2007 terry

London South Bank University

Faculty of Engineering, Science and the Built Environment

Department of Property, Surveying and Construction

“Has compliance with the EC procurement rules had a detrimental effect on the

partnering practices of Registered Social Landlord Construction Industry Clients?”

2007

Paul Terry

MSc Quantity Surveying

LPD-M-040 Dissertation Title Page

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“Has compliance with the EC procurement rules had a detrimental effect on the

partnering practices of Registered Social Landlord Construction Industry Clients?”

Submitted by Paul James Terry

For the M.Sc. in Quantity Surveying of

Faculty of Engineering, Science and the Built Environment

Department of Property, Surveying & Construction

2007

This dissertation may be made available for consultation within the South Bank

University and may be photocopied or lent to other libraries for the purposes of

consultation.

I declare that this dissertation is my own unaided work except where specifically

referenced to the work of others.

………………………………………………………………………………………………..

Paul Terry BSc (Hons)

LPD-M-040 Dissertation Acknowledgements

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Acknowledgements

I dedicate this dissertation to my girlfriend Natalie, my family and my friends, in

recognition of their support throughout my studies at the London South Bank

University. I would not have been able to do this without them and I thank them all.

I give special thanks to my project supervisor Dr. Atkinson for providing me with

useful guidance throughout the production of this thesis.

I would also like to extend special thanks to Bob Lombardelli for sponsoring my

studies at LSBU and thank all of the staff at RLP for their support and

encouragement.

LPD-M-040 Dissertation Abstract

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Abstract

This dissertation is about determining whether compliance with the European

Commissions (EC) procurement rules is detrimental to the partnering practices of

Registered Social Landlord (RSL) construction industry clients. A critical review of

the literature assesses the evolution of RSL procurement practice. It explains why

RSL’s moved away from traditional competitive tendering towards partnering and

how they have had to recently revise their partnering practices in order to comply

with the EC procurement rules. A research sample of 10 clients, 17 consultants

and 9 contractors was assessed to determine how these fundamental changes to

RSL procurement practice have affected overall project performance. Overall

project performance was assessed in relation to ten key performance factors

identified in the literature review. The survey indicated that the research sample

agreed that project performance is improved through partnering when compared

with traditional competitive tendering and that partnered project performance is

reduced through compliance with the EC rules. Statistical analysis of the survey

results confirmed that RSL partnered projects performed significantly better before

compliance with the EC procurement rules. This has been attributed to increased

bureaucracy within the procurement process conflicting with the philosophies of

partnering.

LPD-M-040 Dissertation Contents

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Contents

Title Page i

Acknowledgements ii

Abstract

iii

1.0 Introduction 1

1.1 Rationale for the Research 1

1.2 Research Goals 2

1.3 Outline Methodology of the Research 3

1.4 Dissertation Contents

4

2.0 Basic Procurement Systems

5

3.0 Traditional RSL Procurement Practice 6

3.1 Competitive Tendering 6

3.2 Advantages of Competitive Tendering 8

3.3 Disadvantages of Competitive Tendering

8

4.0 More Recent RSL Procurement Practice 10

4.1 General Industry Initiatives 10

4.2 Partnering 15

4.3 Advantages of Partnering 18

4.4 Disadvantages of Partnering 18

4.5 Performance Measurement 19

4.6 Informal RSL Partnering Agreements

20

5.0 Current RSL Procurement Practice 22

5.1 The EC Procurement Rules 22

5.2 OJEU Framework Agreements

26

6.0 Summary of the Literature Review

29


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7.0 Questionnaire Design & Research Methodology 30

7.1 Research Aim 30

7.2 Rationale for the Research Questionnaire 30

7.3 The Research Sample 34

7.4 Method of Analysis

37

8.0 Analysis of Results 39

8.1 Descriptive Analysis 39

8.2 Statistical Analysis

47

9.0 Conclusion

53

10.0 References & Bibliography 59

10.1 References 59

10.2 Bibliography

61

11.0 Acronyms & Abbreviations 63

List of Figures

1 Chronology of Key Reports and Initiatives in Construction 12

2 Better Construction Performance 14

3 The Original Partnering Model 16

4 EC Procurement Rule Thresholds 23

5 Research Sample Professional Experience (Type) 36

6 Sample Mean Opinion Scores: Questions 1-10 40


8 Perceived Overall Performance of Partnered Projects compared

with Traditional Competitively Tendered Projects

48

9 Perceived Overall Performance of OJEU Framework Projects

compared with Partnered Projects

50

10 Components of the Traditional Procurement System 65

11 Components of the Design and Build Procurement System 67


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12 Components of the Management Procurement System 69

