Procurement pilots set to save contractors and supply chain SMEs £25m
CITB and construction employers are piloting four schemes to improve procurement practices for homebuilding and infrastructure projects set to achieve £25m savings.
The Improving Performance Through Better Procurement Approaches commission will see just under 12,000 construction workers trained, half of which to be from small and medium-sized enterprises (SMEs), within the housing, infrastructure and local authority-led construction sectors in England, Scotland and Wales.
The four pilot projects are set to receive £3m in funding in total, but are expected to achieve £25m in savings, involving 1,900 construction employers and focusing on collaboration to mitigate risk, as well as an emphasis on quality and whole life outcomes, not just time spent.
Sarah Beale, CITB Chief Executive, announced the four schemes during the Lean Construction summit on 9 October.
She said: “With ever-rising costs, it’s vital that we exploit and highlight the gains that more efficient procurement can bring to construction through driving up productivity. These pilot projects will explore good practice that can be shared to support homebuilders and civil engineers, training that is set to deliver substantial cost savings.”
The four projects are as follows.
The Supply Chain School will develop Continuing Professional Development-accredited training courses and online resources during the next three years, plus tools to assess training needs and track performance. Training will be provided to 740 construction companies working on homebuilding and infrastructure sites across the country, with £5m in savings expected to be achieved by this project.
The project partners include homebuilders Barratt Developments; Bovis Homes; Building Better Homes; Morgan Sindall; Taylor Wimpey; Telford Homes and Wates Group, along with The Construction Leadership Council; Laing O'Rourke; Skanska; John Sisk & Sons; Sir Robert McAlpine; Kier; King's College; and the South East & Mid Wales Collaborative Construction Framework.
Andrew Day, Sustainability Director for Telford Homes, said: “This funding is great news for the house building sector. Telford Homes Plc like many other house builders and developers rely on our supply chain to build homes and mixed-use developments of high quality. This funding will enable us to collaborate better with our suppliers and peers to build more homes to the highest standards.”
The Civil Engineering Contractors Association (CECA) will create a training syllabus in how to boost productivity, including through digital transformation, partly based on the industry-led Project 13 business model.
The project partners are: Sir Robert McAlpine; Kier; BAM Nuttall; Galliford Try; Costain; Skanska; Geoffrey Osborne; Balfour Beatty; Tarmac; Clancy Docwra; Taylor Woodrow; Laing O'Rourke; HW Martin; McGee Group; Mitie Association for Consultancy & Engineering; Pinsent Masons; Arup; CA Blackwell; Jacobs; Nichols Group; Aquam Corp; Bentley Systems; Mark Bezzant; Glenn Hide; Schulmans; Fenwick Elliott; Driver Treet; Robert Bilbrough Associates; and Skyblue.
Alasdair Reisner, Chief Executive of CECA, said: “CECA is delighted to be working with CITB to help deliver this scheme which mark the first steps in the journey towards driving notable efficiencies and innovation in projects for the long term.
“Our sector has historically suffered from low profit margins, which for some companies, can be as little as 0.7%. As such, any initiative to enable industry to recoup additional revenues for reinvestment is extremely welcome and the commission’s work aligns itself with the new models of delivery our customers are starting to adopt.
“These delivery models are focused on the benefits that can be achieved through long-term relationships, driving innovation and improving productivity and CITB’s commission plays a vital role in achieving this.”
Over the next three years Nottingham Trent University will focus on enabling Tier 3 and some Tier 2 suppliers in supply chains, mostly SMEs, to contribute to innovation and value.
The project will be tested on three live construction projects and the university’s partners are Morgan Sindall and Midlands Constructing Excellence. Learning will be shared by bringing together the supply partners involved.
BAM Nuttall will work with the Lean Construction Institute; Mace; Skanska; Galliford Try; and Costain during the next two years on three Highways England schemes.
A total of 1,200 construction workers will be trained through this project, and a competency framework, training credits system, skills standards and learning resources will also all be made freely available.
Research undertaken by the Institute of Civil Engineers in 2017 found that current fixed price, cost-focused, low margin procurement approaches as wasteful, hindering productivity and innovation, and failing to use technologies that benefit other sectors, leading to delays and budget over-runs.
Compared to margins of 19% in the services industry and 12% in manufacturing, construction is behind other sectors.