Introduction and Executive Summary

Over 2,000 public sector construction frameworks are currently active, some of which deliver improved value and enable excellent project outcomes while others are less ambitious and less successful. Clients and suppliers urgently need a Gold Standard to help them identify what questions they should ask when creating and implementing construction frameworks, what answers they should expect and how they can make informed decisions.

In February 2021 Lord Agnew, Minister of State at the Cabinet Office and HM Treasury, announced my appointment to lead an objective, independent review of public sector construction frameworks: https://www.gov.uk/government/news/launching-the-ndependent-review-of-construction-frameworks.

The Cabinet Office announcement stated that: 'This review recognises the potential of frameworks as a powerful engine-room for implementing Construction Playbook policies that include strategic planning, integrated teams, continuous improvement and the delivery of better, safer, faster and greener project outcomes.

The Framework Review will lead to recommendations for:

■ the components of a 'gold standard' against which new proposed frameworks and framework contracts can be measured

■ standard contract terms that support the new gold standard

■ training packages to enable adoption of the new gold standard

This will enable contracting authorities to easily identify those frameworks which meet best practices and embody the policies set out in the playbook.

The Construction Playbook was launched on 8 December 2020 containing 14 key policy reforms to enable 'faster, better, greener' construction by transforming how we assess, procure and deliver public works projects and programmes.

One of these key policy reforms is 'Effective Contracting', designed to ensure that contracts are structured to support an exchange of data, collaboration, improve value and manage risk with clear expectations for continuous improvement and consistent with the principles contained within the Construction Playbook.

The Construction Playbook contains a commitment to undertaking a review of current construction frameworks, this is integral to achieving the aims of effective contracting.

Commercial frameworks have been proven to provide a powerful tool for strategic planning, integrated teams, continuous improvement and the delivery of better, safer, faster and greener project outcomes. Across the public and private sectors, there are a wide variety of frameworks and a lack of clear guidance as to their preferred structure and 'best practice' features. As a result, the potential of frameworks is not always well expressed or well understood and they are not always successful in delivering their aims.

Recommendations for the adoption and use of the most suitable framework structures and features are necessary in order to provide clear drivers that will deliver the policies set out in the Construction Playbook.'

I am very grateful for the review contributions provided by 20 major framework providers and over 100 clients, suppliers and advisers. They have highlighted construction framework practices that drive successful outcomes and others that impede progress, including varying levels of leadership, professional management and client commitment. They have shown how Gold Standard framework providers and clients should take the lead and invest in framework strategies, procurement, contracts and management that deliver demonstrable value for money. They have also shown how Gold Standard suppliers should support frameworks through shared commitments to improved outcomes and transparent professional practices.

Construction frameworks are widely recognised as the best medium through which procurement and contracting can deliver transformational improvements, overcoming the 'Groundhog Day' of lost learning from one project to the next. This review does not suggest a single kitemark or a box-ticking approach to Construction Playbook compliance. It provides 24 Gold Standard recommendations with detailed supporting actions designed to improve the outcomes delivered by framework strategies, procurement, contracting and management and to avoid the pitfalls of bureaucratic and inconsistent practices.

Significant cost and time are wasted by public sector clients and bidders procuring multiple, speculative construction frameworks that are not connected to specific pipelines of work. Review participants report average bid costs for each major framework of over £247,000 for contractors and over £130,000 for consultants, with a maximum of up to £1 million in each case. These costs, and the procurement costs incurred by clients, will be substantially reduced if government and industry clarify the scope of each framework and if they adopt a new Gold Standard for selection questionnaires, evaluation criteria, framework contracts, outcome-based performance measures and incentives.

Contractors and consultants report uncertainty as to how public sector construction frameworks provide the long-term opportunities that are needed to drive improved value. Transformational change will only come if Gold Standard frameworks create aggregated and harmonised programmes of work, and if they attract new commitments to improved value for money, efficiency, safety, social value, net zero carbon and whole life value.

The framework contracts shared by clients and framework providers include high-level objectives that reflect a range of Construction Playbook policies for improving value and reducing risk. However, most of these framework contracts do not include the detailed machinery through which clients, suppliers and supply chain members can translate their high-level objectives into agreed actions with clear timescales and expected outcomes.

Framework contracts will not fulfil their potential if they govern only call-off, measurement and administration. Review contributors support a Gold Standard framework alliance contract that is collaborative, outcome-focused and flexible, with processes that drive improved value and integrate the work of framework providers, clients, managers, suppliers and supply chain members. They support contractual commitments to early supply chain involvement (ESI), digital technologies, modern methods of construction (MMC) and joint risk management. Contributors also highlight the importance of government-led training on new framework procurement and contracting practices so that Playbook reforms are not lost in the 'Bermuda Triangle' of idealistic debate, cynical criticism and unrealised good intentions.

For example, review participants report that ESI improves value for both clients and suppliers but that many clients do not adopt ESI for framework call-off when consultants unconnected with the framework advise a single stage, lowest price approach. Gold Standard framework providers and clients need to ensure that consultants use all the systems by which Playbook policies deliver improved economic, social and environmental value. These include project level ESI and also framework level ESI through contractor-led 'Supply Chain Collaboration'.

This review is designed to help clients and suppliers to measure Gold Standard frameworks against Construction Playbook policies and to ensure that their framework strategy, procurement, contracting and management practices deliver:

■ Better, safer, faster and greener outcomes from projects and programmes of work

■ Net zero carbon and social value targets through agreed joint actions

■ Improved safety through whole life value and optimal use of digital information

■ Industry investment through aggregation, standardisation and optimal use of MMC

■ Improved efficiency and innovation through strategic use of ESI

■ Improved contributions from SMEs, including local and regional businesses

■ Efficiency savings for clients and industry through consistent, transparent documents

■ Savings for clients and industry through collaboration and dispute avoidance.

This review shows how clients and suppliers can create and implement a Gold Standard framework alliance contract which includes:

■ An outcome-based strategic brief that drives economic, social and environmental value with strategic supplier proposals for delivering that brief

■ Multi-party relationships that align objectives, success measures, targets and incentives with commitments to joint work on improving value and reducing risk

■ A timetable of strategic actions to improve integration, value and outcomes, for example using MMC, digital technologies, ESI and Supply Chain Collaboration

■ Transparent costing, call-off, performance measurement and incentives that provide a fair return for suppliers and drive value rather than a race to the bottom

■ Framework management systems that support collaboration and dispute avoidance.

This review illustrates how clients and suppliers can create and implement collaborative Gold Standard action plans under their current frameworks, for example using supplemental framework alliances to convert their improved value objectives into agreed systems and timetables that deliver better, safer, faster, greener projects and programmes of work.

With the support of cross- disciplinary training, practical guidance and shared experience, Gold Standard construction frameworks will fulfil their potential as a powerful engine- room for improved value, reduced risks and excellent project outcomes.

Professor David Mosey

Centre of Construction Law, King's College London