13 Summary of Constructing the Team (1994) 71

14 Summary of Rethinking Construction (1998) 72

List of Tables

1 Research Sample: Number and Rate of Response 34

2 Research Sample Professional Experience (Years) 35



5 Raw Data: Questions 1-10 75

6 Raw Data: Questions 11-20 76

7 Raw Data: Qualitative Responses 77

8 t-Test 1 Results 80







List of Appendices

1 Basic Procurement Systems 64

2 Summary of the Latham & Egan Reports 71

3 The Research Questionnaire 73

4 Raw Data Collected from the Research Questionnaire 75

5 Results of the Statistical Analysis 80

LPD-M-040 Dissertation Introduction

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1.0 Introduction

1.1 Rationale for the Research

Registered Social Landlords (RSL’s) are publicly funded organisations formerly

known as Housing Associations that can be defined as ‘not for profit’ companies

registered by the Housing Corporation (HC) to provide social housing. There are

2,500 registered RSL’s, with the largest having construction programmes valued at

over £270M [Jenkins, 2004: p. 7].

RSL’s were pioneers in the housing construction market in the adoption of

partnering philosophies recommended by Constructing the Team (1994) and

Rethinking Construction (1998). These reports were published in response to

growing client dissatisfaction with UK construction projects being delivered both

late and over budget. Both confirmed that the industry was underperforming and

identified traditional competitive tendering methods as being problematic. They

recommended the adoption of partnering philosophies to encourage longer-term

working relationships, involving all key members of the construction process from

the inception stage of the project. RSL’s were quick to adopt the partnering

method and were soon reporting improvements in project performance.

As from 10 September 2004, all RSL contracts have had to comply with the

European Commission (EC) procurement rules embodied in the EC public

procurement directives. The basis of this legislation is to ensure that there is equal

opportunity amongst companies based within the EU member states, to bid for all

publicly funded construction contracts over a certain value. In essence, the

legislation made it compulsory for RSL’s to revert back to the competitive

tendering process that they had moved away from for the vast majority of their

construction projects. This resulted in a degree of confusion amongst RSL’s and

the firms that they employ, as to what effect the introduction of EC procurement

rules would have on their existing partnering practices and the procurement

process as a whole. With the threat of legal action being taken against those who

failed to comply, RSL’s have amended their procurement practices accordingly.


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1.2 Research Goals

The aim of the study was to establish whether compliance with the EC

procurement rules has been detrimental to RSL partnering practices.

The aim of the study required the following objectives to be achieved;

1. To review the procurement practices of RSL construction industry clients.

2. To asses whether the adoption of partnering methods has improved RSL

project performance.

3. To identify how compliance with the EC procurement rules affects RSL

procurement practices.

4. To asses how compliance with the EC procurement rules affects the

performance of RSL partnered projects.

5. To identify whether the introduction of the EC procurement rules is

detrimental to RSL partnering practices

Integral to the aim of the study were two key research questions;

1. Does partnering improve RSL construction project performance?

2. Does compliance with the EC procurement rules reduce the performance of

RSL partnered construction projects?

The study assumed that the adoption of the partnering method has improved the

performance of RSL construction projects to be able to assess whether the

introduction of the EC procurement rules has been detrimental. Therefore, the first

research question needed to be answered to confirm that this assumption was

correct, before the second research question could be answered in relation to the

context of the study. It was anticipated that the answer to the first question would

be that partnering does improve RSL construction performance and it was

anticipated that the answer to the second question would be that compliance with

the EC procurement rules would reduce the performance of RSL partnered

projects.


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1.3 Outline Methodology of the Research

In order to achieve the dissertation objectives a variety of research, data collection

and data analysis methods were employed.

The first stage of the research consisted of a comprehensive review of the relevant

literature. The literature reviewed consisted of primary and some secondary

sources. Primary sources consisted of government and key industry organisation

publications. The secondary sources consisted of textbooks and journals. The

literature review was used to achieve objectives 1 and 3 of the study.

The second stage of the research consisted of data collection through the use of a

postal questionnaire. The research population was identified as people working

within RSL organisations and the firms that work with them through partnering

agreements. The research sample was drawn from this population. The research

questionnaire comprised 4 sections. The first section was designed to collect

general respondent characteristics data that could be used to validate assess

experience in relation to the study topic. The second section was designed to

collect opinion data in relation to the performance of partnered projects compared

with traditional competitively tendered projects to achieve objective 2 of the study.

The third section was designed to collect opinion data in relation to the

performance of OJEU framework projects compared with partnered projects to

achieve objective 4 of the study. The fourth section was designed to collect more

general qualitative data in relation to the study that might not have been captured

in sections 2 and 3.

