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
Listed despite problems with its design.
Zen and the art of cycling exploration.
Design Council Homes Taskforce launched
To support government 1.5 million homes target within UK climate commitments.
The story of this knowledge quarter building.
In ecology, in hydrology, in biology and in architecture.
Creating environments that promote physical, mental, and social well-being.
UK cases of neutral current diversion
Research project looks for example contributions.
Overstocking and macro-economics cause a decline.
The 2024 update of the Common Assessment Standard
Demonstrating organisational capability’ to fulfil roles under the Building Safety Act.
56 recommendations for a better built environment
Published by the CIC ahead of the King’s Speech.
SkillELECTRIC Top 8 Competitors Named
in annual search for the UK’s best student electrician.
CIOB Diversity and Inclusion technical information sheet
Step-by-step guide on implementing D and I practices.
Conservation and the Indian City. Book review.
Reversibility in conservation ethics
Learning from painting conservation.
Where It's AT Podcast launched!
New CIAT Architectural Technology Podcast goes live.