'Faster, greener' public construction pledged by UK government

Out-Law News | 16 Dec 2020 | 10:14 am | 4 min. read

The UK government will take a longer-term, output focused approach to contracting for future public works, using digital technologies and standardised designs to improve efficiency.

The new 'Construction Playbook' (83-page / 2.7MB PDF), developed in consultation with the construction industry, sets out the government's approach to, and expectations of, future public works projects including roads, railway lines, schools, hospitals and prisons. The UK government is the construction sector's largest customer, with public sector works accounting for around £117 billion worth of work in 2018.

The guidance emphasises the role that the construction sector will play in both the recovery from the coronavirus pandemic and meeting the UK's target of net zero greenhouse gas emissions by 2050. Projects will also be expected to promote social value, and incorporate improved standards of building and workplace safety.

Infrastructure law expert Jon Hart of Pinsent Masons, the law firm behind Out-Law, described the document as "a really useful addition to the public procurement toolkit for construction contracts for those who have responsibility for development projects and, for those who are bidding, a useful reference for work as to what 'good' should look like".

"The guide is obviously a product of careful consideration of what has worked well from the Outsourcing Playbook and extensive consultation with the industry," he said. "It fills a real gap in government guidance in the construction sector."

"The document is a repository of how it should be possible to 'build back better'. It chimes with some of the ambitions set out in the National Infrastructure Strategy but, like the strategy, is going to be faced with the challenge of practical implementation and commitment from procurers to take account of - and be held to account in respect of - its features," he said.

"There are a number of things which are striking about the Playbook. Particular items to highlight are the increased focus on sustainable pipelines and longer-term contractual arrangements as a way of driving down costs and increasing efficiency. Also notable is the championing of modern methods of construction and use of technology. Perhaps of special interest for many bidders is the reference to the use of standardisation in relation to contract terms and limiting the use of changes to drafting, and commitment to use of the Conflict Avoidance Pledge," he said.

The document is based around 14 best practice policies which should be considered throughout the life cycle of a particular project or programme. Central government departments and arm's length bodies will be expected to comply with the policies, which will be enforced through government spending controls, or explain why they have not. The guidelines are not mandatory for the wider public sector, although their use is "encouraged".

A new central project procurement pipeline will be developed to support individual contracting authorities' commercial pipelines, enabling suppliers to better understand the government's long-term needs. Longer-term contracting across 'portfolios' of projects will be encouraged, although contracting authorities should be able to demonstrate that this does not come at the expense of an innovative and competitive market.

Demand across individual projects and programmes will be harmonised, digitised and rationalised by contracting authorities, accelerating the development and use of platform approaches, standard products and components. Contracting authorities should use the UK Building Information Modelling (BIM) Framework to standardise their approach to generating and classifying data, data security and data exchange, and early involvement from the supply chain should be encouraged.

Contracting authorities should focus on outcomes, rather than scope, in their specifications. A new 'Project Scorecard' is being developed by the Cabinet Office to support contracting authorities in setting clear outcomes that align with the government's strategic priorities. Benchmarking and cost models using information from past projects and programmes should be used to allow contracting authorities to make more informed and intelligent investment decisions.

Authorities must also assess the economic and financial standing of their suppliers in line with minimum standards as part of the selection process, while suppliers on "critical" public works contracts will be required to provide resolution planning information to be used in the event of insolvency. Risk allocation proposals, payment mechanisms and pricing will be subject to greater consideration and scrutiny to ensure that they incentivise desired behaviours.

All contracting authorities should set out their strategies and plans for achieving net zero greenhouse gas emissions across their entire portfolio by or ahead of 2050. These should be aligned under an overarching sustainability framework, with systems and processes put in place to ensure targets are met. Contracting authorities should adopt the use of standardised 'whole life' carbon assessments to understand and minimise emissions throughout the life cycle of their projects. Achieving sustainable outcomes should be considered alongside the net zero commitment.

Environment and climate change expert Stacey Collins of Pinsent Masons said: "There is a clear intent for lower greenhouse gas emissions – particularly carbon dioxide – to be a thread that runs through procurement, contract delivery and post-delivery assessment".

"However, contracting authorities may wonder where the tools are to help them deliver on the government's vision to 'build back greener'. It appears that one of the key documents - the 'Project Scorecard' that will include templates, guidance and training - is being trialed, but is not yet available, and neither are the new standard 'model clauses' the Playbook refers to," he said.

"Some contracting authorities are already giving prominence to solutions with lower greenhouse gas impacts in their tender documents and contracts - there is a lot of innovation already happening in this space. However, for those that are just starting their climate change journey, it would be helpful if the tools the Playbook promises are quickly available so that its vision can be properly embraced," he said.