedback on the day, summed up by Angus Russell (Director of Corporate and Legal Affairs, TNT Post)

‘Karen provided a lively, energetic and informative account of how procurement works in the real world.’

If you would like advice on either, management of risk during a procurement process, or indeed would like an informal discussion in relation to a procurement process you feel you have reason to challenge, please contact Neil Thody on 01732 897766.

As Consultants we were recently invited to tender on the basis of lowest cost only. When asked whether they would like to know about our proposed team, approach and methodology to the commission, the response was ‘Well, we know what you’re like, that’s why you’re on the list’!! Not surprisingly, we failed to win the tender and indeed found that our fee was nearly twice that of the winning consultant. The Client undertook a degree of due diligence on the lowest tender but with pressure from Board members and a limited budget (despite our tender being within budget) the client in essence was presented with an offer he couldn’t refuse. This behaviour is not uncommon.

Lowest price tendering is also reappearing in construction tenders. For some clients this has always been the way but over the past 10 years, particularly, post Egan, the mindset and attitude had changed with the public sector leading the way, particularly under Best Value following the Local Government Act 1999. However, with cash strapped Councils and other public sector bodies feeling the austerity measures of the new coalition, there is a movement back towards lowest price tenders. ‘Oh no, a return to the Thatcher years of Compulsive Competitive Tendering (CCT) I hear you cry’! These were bad days for everyone, not least of which the people involved in delivering projects during this time. Lowest price tendering seems to bring out the worst in everyone. Claims and disputes, cost and time overruns, short term relationships, fragmented supply chains and in most cases – FAILURE.

So who is to blame? I recently spoke with a mid size regional contractor with a turnover circa £80m per annum, specialising in new build homes in the social housing sector. He felt that low cost tendering was a result of a number of factors including:-

1. Market conditions;
2. A poor client;
3. Poor quality tender documentation caused by Consultants trimming input to match the fee;
4. Poor procurement practices including mix of quality and cost criteria;
5. ‘If you can?t beat ‘em, join ‘em’ attitude!

So I then said, ‘Well what?s the answer?’

To which he responded, ‘In an ideal world, all the tenderers would get together and agree to submit commercially realistic prices, but of course, we can’t do that!’ Bearing in mind the OFT have recently found a number of contractors guilty of bid rigging!

So it seems then that tenderers are ‘caught between a rock and a hard place’. So too it would seem, clients. Clients want a low price but equally they want good quality and an easy life. Contractors can of course provide a low price, but that comes with a high cost and this is why Traditional Procurement must be avoided in the current climate.

The recent demise of Connaught has highlighted that low pricing is simply not sustainable. This was exemplified none more so in the fateful award of contract by Norwich City Council to Connaught to undertake day to day repairs. Despite a challenge from Morrison on the grounds of the tender being abnormally low, the Council still decided to award the contract. The drive to increase shareholder value over the short term has led to a lot of very unhappy people. Think about the residents who are not receiving a repairs service; the client who is left to pick up the pieces of a failed contract; the unpaid sub-contractors and suppliers and most of all, the employees who no longer have a job (300 in Norwich alone). The long term impacts will be felt for years to come.

What alternatives are there then to Traditional Procurement? Well, PPC2000 and TPC2005 offer potential solutions. These of course are only contracts which are part of an overall procurement strategy. A sustainable procurement strategy must:-

1. Identify the procurement needs of the organisation, i.e. clearly defined project or programme;
2. Set out a clear strategy for the overall procurement process;
3. Ensure that collaboration and integration are at the heart of how the project will be delivered including the early appointment of the core team;
4. Ensure that contractor selection strategies reflect the procurement need. For example, if the product/service is of low value such as stationery, then lowest price may be perfectly acceptable. For high value, complex products such as the design and build of new homes, then selection criteria must be weighted more heavily in favour of quality;
5. Set out a realistic budget for the project or programme.

PPC2000 and TPC2005 contribute to a sustainable procurement agenda through the following mechanisms contained in the contract:-

Early contractor appointment – PPC2000 allows for the early appointment of the contractor to enable them to contribute to design development as part of an integrated team;

Supply Chain Development – Both PPC2000 and TPC2005 include provision for ‘Supply Chain Business Cases’ which is a mechanism for getting specialists and sub-contractors integrated into the team at the earliest opportunity;

Open Book Accounting – The Client may exercise their option to undertake open book accounting. This can apply in the development of prices through open book tendering, as is more prevalent in PPC2000 or as a management tool on Term Partnering Contracts. In the case of the former, open book can be used to determine whether the contractor is achieving a fair and reasonable return and that the client is receiving value for money;

Project and Term Reviews – This is an (contractual) exercise for all partnering team members to review progress and performance and to implement continuous improvement measures.