The third stage of the research consisted of analysis of the raw data collected in

the questionnaire. Both descriptive and statistical methods have been

incorporated. The descriptive method was used to assess the results visually in

order to form conclusions that could be tested for significance as hypotheses in

the statistical analysis. The student t-Test was used to assess the significance of

difference between the results obtained in sections 2 and 3 of the questionnaire in

order to achieve objective 5 of the study.


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1.4 Dissertation Contents

The main body of the dissertation consists of eight chapters. Chapters’ two to six

comprise the literature review. The literature review is a chronological appraisal of

RSL procurement practices from traditional methods through to current methods.

Chapter six is a brief summary of the previous four chapters.

Chapter seven discusses the questionnaire design and research methodology.

This is an expansion of the previous section where the questionnaire and the

methodology used to analyse the data are discussed in more detail. The

characteristics of the research sample are also analysed in detail.

Chapter eight discusses the data analysis. The results obtained from the research

questionnaire and the conclusions that can be drawn from them are discussed in

detail. It also includes the statistical testing for significance of the results.

Chapter ten is the conclusion. The conclusion discusses the results in context with

the aims and objectives identified earlier in this chapter. It also discusses the

limitations of the study in relation to the data collected and the methods of analysis

used. Further areas of research are identified and discussed.

The conclusion is followed by the references and bibliography, a list of acronyms

and abbreviations and the appendices.

LPD-M-040 Dissertation Basic Procurement Systems

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2.0 Basic Procurement Systems

A number of procurement options can be used on any development or

maintenance contract. The traditional procurement method is still in regular use.

This system separates the activities of design and construction through the use of

bills of quantities and competitive tendering. However, it has become increasingly

common for other forms of procurement to be considered. When selecting a

system to use, the advantages and disadvantages of each route should be

considered and the decision-making process which informs the preferred option

needs to be robust.

The three main procurement options are;

• Traditional (Lump Sum)

• Design and Build

• Management Contracts

The traditional and design and build systems apply to both development and

maintenance contracts, but management contracts are generally applicable only to

more complicated development works and therefore not commonly used by RSL’s.

The selection of the procurement route should be a result of collective debate or a

workshop involving the client and the consultant team. The strategic brief issued to

the consultants at the selection stage may refer to procurement preferences, but in

most cases a system is not selected until it can be the focus of a procurement

workshop involving the design team and the client. An analysis of the

characteristics of each procurement option should be undertaken in the context of

the objectives of the brief to identify the procurement route most likely to meet the

identified time, cost and quality criteria. When seeking fees from short-listed

consultants, the client should be aware of any adjustment that might be applied

should an alternative form of procurement be adopted, therefore avoiding the risk

of a claim for additional fees when the appropriate procurement route is agreed

and implemented [Communities Scotland, 2004]. The characteristics of each of the

procurement systems are described in appendix 1.

LPD-M-040 Dissertation Traditional RSL Procurement Practice

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3.0 Traditional RSL Procurement Practice

The majority of RSL construction projects in the UK have been carried out under

the traditional procurement method whereby the client engages a contractor and a

professional team of design consultants. The contractor employs the various sub-

contractors to undertake significant (or all) elements of the work. The most

common variation to this approach is the use of the Design and Build system. The

standard form of contract used for these procurement methods are the Joint

Contract Tribunal (JCT) suite of contracts. These include the JCT Minor,

Intermediate or Major Works variations for use with the traditional lump sum

method and the JCT Design and Build version for use with the design and build

method. These contracts have been revised periodically with the most recent

revisions forming the 2005 edition [Lewis et al, 2004].

Whichever form of procurement or contract adopted by the RSL, the process for

selecting the contractor has generally been through competitive tendering.

Traditionally, the tendering process has been focused solely on the contractor

although the more recent diversified contractual market has seen the tendering

process applied to the selection of consultants and the appointment of suppliers

and sub-contractors alike.

3.1 Competitive Tendering

The approach to tendering can vary due to the value or complexity of a project but

primarily due to the choice of contract and procurement route adopted. In the

traditional system, the client will appoint a team of consultants through a process

of selection. The project team will comprise of an architect, quantity surveyor,

project manager, services and structural engineers. It is their job to produce

documentation to the required level of detail for a contractor to produce an

accurate estimate which will form the basis of their tender. This is a crucial stage

of any project as the contractors bid will be based upon this information alone. The

accuracy of this information will determine the accuracy of the contractor’s

estimate that forms a benchmark from which client satisfaction will be measured.


