Procurement for all july 2011 with cover

BUILDING DESIGN &

CONSTRUCTION THE MAGAZINE FOR THE CONSTRUCTION INDUSTRY

ISSUE 165

DANIEL CONTRACTORS LTD

CUSTOMER SATISFACTION GUARANTEED ALSO INSIDE: PROCUREMENT FOR ALL BABCOCK INTERNATIONAL THE COMSERVE GROUP THOMAS ARMSTRONG TUBECON and much more...

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PROCUREMENT: FOR MEMBERS,

BY MEMBERS

Building Design and Construction magazine spoke with PFA Managing Director Keith Armstrong about the consortium’s first five years in existence, its successes to date and its aims for the future 72

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n 2004 the British government appointed Peter Gershon to carry out an efficiency review of the UK public sector.

Gershon was tasked to review all public sector operations to formulate recommendations about where savings could be made.

His report advised that dramatic changes should be made to the organisation of each government department and the streamlining of work patterns in order to release resources for the public sector budget that was at the time £520 billion.

Following Gershon’s review of the systems in place at the time, it was believed, once his recommendations had been activated, that gross savings of around £21 billion could be achieved. The longterm effect of this review saw all government departments commit to a reduction in their budgets without hindering their obligations and service.

One area that became a focus of budgetary efficiency was procurement in the social housing sector.

As a consequence of Peter Gershon’s review,

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Procurement For All Limited was established by a registered social landlord in Bradford as a joint venture between Accent Group, M3 Housing and Rands Consultancy. It was devised as a way of looking at procurement through collaborative buying in order to achieve the best prices and ultimately push costs down. Driven by Gershon’s belief that the public sector should be getting more for less or the same (for example, 1000 kitchen units costing £3 million to install when bought individually, may cost £2.6 million when bought as a group, therefore securing a significant saving that could be used to make the total budget go further), PFA was established to oversee collaborative procurement, providing a comprehensive service to facilitate this for its members.

WHAT IS PFA Word of mouth regarding the joint venture between Accent Group, M3 Housing and Rands Consultancy quickly spread. Leeds Federated Housing Association, which saw the collective

buying benefits generated by the consortium, got involved to pool procurement requirements across four members. Within a short space of time, membership numbered six. Today, the PFA has 14 members.

PFA is a former National Change Agent (NCA) consortium for registered social housing providers.

Owned by a group of member organisations, PFA oversees procurement for housing stock across the UK. With a focus on its member’s requirements driving the way it operates, PFA exists to fulfil the motto: “Procurement for members, by members.”

It therefore actively encourages members to have significant input in procurement processes from initial stages to implementation.

PFA is run by just two staff – Managing Director Keith Armstrong and Member Services Manager Siobhan Masters.

“Because we are a small team we are quite diverse in how we operate with the members. That gives us a great insight into how they operate and

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how they are looking to access the procurement frameworks. We can therefore react very quickly to any particular changes,” says Managing Director, Keith Armstrong.

THE SERVICE PFA manages the collaborative procurement process of works and services for its members. Implementing OJEU (Official Journal of the European Union) framework agreements, the team ensures members’ requirements are met within those categories. PFA covers all aspects of capital works, reactive maintenance and cyclical maintenance. Research with its members has shown PFA is a low cost procurement solution, which delivers added value, including higher levels of contract service standards, extensive procurement support, performance management and total peace of mind that OJEU compliance has been followed.

The driver for PFA is its members, acknowledges Keith. “PFA engages and adopts to member needs. The members see themselves as a core group, sharing best practice in procurement and contract delivery, and as such also support the strategic direction in how the consortium wishes to develop and grow over the next couple of years. As such, members have bought into PFA. Members usually have five years of spend commitment or as much as they can forecast ahead, in terms of spend, but in addition we utilise the members as advocates of PFA, so they help us go out and sell the consortium.

Because they are actively involved in the procurement process, OJEU compliance and mini competition tendering - they have bought into the ethos of collaboration.

“It says a lot that we’ve got an annual commitment of £40 million worth of spend from our members because if we weren’t giving value for money by collaborating

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together, they wouldn’t put the spend to the agreements, they would go elsewhere,” adds Keith.

BENEFITS OF PFA Through collective buying power PFA strives to achieve savings for its members in line with the NCA national consortia average of 11 percent. However, members have reported savings as high as 23 percent compared to previous costs for the same services. Recent reviews have indicated an average of 18 percent savings across the membership.