In addition to the above, TPC2005 in particular, is used on longer term contracts. Therefore, getting the right pricing from the start is critical to long term success. Given that the pricing established at the start of a programme is usually via a tender exercise, it is imperative that these are sustainable from the start. If contractor selection remains on lowest price then the current market that is driving low cost tendering may mean that low prices remain for the life of the contract, resulting in all of the problems set out earlier. The client and/or consultant advising the client must be prepared, where necessary to challenge pricing and in some cases, reject tenders that would appear to be abnormally low and in any event unsustainable. As Rudi Klein put it, in not doing so, could be negligent. Now, where is the risk? Rejecting a tender and facing a challenge or accepting a tender, facing a negligence claim and the fallout from the failing contractor. To my mind, the answer is simple. The question is ‘Which way will you go?’

The use of open-book, coupled with the supply chain efficiencies that can be obtained on large-scale projects offers the prospect of achieving best value whilst providing cost certainty to both the client and the service provider. In addition, incorporating local labour provisions into any partnering agreement can benefit the social sustainability of an area and of the client’s own tenants.

An additional benefit of partnering is the possibility of collaborating with the service provider in terms of sharing facilities and collaborating in the provision of the pre-works surveys, whole life costing processes and updating of the asset register post completion. This has the benefit of streamlining processes and taking advantage of the service provider’s ability to generate efficiencies of scale across a number of projects for different clients.

It also exposes client organisations to commercial business practices and improved operational efficiencies and whilst asset management teams are clearly not driven by the need to generate profits, such techniques can be used to improve efficiency and ensure available funds are used on front line delivery rather than back office management.

When examining the opportunities offered by partnering, existing DLO’s should not be overlooked since staff are already familiar with the property portfolio and can offer a wealth of experience. To obtain best value, it is important to bring work and management practices onto a modern commercial footing and this is an area where external service providers can be particularly effective in mentoring an existing DLO in order to achieve best value.

Clearly this also has social benefits in terms of retaining an existing local workforce and is less disruptive than a TUPE transfer to the new service provider.

Beyond the immediate planning and implementation of the maintenance strategy, further efficiencies can be obtained by sharing of resources, facilities and procurement arrangements. This can be particularly effective in local authorities were opportunities exist for collaboration between, housing, education and corporate departments but the scope for similar arrangements between RSLs and Local Authorities should also be investigated and there is now considerable impetus for this type of strategy under the Total Place initiative.

This becomes particularly significant in view of central governments current consideration of major reductions in its property portfolio. It is estimated that total book value of public sector assets is in the region of £370 billion nationally with annual running costs in the region of £25 billion. In reality, there are likely to be significant areas of potential property collaboration between various central and local government agencies.

This strategy has evident potential for reducing overall operating costs and, in some cases also offers the prospect of increased capital receipts from property disposal, although returns are obviously currently less than before the recession. To some degree returns can be improved by vacating property that is of higher commercial value due to its age and location and careful examination of the relative value, operating cost and functionality of property assets is therefore essential.

This process also offers the opportunity to review the suitability of surplus property for housing needs. Clearly this would need to be considered on a case by case process but may offer a way to increase housing provision despite the reduction in budgets available for new build.

Similarly, the opportunity also exists to extend procurement to cover multiple bodies, including different departments within local authorities, RSLs and government agencies. In particular, economies of scale tend to be realised where the supply chain is required to service larger though-puts of work, whether it be stationary supplies or new boilers. As such, collaboration between agencies and service providers to integrate supply chains offers the prospect of achieving significant costs benefits which would not be available to a number of separate smaller contracts.

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.

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!

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!

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.

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.

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.

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:-

1. The bids of other tenderers over which the council considered confidentiality could be claimed
2. Material - including model answers to interview questions - which, if disclosed, the council considered would prejudice its ability to re-run the procurement.

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
The court’s approach suggests extensive disclosure would be required in such challenges. The Court was indifferent to the council’s protests that it would be difficult to re-run the procedure; it suggested only a proper interview process would overcome such difficulties.

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:-

1. Would ‘prompt sheets’ not be a better option?
2. Have all people involved in the procurement been fully trained in the role and tasks they are required to undertake?
3. Do your procurement processes set out clearly documentation (such as evaluation methodology) which is required to be available prior to issue of tender documentation?

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?
To date, we have procured over £2billion of public sector contracts in housing, education and healthcare. We specialise in the procurement processes and achieving transparency and efficacy. Our processes are robust and knowledge is passed to clients through capacity building to ensure that they could run a similar process themselves. We maintain close links with legal teams to maintain up to date knowledge and ensure that all processes we are involved in are compliant from Day 1. We are also members of relevant bodies such as CIPS. Should you wish to discuss this article or any elements of its content, please contact tenders@cameron-consulting.co.uk and someone from our team will get in touch.

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.”
Tony Kemp, Divisional Director, Apollo

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.