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“The contractor’s tender is the price for which he offers to carry out and complete,

in accordance with the conditions of the contract, the work shown on the drawings

and described in the bill(s) of quantities and/or specifications.” [NJCC, 1990: 2.3].

Compulsory Competitive Tendering (CCT) was introduced in the UK by the

Conservative Government through the Local Government Planning and Land Act

(1980), in an attempt to bring greater efficiency to local government and health

services through the use of competition. Housing Associations were covered by

this legislation and had to comply. Frederick (2004) states that “whilst it was

generally recognised that strong incentives were needed to stimulate reform,

compulsion resulted in resistance by Local Authorities and Health Trusts, an

immature market and poorly-conducted procurements which focused on price at

the expense of quality and employment conditions”.

The contractor produces a financial estimate for the specified works based upon a

set of unit rates incorporating the cost of labour, plant, materials and the

company’s overheads and profits. They will also submit an estimate for the

preliminary cost of conducting all work on site. The overall package will include a

construction programme and a building strategy explaining the method of

construction to be employed. This can soon amount to a substantially sized

submission that is consuming both financially and in terms of human resource.

The number of tenders that the client is recommended to request will depend upon

the anticipated value of the project. It generally varies somewhere between three

and eight whatever building standards are adhered to. This number is reduced on

more specialist engineering contracts where the cost of producing a tender can be

much higher. The tender list is made up of firms with a proven track record who

possess the necessary skills and resource to construct the project in question.

“The object of selection is to make a list of firms, any one of which could be

entrusted with the job. If this is achieved, then the final choice of contractor will be

simple – the firm offering the lowest tender. Only the most exceptional cases

justify departure form this general recommendation.” [NJCC, 1990: 3.4].


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3.2 Advantages of Competitive Tendering

The use of competitive tendering provides RSL clients with a key advantage. They

are able to easily demonstrate Value for Money (VFM) through appointment of the

contractor who submits the lowest bid. Achieving VFM is central to qualification for

Housing Corporation (HC) development grants which fund the majority of RSL

construction projects. Selecting the contractor on the basis of lowest price not only

achieves this but also satisfies the RSL that they are acquiring a product at the

true market value.

Another and more theoretical advantage of competitive tendering is that it can

increase quality. Contractors can only compete so far on price alone, as if each

contractor submitted a bid that equated to the true minimum market cost for

delivering the project, all bids submitted would be the same. This means that

contractors theoretically need to compete on more than tender price alone in order

to maintain a competitive advantage. Therefore contractors may focus on the

quality of the product or process that they can deliver within the pre-determined

market price which opens up another front of competition based on quality. In

theory this will not affect the overall tender price because as soon as the increased

quality affects the tender price they are at a disadvantage. The result is the client

acquiring a higher quality product for the pre-determined fixed market price.

3.3 Disadvantages of Competitive Tendering

Whatever the number of tenders submitted, the contractor’s chances of winning a

job through the competitive tendering process are not high. General industry

statistics state that they have a one in six chance of being successful [Pearson,

2005]. This can create a problem during a market down-turn when a contractor is

in need of work. They may estimate the cost of the job and submit a low bid below

the true project value in order to try and win work by undercutting their immediate

competitors. An under priced tender can result in an under resourced project

which can lead to delays, shortfalls in quality and claims for additional finance.

This invariably results in the dissatisfaction of the end user or the client.


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The fact that a contractor is likely to be successful on only one in six tenders

creates another problem in terms of resource wasted on unsuccessful bids. “It

should be appreciated that the costing of preparing tenders the larger the lists

become the greater the cost of abortive tendering, and this must be reflected in

building prices.” [NJCC, 1990: 2.5]. In other words, the abortive cost of

unsuccessful tenders is indirectly filtered down to building costs through the

commercial costs incorporated in a contractor’s overheads and profit margins.

Potential shortfalls with the competitive tendering process are also exposed within

a strong construction market. During such times successful contractors can be

working on several projects at once, close to or at the maximum capacity of their

resources. If under these circumstances they are asked to tender for another job,

they will often submit a bid that they consider too high to win rather than decline

the offer and risk loosing a relationship with a potential client. If however they are

selected, the result can be an end product delivered at a price above current

market value as well as the potential problems associated with under resource.

This can again lead to client dissatisfaction [Pearson, 2005].

LPD-M-040 Dissertation More Recent RSL Procurement Practice

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4.0 More Recent RSL Procurement Practice

Since the introduction of CCT, many construction industry clients were reporting

increasing dissatisfaction with the quality of their end products and the frequent

delivery of projects both late and over budget. During this period, the construction

industry had developed a reputation for being stubborn and reluctant to change

which resulted in such problems being acquitted to the unique nature of buildings

and the high degree of unpredictability associated with the construction process.