Keith stresses that financial savings through the procurement of contracts is not the only cost reduction as back office efficiency savings are made in terms of not having to follow a separate OJEU procurement process. “We haven’t got 14 individual contracts, and we haven’t got 14 individual procurement teams managing the procurement process – there’s one,” he says. “So there’s actual efficiencies in going out and buying these commodities together in terms of the non-cashable effect of not having 14 individual procurement managers securing contract deals.”

The consortium is expected to turnover in excess of £40 million this year, which makes the average member spend approximately £2.85 million. “We are known by members as their committed procurement route of choice – that is the strap line that they have come up with,” says Keith. “The board (which consists of six of the members, all of who are chief executive level individuals or similar) oversees strategic direction. This is important because they have a unique perspective and they encourage their operational staff – ie. their asset

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management teams, to seek procurement of assetrelated commodities through PFA before they use any other avenue to procure through.

“Needless to say, members do always come to us and we always find a solution for their particular issues. If a member cannot procure through PFA we look to do a deal with them outside of the consortium where we will carry out the procurement process on their behalf. This means they do not have to get a costly consultant in to complete the process. So again that is another efficiency saving.”

Keith explains that through PFA the members receive a range of added-value benefits that go beyond simply cost savings. A key area is OJEU legislation that governs the way public money is spent by local authorities, NHS Trusts, the Ministry of Defence, central government departments and educational establishments.

“We have 14 members at the moment. They are committing 80 percent on average of their asset management programme to PFA, and procuring through us. That in itself is a significant achievement, we must be doing something right for them to commit that amount,” says Keith.

EXPERTISE “The procurement process itself is managed by the members in terms of its content,” says Keith, as he discusses the merits of the member-driven organisation. “PFA will ensure that the OJEU process is adhered to but we use our own expertise in terms of the content because Siobhan and I are from the sector, we both have a construction and property invest-

BUILDING DESIGN AND CONSTRUCTION MAGAZINE

“WE ARE KNOWN

BY MEMBERS AS THEIR COMMITTED PROCUREMENT ROUTE OF CHOICE – THAT IS THE STRAP LINE THAT THEY HAVE COME UP WITH.” KEITH ARMSTRONG MANAGING DIRECTOR

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making the difference Health and Safety Consultancy • CDM Co-ordinator Services Fire Risk Assessment • Construction Safety Management Systems • Site Safety Inspections • Safety & Environmental Management Systems • Equality and Diversity Impact Assessment • Disability Access Consultancy • Training Contractor Competence Assessment • Quality Management Systems • Audit • Project Management • Cost Management Management Consultancy • FM Consultancy

With all our electricians having an average of 19 years' experience within the industry, Complete Electrical provide all our clients with a quality service in: • Landlord Gas safety certificates • Periodic inspection reports • Portable appliance testing • 24-hour call out service • Electrical rewires • Fault finding • Central heating installation & maintenance • Boiler installations • Renewable energy solutions • Boiler servicing • CH system cleaning (power flushing)

Proud to be working in partnership with Procurement For All

www.turnerandtownsend.com Liberty Gas Group are proud to be long standing partners to the PfA Group members.

A fully integrated, whole house maintenance and compliance service provider. Delivering top quartile performance across all disciplines.

WITH LIBERTY IT REALLY IS:

ONE CALL – JOB DONE Tel: 0151 549 1910 Email: martin.kelly@liberty-group.co.uk

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ment background, and we have worked closely with the legislation for a number of years.” He added, acknowledging the experience he and Siobhan possess as a crucial factor to the success of the framework structure.

PFA utilises its members heavily for the development of the framework and PFA looks at members’ specific requirements through the mini competition process.

During the OJEU procurement process PFA liaises with members to ensure there is transparency in the process. They have their equal say into how the framework should be structured in terms of its key criteria such as the capacity of the contractor, contractor’s that can offer certain specialist skills, or conform to certain legislation.

And members are invited to sign off on each key point of the procurement process to ensure they have played their part. Keith highlights such items of the procurement process as the Contract Notices that have to be published as part of European Union legislation, PQQs, invitation to tender, and ITT documents.

Members will devise the specification of each part of the process through workshops or circulation of details for reaction and comment.

