Cost led procurement
Contents |
[edit] Introduction
The main aims of the Government Construction Strategy were to ‘change the relationship between Clients and Industry’ and achieve a 15-20% reduction in public sector construction costs by 2015. The Government Construction Task Group report 2012 developed three potential new strategies to help achieve these aims:
- Cost Led Procurement (CLP).
- Integrated Project Insurance (IPI).
- Two Stage Open Book.
All three involve early contractor involvement, transparency and integration. Along with a reduction in costs, they are expected to contribute to a reduction in project risk, improved programme accuracy and an enhanced working relationship between client and the supply chain.
[edit] Background
The Cost Led Procurement method is ‘...intended to allow industry to use its experience and knowledge to develop innovative solutions through leveraging design, materials, subcontracting, direct labour and experience to the advantage of the Public Sector Client...focused on achieving target costs whilst maintaining, if not improving value’ (Cabinet Office, 2014).
In Cost Led Procurement, the project details are clearly identified and a ceiling cost calculated. Typically, an integrated supply team (one or more) is identified through a framework agreement and the team work together to complete the project at below the ceiling cost. In subsequent similar projects within a framework, Cost Led Procurement offers the opportunity for further reduction of costs.
The project is offered to suppliers outside the framework if none of the existing teams are able to deliver the project below the ceiling cost.
[edit] Structure
The CLP plan involves five phases:
- Inception.
- Selection of contractor.
- Design and cost development.
- Construction.
- Operation
The flow chart from the 2014 Cabinet Office publication, Cost Led Procurement Guidance outlines the process.
[edit] Trial projects
Two trial projects were run using the CLP method: Upper Mole and Rye Harbour. The Rye Harbour scheme was successful in achieving a 6% saving through reducing the project programme.
This article contains public sector information licensed under the Open Government Licence v2.0 ref Cabinet Office, Cost Led Procurement Guidance 2014.
[edit] Related articles on Designing Buildings Wiki
- Framework agreement.
- Government construction strategy.
- Integrated project insurance.
- Integrated supply team.
- Managing the procurement process.
- Optimised contractor involvement.
- Procurement route.
- Supply chain.
- Supply chain management.
- Sustainable procurement.
- The benefits of e-procurement in construction.
- Two stage open book.
- Value for money.
[edit] External references
Featured articles and news
A threat to the creativity that makes London special.
How can digital twins boost profitability within construction?
A brief description of a smart construction dashboard, collecting as-built data, as a s site changes forming an accurate digital twin.
Unlocking surplus public defence land and more to speed up the delivery of housing.
The Planning and Infrastructure bill oulined
With reactions from IHBC and others on its potential impacts.
Farnborough College Unveils its Half-house for Sustainable Construction Training.
Spring Statement 2025 with reactions from industry
Confirming previously announced funding, and welfare changes amid adjusted growth forecast.
Scottish Government responds to Grenfell report
As fund for unsafe cladding assessments is launched.
CLC and BSR process map for HRB approvals
One of the initial outputs of their weekly BSR meetings.
Architects Academy at an insulation manufacturing facility
Programme of technical engagement for aspiring designers.
Building Safety Levy technical consultation response
Details of the planned levy now due in 2026.
Great British Energy install solar on school and NHS sites
200 schools and 200 NHS sites to get solar systems, as first project of the newly formed government initiative.
600 million for 60,000 more skilled construction workers
Announced by Treasury ahead of the Spring Statement.
The restoration of the novelist’s birthplace in Eastwood.
Life Critical Fire Safety External Wall System LCFS EWS
Breaking down what is meant by this now often used term.
PAC report on the Remediation of Dangerous Cladding
Recommendations on workforce, transparency, support, insurance, funding, fraud and mismanagement.
New towns, expanded settlements and housing delivery
Modular inquiry asks if new towns and expanded settlements are an effective means of delivering housing.