However, this was not the case. “Up to 80% of inputs into buildings are repeated”

[The Construction Task Force, 1998: 4.69].

Over the same period of time other UK industries had seen substantial

improvements in performance through the implementation of innovative

management techniques and production processes – primarily car manufacturing,

steel making, grocery retailing and off-shore engineering. The Scottish Executive

(2002) argues that “without developments in procurement practice, including

greater use of consortia to deliver economies of scale and a strategic approach to

demand and to the supply side, there is a significant risk that increased

expenditure in capital works will be absorbed by, and in some cases contribute to,

higher costs rather than increased and improved output”.

4.1 General Industry Initiatives

In response to the reports of growing dissatisfaction and underperformance within

the industry, in 1993 the House of Commons announced the joint review of

procurement and contractual arrangements in the UK construction industry. A

series of reports were then commissioned and published by HM government and

other leading industry organisations. The aim was to identify problems linked with

under performance and to propose practical researched solutions. A chronological

list of these reports and initiatives can be seen in figure 1. Perhaps the most

significant of these reports in relation to changes in RSL procurement practice are

Constructing the Team (1994), The Levene Efficiency Scrutiny into Construction

Procurement by Government (1995) and Rethinking Construction (1998).



Constructing the Team (1994) was written by Sir Michael Latham. This was the

final report of a government/industry review of procurement and contractual

arrangements in the UK construction industry. The central message of this report

was that the client should be at the core of the construction process. The general

route recommended to achieve client satisfaction was through team work and co-

operation. The Latham report suggested that partnering could overcome many of

the problems associated with traditionally procured construction projects making

particular reference to the public sector including RSL’s.

“Specific advice should be given to public authorities so that they can experiment

with partnering arrangements where appropriate long-term relationships can be

built up. But the partner must initially be sought through a competitive tendering

process, and for a specific period of time. Any partnering arrangements should

include mutually agreed and measurable targets for productivity improvements.”

Recommendation 19 of Constructing the Team [Latham, 1994: p. 62].

Following the Latham Report, the Cabinet Office initiated an Efficiency Scrutiny

into Government procurement of construction. The Levene Efficiency Scrutiny into

Construction Procurement by Government (1995) concluded that departments and

agencies were partly to blame for the poor performance of the industry. The

scrutiny found that departments were: often unrealistic about budgets or

timetables; had an over simplistic view of competition; often failed to understand

and manage risks; and were not organised so that industry had a single contact

with whom they could discuss and resolve common problems across a number of

departments and agencies [The Comptroller and Auditor General, 2001].

The scrutiny made a number of recommendations to improve the procurement and

management of construction projects. This included better communication with the

construction industry to reduce conflict; adoption of a more commercial approach;

negotiation of deals justified on value for money grounds; and increased training of

civil servants on procurement and risk management. The Office of Government

Commerce assumed responsibility for coordinating construction procurement

policy across government [The Comptroller and Auditor General, 2001].



Figure 1 – Chronology of Key Reports and Initiatives in Construction [The

Comptroller and Auditor General, 2001: p. 19].

Latham’s message was strongly reinforced by the Construction Task Force in

Rethinking Construction (1998). Chaired by Sir John Egan, the Task Force report

showed that effective projects required a clear process of which partnering was a

vital part. In reference to adopting lean manufacturing principles such as

standardisation and pre-assembled components, the report stated that “creative

design is important for a fine project, but a well run process, stripping out waste

and inefficiency, is necessary to deliver the client's aspiration for a harmonious

building or civil engineering project which also actually works”.



The report championed the advantages of long-term partnering relationships.

“Partnering on a series of projects is a powerful tool increasingly being used in

construction to deliver valuable performance improvements. We are proposing that

the industry now goes a stage further and develops long-term alliances that

include all those involved in the whole process of delivering the product, from

identification of client need to fulfilment of that need” [The Construction Task

Force, 1998: 4.68].

The Task Force reported that the most immediately accessible savings from

partnering come from a reduced requirement for tendering. Whilst this went

against CCT best value practice in the public sector, it was considered vital that

the process was modified so that tendering could be reduced. In order for clients

to be satisfied that they are getting value for money, the report recommended

comparison between suppliers and rigorous measurement of their performance

(see section 4.5). “With quantitative performance targets and open book

accounting, together with demanding arrangements for selecting partners, the

Task Force believes that value for money can be adequately demonstrated and

properly audited. We invite the Treasury, with DETR, to consider the appropriate

mechanisms further and give guidance to public bodies” [The Construction Task

Force, 1998: 4.68].