LEEDS FEDERATED HOUSING ASSOCIATION The ethos of Leeds Federated Housing Association (LFHA) has always been to benefit the community in all that it does. It was formed in 1974 by a number of smaller associations which came together to form what is now the ‘federation’. Similar to PFA, working together as a singular organisation breeds better results.

LFHA’s goal is to support people primarily through the provision of housing and related support mechanisms. Committed to providing outstanding homes and services the association works to make the places people live become places they want to stay in, and places where others will want to move into. For its homes, the

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The futures bright, the futures Forrest!! ith a 50% reduction in carbon emissions from housing in England, Wales and Scotland expected by 2050, the Government is looking to social housing providers to lead on this change with a massive 29% reduction in housing emissions required by 2020.

The Low Carbon Construction report published in November 2010 identified that one of the key barriers to retrofit is, rather unsurprisingly, funding. With an estimated £500 billion to find, some might consider large scale retrofit programmes to be a bridge too far, but Preston based contractor Forrest is demonstrating how retrofit programmes can help social landlords to generate income streams and with it an increased financial stability.

Forrest is championing retrofit programmes with their Clients, as Carbon Reduction Manager Neil Carroll explains, “A lot of social housing providers hear retrofit and think large scale expenditure, but this isn’t always the case. We’ve developed a number of propositions that can be adopted as a one hit whole house approach or as single elements, in line with the needs and budgets of our Clients. That’s really the key part of any retrofit programme, understanding the issues inherent to that particular type of housing and then gearing up a suitable proposition.”

Championing the whole house, life-time approach to green retrofitting, Forrest bring to the table a number of ‘first fix’ and ‘second fix’ measures incorporating a range of technologies.

“One of the key drivers behind our service is helping social housing providers understand the range of options that are available to them on a short term and long term basis,” explains Paul McCarren, Renewables Manager at Forrest. “Our first fix packages are all aimed at promoting energy efficiency and can be something as basic as replacing light fittings through to fitting A rated windows and doors. These sorts of measures can be incorporated into a planned maintenance programme, giving our Clients the opportunity to drive down costs by economies of scale delivered through mass demand.”

He goes onto say “Once the overall performance of the housing stock has been addressed we can then introduce a range of second fix technologies, that focus on energy generation and range from heat pumps through to photovoltaic cells and solar thermal heat systems.”

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CASE STUDY: HELENA PARTNERSHIPS

One such housing provider that has benefitted from Forrests expertise in green retrofit is Helena Partnerships, for whom Forrest completed the refurbishment of 107 British Iron and Steel Federation properties.

Steve Woodward, Contracts Manager for Helena Partnerships enthuses: “The refurbished properties have a great modern new look and are now more thermally efficient, making our homes cheaper for tenants to run, warmer and more eco-friendly.

We are really pleased our project has been internationally recognised and thank Forrest for all their hard work on site.”

Thermal efficiency testing of the completed properties are returning strong results. The thermal performance of homes has improved by over 50%, reducing the CO2 production of a typical dwelling from 3451kg per annum to 1607kg per annum, which takes the SAP rating of the individual properties from 66 to 83 (Band B).

The BISF project was recognised as an exemplar scheme when in September 2010 it was awarded a Green Apple Award by The Green Organisation, a non profit environmental group dedicated to recognising, rewarding and promoting environmental best practice around the world.

But Forrest are bringing a lot more to the table than material supply and technical expertise as CEO of Forrest, Lee McCarren explains: “Green retrofit is not a complex process but it is a multi faceted one that requires the cohesion of a number of key service providers, including contractors, Clients, certification schemes, Distribution Network Operators, energy companies, energy management and energy monitoring companies.

We are in quite a unique position here at Forrest because we’ve brought all those parties together and mapped the processes involved in a retrofit programme from mobilisation, right through the installation phase, through certification, generation and recording all the way through to exporting and payment. What this means for our Clients is a seamless process from start to finish, with transparency throughout.”

Earning, from the Government backed Feed in Tariff, a fixed income for every kilowatt hour of electricity generated and an additional income for every kilowatt hour exported and sold back to the national grid, net gains can be invested back into capital works programmes to help fund future retrofit schemes. As well as the obvious advantages to the landlords, residents are seeing the benefits in terms of reduced utilities bills and using free electricity “Residents will still have electricity bills, however by using the majority of their appliances throughout the day they can see their electricity bills reduced by as much as up to 20%,” explains Neil. “We put quite a comprehensive user guide together, helping the homeowners to become more energy efficient and use the PV installations to get maximum advantage from them. Simple things like using your washer and drier when the sun is at its highest can make a huge difference to a household’s energy consumption.”