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.

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.

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.

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.

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.”
Ian Cann, Community Investment Manager, Kensington Housing Trust

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
• Target Cost
• Hybrid pricing

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.

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.

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.

United Kingdom Accreditation Service (UKAS)
UKAS is the only United Kingdom accreditation body in the field of Quality Management actually recognised by Government. UKAS operates in strict accordance with agreed international standards and under a Memorandum of Understanding with the Department of Trade and Industry. It is also subject to peer assessment by other recognised international accreditation bodies under the terms of a Multilateral Recognition Agreement. Most importantly, companies who are certified by a UKAS accredited certification body are the only ones who may display the ‘Tick & Crown’ logo on their certificate and on their publicity material. It is the ‘Tick & Crown’ logo which provides visual assurance to the clients who require their suppliers to hold a UKAS accredited ISO 9001:2000 certificate.

Making the grade - Contractors

• Have you checked the validity of your certificate or certification programme? Obtain a list of UKAS accredited certification bodies here.
• Does your certification match up with the areas in which your business carried out work i.e EA28 Construction
• Is your assessing body accredited to carry out accreditation in your require field?
• I’ve just realised that my accreditation isn’t UKAS accredited
• We don’t have ISO9001 yet - how do we make sure that we use UKAS assessor?
• We’re half way through becoming ISO9001/14001 - what additional information can we provide at PQQ to ensure that we achieve a score within the Quality Management Section?

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
Do you check the QMS of your suppliers annually? Are you ensuring that they are correctly accredited?

• The list of accredited certification bodies is listed under the title ‘Accredited Bodies’ on the home page of UKAS. Clicking on the title Certification bodies on this page will open the UKAS Directory of Accredited Third Party Certification Bodies in PDF format
• Does their certification have ‘the tick and crown’
• Are they accredited in the areas they are/proposing to work for you in?
• Is the certification still valid?

The certification is not valid - what can I do?
Some certification bodies are either non-accredited or accredited by an accreditor who is not recognised by the UK Government. These bodies offer a service that may be cheaper than a UKAS accredited certification body and usually offer a package that combines consultancy with certification. Many offer to provide their services on a ‘no certificate - no fee’ basis, but, this offer should be viewed against the fact that a certificate is rarely, if ever, refused. It is invariably received together with a quality manual which may, or may not, reflect the operations of the SME. It is certainly no guarantee that a robust quality management system is in place, nor that the QMS would pass an accredited certification process. This practice is contrary to the requirements of the international standard with which UKAS accredited certification bodies are required to comply.

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)

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.

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.

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:-

• Preliminary Contact – The Mediator makes contact with the disputing parties to outline the process of mediation and to gather information to prepare the Mediation Agreement governing the terms of the process of mediation;
• Written Submissions – Parties to the Mediation Process submit their written summaries of the case (without prejudice) to the mediator;
• Initial private meetings – Brief meetings on the day of mediation to establish protocols for the day and address any initial concerns;
• Joint meeting/Opening Statements – The Mediator outlines the process of mediation, which is followed by opening statements from the parties. Key issues for resolution may be defined;
• Private and confidential meetings – Key issues are explored. The Mediator may convey feelings between parties. The mediator may act as a negotiator between the parties as settlement approaches;
• Joint meeting/Conclusion – As settlement approaches it may be necessary to conduct joint meetings to focus the parties on the key issues
• Settlement – When the parties have reached agreement, a Settlement Agreement and Tomlin Order is prepared which sets out the terms of the agreement and also to ‘stay’ further legal action.

‘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.

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.

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?
Train to Gain is part of the Governments Solutions for Business, a wide portfolio of highly targeted, publicly funded business support products and services, designed to help eligible English businesses grow and succeed.

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.

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
• Open Book
• Cost Plus

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.

The arguments for are multiple including:-

• Potential savings of £2.5m on non-exec directors if PCT’s were scrapped in London
• Service providers would be more accountable as discrepancies between services would become more obvious i.e older people being passed between social care and the NHS would not be cost beneficial to either party and would be actively discouraged
• Supply chain improvements would lead to more competitive suppliers and better monitoring of overall service
• Seamless care provision
• Reduction in health inequalities could be much simpler and easily achieved by the healthcare providers actively working in partnership with social care, leisure centres, education and housing
• Layer of costly administration stripped out
• Reduction in duplication

However, with everything there will always be arguments against:-

• The ‘transformation’ could impact the local population negatively while restructuring takes place
• Anticipated objectives may not be met leading to lack of belief in the leaner organisation
• Relying on a singly procured supply chain could lead to service failure if any of the supply chain fails without contingency being in place

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.

What is PRINCE2?
PRINCE2 (PRojects IN Controlled Environments) is a process-based method for effective project management that navigates you through all the essentials for running a successful project.

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.

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.

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.

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.