With regard to competitive tendering, Egan also argued that too many clients were

undiscriminating and equated price with cost, selecting designers and constructors

almost exclusively on the basis of tendered price. This tendency was seen as one

of the greatest barriers to improvement and the public sectors requirement for

financial accountability was viewed as a major culprit in this respect. The industry

needed to educate and help its clients to differentiate between best value and

lowest price. By using lowest price as the primary selection criteria, competition

became too intense resulting in unsustainably low prices being offered due to

commercial pressures. This created a new culture of problems leading to poor

quality and under performance. The industry had a low and unreliable rate of

profitability. Margins were too low to sustain development and those companies

who served their clients well should have been making much better returns.



As a result, too little was being invested in research and development and in

capital. Between 1981 and 1998 in-house research and development had fallen by

80% and capital investment was a third of what it had been 20 years previously.

This lack of investment was said to be damaging the construction industry's ability

to keep abreast of innovation in processes and technology as experienced in other

major UK industries [The Construction Task Force, 1998: 4.64].

The Task Force believed that the main opportunities for improvements in house

building performance existed within the social housing sector for the simple reason

that most social housing is commissioned by a few major clients. However, they

anticipated that improved practice in developing social housing would affect

expectations and activity in the wider housing market. “Consequently we see much

scope for cross-fertilisation of innovation between the public and private sectors”

[The Construction Task Force, 1998: 4.65].

Figure 2 – Better Construction Performance [The Comptroller and Auditor General,

2001: p. 5].



Figure 2 identifies the key criteria for better construction project performance and

summarises the good practice recommendations made by both the Constructing

the Team and Rethinking Construction reports. A more detailed summary of each

of the reports findings and recommendations can be seen in appendix 2.

In 2000 the Local Government Act (1999) replaced mandatory CCT with the

criteria of Best Value, thus enabling Public Authorities to adopt the partnering

approach. Part 1 of The Local Government Act (1999) states that ”a best value

authority must make arrangements to secure continuous improvement in the way

in which its functions are exercised, having regard to a combination of economy,

efficiency and effectiveness.”

4.2 Partnering

Partnering is both an attitude of mind and a series of procedures which commit the

parties involved with a construction project to focus on creative cooperation and to

work to avoid confrontation. Its essential component is trust. The Reading

Construction Forum defined it as “a managerial approach used by two or more

organisations to achieve specific business objectives by maximising the

effectiveness of each participant’s resources. The approach is based on mutual

objectives, an agreed method of problem resolution and an active search for

continuous measurable improvement” [Bennett & Pearce, 2006].

Partnering is a generic term that embraces a range of practices with varying

degrees of formality designed to promote more co-operative working between

contracting parties and can be categorised as follows:

• Long Term Partnering where arrangements are for a period of time rather

than a single project.

• Project-Specific Partnering where arrangements are for the duration of an

individual project and the contract may be awarded competitively.



Both of these alternatives are widely practised in the private sector. However, a

variation of the latter more suited to the public sector is the following:

• Post Award Project Specific Partnering where the contract is subject to the

normal competitive processes. As the name suggests, the partnering

arrangement is entered into after the contract has been awarded. However,

the intent to partner should be part of the award process criteria.

Whatever the form of partnering, the objective is to align and unite the parties with

a shared goal of completing the project or scope of work in a cost effective and

timely manner which is mutually satisfactory and beneficial. Once objectives which

are shared by all have been established, working relationships between the parties

can be built upon a basis of mutual respect, trust and integrity. In such an

atmosphere, disputes can be avoided or speedily resolved and resorting to

litigation may be unnecessary [Roe & Jenkins, 2003].

Figure 3 – The Original Partnering Model [Bennett & Jayes, 1998: p. 3].



Partnering has made great strides in recent years. The fastest growth has come in

the Housing Association movement and some other parts of the public sector. The

response from private commercial clients has been mixed although some private

firms have led the way in best practice [The Construction Task Force, 1998: 4.69].

Some private sector clients have preferred traditional procurement routes. The

Comptroller and Auditor General (2001) argues that this is because many clients

still do not understand that fiercely competitive tenders and accepting the lowest

bid do not produce best value for money in construction. Lowest price tenders may

well contain no profit margin for the contractor, whose commercial response is to

then try to claw back the margin which was not in the tender through variations,

claims and auctioning of subcontractors and suppliers. Such adversarial

approaches have disfigured the construction industry over many years. They have

produced high levels of litigation and conflict, low investment, inadequate research

and development, negligible margins and a poor perception of the industry by the

public in general and graduates or school leavers in particular.