So why aren’t more housing providers jumping on the retrofit bandwagon and going green?

“People are understandably sceptical about the range of technologies and the seemingly ‘too good to be true’ benefits,” explains McCarren. “But this agenda isn’t going to go away and inaction at this stage could prove costly further down the line. With the momentum being gathered by the Feed in Tariffs and the new Renewable Heat Incentive, this is the ideal time for housing providers to start retrofit programmes. With funding available from both the public and private sectors, we are able to demonstrate that saving the planet may not necessarily cost them the earth.”

For more information on retrofit programmes please contact the Forrest Green Team on 0845 634 2750.

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association ensures all are designed, constructed, refurbished and maintained to the best affordable standard.

Partnerships and joint ventures have enabled LFHA to continue this philosophy throughout its history. In 2006 it became a shareholder member of PFA. Its current housing stock contains around 4,000 units comprising 1 bedroom flats (29 percent), 2 bedroom flats (11 percent), two-bedroom terrace houses (25 percent) and other larger properties (20 percent).

Tammie Donaldson, Procurement Manager for LFHA, looks at PFA’s Phase III central heating and boiler installations framework that the association entered into on a four-year contract.

She says of the mini competition process that LFHA invited customers to be involved in the process by helping to develop questions for the interview, evaluating tender returns, the interview itself and site visits. She says the saving has been significant. Over four years LFHA saw savings of £109,980 per annum, which equates to a staggering £439,920 over four years.

“It was really easy to access the framework,” she says, adding that PFA provides an “easier, clearer process than when using other consortia.” For example, “It is clear in the process when members need to be involved.”

She continues, “PFA have approachable, professional and well experienced staff who can assist, provide support and advice. The consortium is a close community – we share best practice amongst ourselves to reduce duplication of effort, and work together to find better ways of working.”

NEW DEVELOPMENTS PFA recently launched its national General Build framework, awarding the contract to seven contractors after a competitive OJEU compliant process. Covering all of mainland UK, the General Build framework provides a supply of materials and labour solution to PFA members.

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Ideal for void and packaged repairs, maintenance and improvement works, the agreement sees contractors strategically located to offer the best possible service within their location. The framework will include works such as foundations, groundworks, fences and gates, drainage, brickwork/masonry, roofing, joinery, plastering and finishes, wall, floor tile and sheet finishes, painting and decorating, cleaning and clearance, glazing, plumbing, heating, electrical, disabled adaptation and minor works and specialist treatments.

Keith says, “This agreement is a catch all solution for our current members. It is a great opportunity for members to have near instant access to a wide variety of competitive OJEU compliant repairs and improvement services. These are areas that tend to get left to one side, behind the decent homes works – but PFA has now got them covered!”

Siobhan reinforces the dedication shown by PFA members, saying they have “worked very hard to help procure this agreement. This is yet another procurement solution to PFA's long list - members can truly see us as a one stop shop for easy access and competitive procurement!”

Keith challenges housing providers to view their procurement processes. “This agreement, just like all others at PFA, is available to all housing providers. Take the PFA Challenge – reduce the time it takes to procure – lets see if we can help you by working together to achieve a quick procurement solution that delivers value for money for your organisation!”

The OJEU compliant General Build framework adds to PFA’s already extensive list which includes Water Hygiene, Lifts and Hoists, CDM Co-Ordination, Disabled Adaptations, Warden Call, Gas Auditing, CCTV (including door entry, fire equipment, digital TV, portable appliance testing), Asbestos survey and removal, Domestic Electrical works including re-wires, Kitchens and Bathrooms, Gas Servicing, Windows and Doors, and Central Heating.

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rb

R.Bland Ltd

Plumbing, Heating and Building Services

R Bland Ltd is a family run business, established since 1961, therefore, this year we will celebrate our 50th birthday….

Over the years we have learnt from experience and have gradually and steadily expanded. Progressing this way has allowed us to grow from a small family plumbing business into a thriving, financially stable, and well established plumbing, heating and building company. We carry out service and maintenance contracts, heating, kitchen and electrical installations, for many local councils and housing associations, having a good partnering relationship with all of our long standing clients.

