Construction procurement framework: ProCure22
Clean bill of health
20 February 2018
David Low celebrates the success of the Department of Health’s construction procurement framework ProCure22
ProCure22 or P22 is a construction procurement framework administered by the Department of Health (DH) to develop and provide NHS and social-care capital schemes in England. It represents the third iteration of the DH framework that provides design and construction services for use by the NHS and social-care organisations.
This continues to build on the principles of its predecessors by streamlining the procurement process and helping clients, principal supply chain partners (PSCPs) and their own supply chains develop stronger partnerships, increasing efficiency and productivity while enhancing clinical outputs for patients and environments for staff and visitors. The frameworks have provided more than 850 publicly funded NHS projects at a value of £6bn over the past 15 years.
P22 is a suitable approach for the following types of work:
- service planning or reconfiguration reviews
- major works or refurbishments
- minor works, in which each task value does not exceed £1m
- infrastructure upgrades – roads, plant and so on – and non-healthcare buildings such as car parks
- feasibility studies and masterplanning.
Principles and performance
The first framework, ProCure21, was developed in response to the challenges laid down in:
- the Latham Report, Constructing the Team; this was the 1994 report on the government and construction industry’s review of the latter’s procurement and contractual arrangements
- the Egan Report, Rethinking Construction, the 1998 report of the Construction Task Force on the scope for improving the quality and efficiency of UK construction.
Both of these aimed to promote collaborative working and develop integrated teams to address the public sector’s poor performance in respect of project completion, and specifically to improve outcomes in terms of time, cost, quality and patient experience.
These defining principles still hold true for P22, where experienced, integrated design and construction teams are essential: not only are healthcare and social-care projects technically and logistically challenging, they must also be flexible to adapt and accommodate the ever-changing needs of the NHS and an ageing population.
Under P22, 852 projects have been completed with time and budget compliance consistently more than 90%. Client satisfaction has also consistently exceeded 80% and there has been no litigation on any project, saving the NHS more than £150m. This represents a step change in public-sector construction, where in 2001 only 26% of schemes were completed on time, and 28% on budget, with 3% of the capital programme being spent on litigation.
Use of the NEC form of contract on the first framework in 2002 was a novel approach for the NHS. In particular, its encouragement of proactive project management and robust risk management, with payments based on actual costs, was a relatively new concept. Clients and their advisors were typically inexperienced in using such contracts, necessitating significant training and development to support them. Over the years and frameworks, their expertise and knowledge has developed exponentially, reflected in improved performance.
Nevertheless, use of NEC3 during the pre-construction phase with associated activity schedules can still present a cultural challenge for designers and others new to the framework. As a consequence, there is an ongoing training provision for clients, stakeholders, PSCPs and their supply chains, provided by the DH. A recent addition to this is e-training, available from the P22 online portal.
Other key features
P22 has enhanced the best features of its predecessor frameworks, offering a fast-track, compliant route to market for clients, as well as benefits such as:
- free usage
- free VAT advice service
- free training and implementation support
- free access to and use of design
- information from previous projects
- free use of award-winning repeatable room designs
- post-occupancy evaluation and project-end review templates
- proven contract templates, developed and improved over 15 years.
Clients will manage their own framework projects, but will follow the proven procurement process and P22 contract template, which is based on and complements NEC3 Option C. Both process and contract templates are bespoke, to mirror the NHS business case approval process, allowing clients to ensure their projects remain on budget at each stage. There are break clauses, without penalty, throughout the design and development pre-construction period.
Clients use the process and the partnership with their supply chain to ensure as much value as they can, often establishing long-term relationships with them to add value on their objectives. When a final design is agreed, costed and market-tested, the PSCP and client agree a guaranteed maximum price (GMP) for the project, limiting client liability to price increases, risk and poor performance.
P22 uses a pain–gain process that provides incentives for both parties to work collaboratively to minimise costs. If the scheme is completed below the GMP then the PSCP and client split the first 5% of the underspend – the gain – taking half each. Savings in excess of 5% of the GMP go 100% to the client; conversely, the PSCP share for anything more than 100% of the GMP is 100% – that is, the PSCP takes the pain.
This programme was a particular highlight of the P21+ Framework. It involved expertise from each PSCP and their primary supply chain designers, prioritising the most common rooms in hospital designs to produce exemplary, evidence-based designs that could be adopted and repeated nationally. This has resulted in savings in design and construction cost and time, and an increase in off-site prefabrication. It also means that staff become familiar with the layout of and equipment in a room, which in turn improves safety and the quality of patient care. NHS trusts that use repeatable rooms have saved time with clinical approval and sign-off due to the rigorous development process.
The repeatable room development process has involved many stages, to ensure a robust evidence-based design. Literature and design reviews have been compiled, with patient workshops adding a user perspective to emerging best practice. Expert review panels were convened, with representatives from the Royal Colleges, the NHS and the construction industry, to comment on the initial design proposals. A series of technical reviews were undertaken to test the designs, using real-life processes and full-size mock-ups.
From a standing start, the P21+ programme developed 11 repeatable rooms for the acute sector in 18 months. These have been followed by repeatable bedroom designs for functional and organic mental health conditions, and accompanying components suitable for mental healthcare environments.
Along with the repeatable rooms, a range of standard components, based on those most commonly recurring in hospital designs, has been developed in conjunction with suppliers, following a competitive process. This provided cost-effective facilities for hospital projects that also complied with DH building notes.
Many standard component agreements offer additional benefits such as extended guarantees and savings of up to 30%. The latest round of standard component agreements are in the procurement stage with suppliers, and will be in place when the current agreements expire. These current supplier agreements cover a range of products, such as:
- hard and soft flooring
- suspended ceilings
- sanitary ware
- doors and ironmongery.
The Construction News Awards 2016 recognised the collaboration undertaken to develop the repeatable rooms and standard components, and after review by a panel of 70 expert judges, Procure21+ won the Supply Chain Excellence award. The judges commented:
'The focus on reaching all parts of the supply chain, as well as customers, hospital staff and patients, is both innovative and market-leading. Through collaboration, the team of PSCPs has been able to add value, improve design and eliminate waste to deliver outstanding results.'
The DH construction procurement team has worked closely with other government departments under the Government Construction Strategy (GCS) 2010–2015, where it saved 15.1% on capital construction costs, and this work continues under the current strategy. Many of the initiatives such as repeatable rooms and standard components formed a key part of the DH’s action plan under the GCS, and this work will continue.
A current priority for the construction procurement team at the DH is to embed building information modelling (BIM) Level 2. Although the framework strives to provide a streamlined and consistent approach to BIM, making it easier for clients and industry alike to adopt new digital information opportunities and efficiencies, it does remain one of the more significant challenges.
David Low is P21+/P22 Cost and Policy Manager
- Related competencies include Client care, Contract practice, Design economics and cost planning, Procurement and tendering, Programming and planning
- This feature is taken from the RICS Construction journal (February/March 2018)
- Related categories: Procurement, Procurement strategies, Tendering and procurement case law