Partnering turns this process around. It assumes a win-win scenario for all parties

where reasonable margins are built up by the whole team on an open book basis.

All parties are signed up to mutual objectives through a partnering charter

designed specifically for and by the partnership. All agree on effective decision

making procedures and problems are resolved collaboratively by the entire team.

Continuous improvement and benchmarking is crucial (see section 4.5). In order to

facilitate the use of partnering on construction contracts, the bodies responsible for

issuing standard form construction and engineering documents have developed

various forms of partnering agreements and contracts. Those most applicable to

RSL use are the JCT Partnering Charter, the New Engineering Contract (NEC)

Partnering Option and the Project Partnering Contract (PPC) 2000 Standard Form

of Contract for Partnering. Perhaps the most significant of these in terms of

contract development is the PPC2000 as it is intended that the client, the

constructor, all consultants and key specialist sub-contractors sign a single

partnering contract as opposed to a series of stand alone partnering agreements

[Lewis et al, 2004].



4.3 Advantages of Partnering

Generally, the benefits of partnering are perceived to include improved cash flow

and reduced overheads with greater efficiency and cost effectiveness. Partnering

allows for increased investment in research and development creating greater

opportunity for innovation, continuous improvement of quality services, reduced

delivery time and increased safety. In theory, partnering should eliminate disputes

and lead to stronger relationships with key suppliers, resulting in the opportunity

for future work [Bennett & Jayes, 1995]. This is supported by evidence from a

series of demonstration projects as discussed in section 4.5. ECI (2000)

summarises the advantages of partnering arrangements to RSL’s as being:

• Reduced capital cost.

• Reduced construction time.

• Elimination of defects (and reduced waste).

• Increasing out-turn predictability.

• Standardisation of components.

• Extending effective participation through the supply chain.

• Stakeholder involvement.

• Technical innovation (including increased use of IT).

• Increased customer satisfaction.

• Reduced opportunity for conflict or a claims culture.

• Positive working together to achieve a common goal.

4.4 Disadvantages of Partnering

In order to be successful, partnering arrangements require very careful planning at

the contract formation stage before the parties undertake the partnering exercise.

Projects involving partnering need clear parameters, such as the clear allocation of

rights, responsibilities and risk, and realistic budgeting. Therefore, partnering may

involve increased bureaucracy and a disproportionate amount of time spent in

meetings.



Bennett and Jayes (1995) argues that critics dismiss the idea of partnering as

being inconsistent with the realities of commercial contracting, or believe it to be

just management rhetoric which does not adequately acknowledge the complex

commercial issues encountered on a day to day basis. Another disadvantage is

that partnering may prevent a client from considering other opportunities.

Partnering marks a shift away from competitive tendering to an emphasis on

quality and therefore employers need to have the means of assessing whether

they are receiving best value of money. Clients also need to ensure that

contractual documentation is comprehensive and consistent and that there is no

divergence between the partnering arrangement and the works contract.

Disadvantages of partnering arrangements can be summarised as:

• Dangers of developing too close an arrangement.

• Longer term possibilities of exploitation of the relationship.

• Costs of preparing complex partnership agreements.

4.5 Performance Measurement

RSL’s are required to achieve Value for Money (VFM) in order to satisfy HC grant

regulations and qualify their project for funding. This requirement was easily

satisfied when adopting the CCT process, through appointment of the lowest

tender. When adopting the partnering process HC grant regulations require RSL’s

to achieve best value which considers quality as well as price. They have been

able to achieve this through the use of Key Performance Indicators (KPI’s). KPI’s

are objective measurement tools for comparing project performance in key areas

determined as being integral to project success. These may include;

• Cost – where actual project cost is measured against budget cost.

• Quality – where project quality can be assessed by measuring the number

of defects at handover with a pre-determined acceptable limit.



• Time – where actual project programme is measured against the agreed

contract programme.

KPI’s were developed by the Construction Industry Board (CIB) in response to the

Rethinking Construction report (1998) and are revised annually. They provide a

benchmark score for best practice industry performance in key project areas (such

as those listed above), against which individual project performance can be

compared. The differences between these figures are the recordable KPI scores.

Another more general attribute of performance measurement is the ability to

identify best practice which can then be disseminated back to the industry through

knowledge sharing initiatives. The Department of the Environment, Transport and

Regions (DETR) issued grants to help fund Egan’s initial target of £500 million

pounds worth of demonstration projects to enable this process to be developed.

Details of the results from the demonstration projects are freely accessible on a

central internet database provided by the Housing Forum. Examples of best

practice achieved through innovation are promoted as targets for others and

negative experiences are shared in an attempt to prevent repeating errors. There

are several examples of RSL demonstration projects providing conclusive

evidence of best practice being achieved through the use of partnering.

