Supply Chain Council of European Union | Scceu.org
Procurement

Build it better: A game-changing new approach to construction procurement

For many years — decades, in fact — reviews of the construction sector have cried out for reform. 

Architects, engineers, clients and contractors have been tied into procurement models that are too adversarial and do not always have the best interest of the project at heart. 

Some reforms did happen — but none so significant as the one we are launching today at Sheffield Hallam University.

What have we done?

Together with contractors BAM, architects BDP (supported by Arup), and facilities management specialists CBRE, the University has formed an alliance. This is not something from Star Wars. It is a formal alliance structure, a partnership of equals, with a management board and voting rights, and sharing profits and losses equally. 

And it could be a radical game-changer for procuring buildings.

We commence on a five year programme that will not only transform our campus, but also have a major influence on our city. The masterplan we have is a 20-year journey. The alliance will last five years initially and even in that short span will bring about £220m of estate development and transformation.

No building we know of has been procured this way before.

The alliance contract sweeps away centuries of traditional construction contracts where, if anything goes wrong, each party can blame the other and there is a well-trodden and fast-track route to litigation.

A transparent, open-book costs approach, improved risk management, and a strong focus on dialogue, timely communication and transparency provide a basis for building mutual trust which will drive efficiencies, standardisation and continuous improvement that we are all seeking.

Our new contractual arrangement sweeps away the age-old divorce between the early design of buildings, the late involvement of a contractor, the subsequent signing-up of a supply chain, and finally the management of an estate when it becomes occupied, which is all too often an afterthought. All this we have now integrated from the very outset.

Having CBRE manage facilities brings to our mix a focus on how buildings perform when they are in use. Thus it informs our continuous collective ability to build smartly and sustainably.

Partners will work collaboratively through all stages of design, construction and operation to maximise transformation and deliver best long-term value. Mace and Fulcrum are providing scheme and programme management services. 

Long-term value is the bigger game here, getting us away from the expediency or narrow focus that can sometimes drive a development into the sidings. Formal cooperative boards require us to reach unanimous agreement, making decisions on issues on a “best for project” basis.

Having our incentives aligned from the outset is a powerful tool to achieve the sort of collaboration that is often only talked of by those developing Britain’s iconic buildings.

We kick off this very month with the first phase, focusing on the University’s city centre estate, creating a gateway to the city, transforming the campus and supporting the development of the city.

What we are doing reaches beyond our campus. We will support skills, employability and the regeneration of Sheffield. 

Our priority will be using the local supply chain, boosting businesses in Sheffield and growing our local economy. Construction, as the government knows, is an excellent way to retain the value of investment inside the UK, but it also in local economies too.

We are challenging not just the higher education sector, not just the construction industry, but companies across the UK.

This could be the way forward for us all to procure and produce well-designed, well-built and well-managed buildings. We are determined to prove that it works.

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Main image credit: Getty

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