We have worked alongside, and with the Procurement for the last 5 years, gaining vast experience and knowledge within the future growing market of Procurement For All. Working closely with housing association, Accent Group, we carry out all aspects of renovation within the tenants home. We aim to achieve the highest standard of workmanship with the least amount of inconvenience to the tenant. We have always obtained outstanding customer satisfaction feedback over the years.

Procurement For All plays a significant part in our success assisting us in maintaining a steady flow of work. They do this by ensuring a fair pricing structure and allocating contracts equally to all members.

This has helped an already good working relationship to progress to a very strong partnership with a reputation of providing outstanding service to all customers and clients throughout the North East.

By employing local people and training local youths in a wide range of trades and administration courses, we have maintained a strong workforce with many longstanding, fully qualified employees and at the same time putting something back into the local community.

R.BLAND LTD: Yarm Road Business Park Morton Road Darlington DL1 4PT Tel: 01325 744960 Email: info@rblandltd.co.uk Web: www.rblandltd.co.uk

OUR SERVICES INCLUDE: • Plumbing – No job too big or small.

• Heating systems installed and upgraded.

• Service and Mainteance – 24hour call-out.

• Electrical upgrades and rewires.

• All aspects of building works.

• Disabled Adaptations.

• Kitchen Installations.

• Bathroom Installations.

• Full House Refurbishments.

• Drains unblocked by Pressure Jetting

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AS THE ENVIRONMENT BECOMES AN EVEN MORE IMPORTANT PART OF THE CONSTRUCTION INDUSTRY, PFA IS SEEKING TO ADD ENVIRONMENTAL EFFICIENCY AND SUSTAINABILITY AS A CORE PART OF ITS EXISTING FRAMEWORKS

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GOING GREEN As the environment becomes an even more important part of the construction industry, PFA is seeking to add environmental efficiency and sustainability as a core part of its existing frameworks. As part of OJEU compliance, environmental concerns are already an inherent part of the process but PFA intends to go further, utilising the new Green Retrofit Scheme to bolt on a green agenda to its existing frameworks. “This is made possible because a lot of contractors are switched on to the fact the green agenda is becoming a key priority,” admits Keith.

“We are aware that other consortia have gone out and done separate green retrofit agreements.

We are looking to tap it into what we’ve already got.

“One of our members is the chair of the Green Retrofit Scheme, which is based in Manchester and is just starting up at the moment. We are specifically going to look at this from a senior level and how this green agenda is going to have an impact on the social housing sector.”

Keith acknowledges the importance of the Green Retrofit Scheme’s findings in terms of the financial logistics of the green agenda. “If so much

has to be done within the social housing sector to meet government targets under the green agenda, where is the funding going to come from? This is what the Green Retrofit Scheme board is going to look at and how that will have an impact on housing associations.”

Keith takes LFHA as an example. It is currently looking to procure a photovoltaic solution for one of its buildings that houses both an office base and apartments for residents.

FUTURE Tendering is batched into three phases currently.

However, a fourth phase is due to come online in the near future. “This will consist of two frameworks this year,” says Keith. “One is for internal and external cyclical decorations and the other one is reactive maintenance, voids and out of hours works.

“All registered social landlords have a requirement to maintain a property. Generally, if a door handle falls off the housing association has an obligation to fix it. So reactive maintenance is a very big issue for social housing and it is a very big cost after salary costs and stock investment. It is one of a few

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areas of a housing association where a resident will monitor the service in terms of the performance.

“Basically, we are looking to procure a national agreement that will cover reactive maintenance. The board, and myself, have the firm belief that that will be the flagship agreement for the organisation because, at the moment, there is no national reactive maintenance framework in the sector.”

Looking forward, PFA may look to take on an extra couple of staff as the organisation grows, to maintain the in-depth level of service for current and future members. But Keith stresses that despite PFA’s two-person frontline team, it is perfectly placed to offer members only the highest level of service with added value on top. “If you think of a procurement consortium, you think about buying and contracts, and that is all in place at PFA,” says Keith.

“The next stage now is to deliver on the service to the members. We are very service driven, and these are the products we are now looking to sell into the members such as the mini competition process. We are going to be monitoring the performance of the contractors, and PFA will act on the poor performing contractors to support with performance improvement. We also have the capacity to procure two new agreements each year for the next five years, to ensure we offer frameworks that are up to date and relevant to members’ needs.”

Web: www.procurementforall.co.uk Tel: 0300 555 03 04

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