Frameworks without dedicated pipelines of work are essentially speculative lists of suppliers available for rapid call-off. They are a shortcut to project procurement, but they do not provide clients or industry with the means to improve value and reduce risk by implementing Construction Playbook policies. Major investments are made by industry when bidding for frameworks, and a place on an approved list is a poor return on these investments.
The Playbook requires that contracting authorities publish their plans for commercial pipelines of work, and states that 'Published commercial pipelines should look ahead three to five years to be truly effective' (p.14). Frameworks provide the contractual medium through which to create confidence and credibility in relation to committed and prospective pipelines of work and keep them up to date.
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Crown Commercial Service reports that ' the lack of pipeline visibility across public sector reduces contractors' ability to plan and diminishes ability of clients to collaborate. CCS provide: ■ Pipelines of registered projects, updated systematically as part of framework processes by a dedicated Construction category team ■ Weekly updates of projects status and procurement dates as a shared pipeline on a web platform for accessible, centralised pipeline management. This enables clients to find synergies and collaborate either through information-sharing, or at a deeper level, through multi-party integration via FAC-1'. |
The Playbook undertakes to create a new central government procurement pipeline for public works projects in order to 'enable a diverse selection of suppliers to prepare for upcoming opportunities and develop better, faster, greener ways of delivery' (p.14).The January 2021 Infrastructure and Projects Authority Mandate commits to publish 'regular procurement pipelines and National Infrastructure and Construction Pipelines to improve market visibility of demand and increase market confidence'. It requires departments to 'provide procurement and pipeline data to the IPA to support the publication of Procurement Pipelines and National Infrastructure and Construction Pipelines'.
It is not necessary for framework providers and clients to make unconditional promises in respect of their pipelines of work, but it is essential to their credibility that framework strategies, procurements and contracts provide as much information as they have available. The construction industry knows full well the constraints created by funding cycles, regulatory consents and intervening changes in client circumstances, and they can still invest in frameworks that identify these as preconditions. What the industry needs is for framework providers and clients to have the confidence to share the following information:
■ Their planned pipelines of works, services and supplies and the specific frameworks through which they will be procured
■ The known funding cycles, regulatory consents and other preconditions that could affect all or part of each pipeline of work being procured
■ The minimum values and types of works, services and supplies that are committed to a framework and the procedures governing those commitments
■ Any exclusivity created by the award of places on a framework and the procedures that govern any adjustments to that exclusivity.
The confidence of framework providers and clients to provide clarity on these matters will create industry confidence in their credibility and will attract increased market interest, commitment and investment.
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Recommendation 8: Avoid wasted procurement costs and improve supplier commitments by ensuring that frameworks offer sustainable pipelines of work In response to industry concerns regarding the significant cost and time wasted by clients and suppliers in procuring speculative frameworks, and in order to optimize competitive bids and strategic commitments from prospective suppliers, this review recommends that framework providers and clients make clear in all their framework procurements the pipelines of work to which they commit and the preconditions to implementing those commitments. |
Specific actions include:
Framework strategy
■ Consider and establish the commercial pipeline of works, services and supplies to which the client or clients can commit through the framework, and the factors and preconditions that limit those commitments.
Framework procurement
■ State the clients' commitments to procure a commercial pipeline, state the factors and preconditions that limit those commitments, and evaluate the suppliers' capacity, capability and proposals for delivering that pipeline subject to those factors and preconditions.
Framework contract
■ State the clients' and suppliers' commitments to a commercial pipeline, and the factors and preconditions that limit those commitments.