4.6 Informal RSL Partnering Agreements

Public sector construction clients have lead the industry in terms of implementing

partnering in recent years, with RSL’s leading the way in the housing market. As

one of the few public sector clients within the UK that were not, until relatively

recently, subjected to bureaucratic European procurement regulations, they were

able to fully utilise the theoretical model of partnering and develop much longer

term and relatively informal partnering agreements. This enabled RSL’s to further

develop innovations like Modern Methods of Construction (MMC) to achieve better

project value and to develop sustainable construction methods aimed at

minimising the environmental impact of the built environment, both of which are

integral to RSL HC grant qualification.



Longer term arrangements provide the necessary investment and accumulation of

knowledge to develop MMC products like pre-fabricated building components and

to address sustainability issues like production of renewable energy on site.

Without longer term partnerships it is far more difficult to generate the level of skill

required to design, or the level of investment required to develop such innovations

to an economically viable state.

As a result, RSL’s developed long term relationships with contractors (and

consultants alike) on their approved lists of contractors. The approved lists of

contractors comprise those firms who have been selected initially through CCT

and retained on the basis of their good performance measured through the KPI’s.

The result is a pool of proven contractors that can be selected for single stage

tenders or even negotiated contracts so long as they maintain good project

performance.

LPD-M-040 Dissertation Current RSL Procurement Practice


5.0 Current RSL Procurement Practice

In December 2003, the European Commission (EC) opened infraction proceedings

against the UK for its failure to apply the EC procurement Directives to RSL's. This

culminated in the Commission’s announcement that it would be commencing

proceedings against the UK through the European Court of Justice (ECJ). For

many years the UK government had argued that RSL’s were not covered by the

rules. However, under the threat of proceedings by the EC the UK Government

conceded. On 10 September 2004, the Office of the Deputy Prime Minister

(ODPM) announced that the UK government had accepted that the EC was

correct in its view that RSL’s fall within the definition of Bodies Governed by Public

Law (BGPL) as defined in the EC procurement directives and must therefore

comply with them. This decision prevented ECJ proceedings against the UK which

would have been likely to rule in favour of the EC’s arguments, especially given

ECJ case law where the EC was successful with similar infraction proceedings

taken against France in 1999 [www.tendersdirect.com/news].

Since 10 September 2004, the HC has required all RSL’s to follow the EC’s rules

for all procurements to which those rules apply as part of their funding conditions.

As a result, officers responsible for all forms of procurement within RSL’s have had

to become familiar with the EC procurement directives as RSL’s are responsible

for ensuring that their own procurement processes comply with the rules.

5.1 The EC Procurement Rules

The purpose of the EC procurement rules is to open up the public procurement

market and to ensure the free movement of goods and services within the EU. The

EC procurement rules have been brought into force in UK law by three sets of

regulations;

• The Public Works Contracts Regulations (1991)

• The Public Services Contracts Regulations (1993)

• The Public Supply Contracts Regulations (1995)



The EU public procurement rules consist of Treaty of Rome obligations which

prohibit discrimination between suppliers, contractors or service providers and

require open and transparent procurement procedures. The Treaty obligations

apply to all procurement activity, irrespective of value. However, the EC

procurement directives only apply to contracts above certain value thresholds

which are listed in figure 4. Adjustments are made to the thresholds every two

years to take account of exchange rate variations.

Public Contracts Regulations 2006 - from 31 January 2006

Supplies Services Works

£93,738

(€137,000)

£93,738

(€137,000)

£3,611,319

(€5,278,227)

Figure 4 – EC Procurement Rule Thresholds [www.tendersdirect.com/infoCentre]

A single contract that does not have a value exceeding the relevant threshold may

also be subject to the EC procurement rules. This occurs where there is a single

requirement for services and a number of contracts are to be entered into to fulfil

that requirement. In that event, it is necessary to assume that each contract has

the value of the aggregate of all the contracts. This is common in respect of

professional fees on capital projects (new build and refurbishment) where the

value of the services of each individual member of the project team may have to

be aggregated to calculate its relationship to the threshold. Where there is a series

of works contracts to be let or where contracts are renewable, the value of all such

contracts must be aggregated. Where a contract is concluded for an indefinite

period (i.e. is simply ongoing with no definite end date) it is necessary to assume

that it will endure for four years in arriving at the value for threshold purposes.

Splitting contracts in order to bring them below the thresholds as a way of avoiding

the rules is prohibited. This situation is known as aggregation and would apply to

long-term (multiple-project) partnering agreements. RSL’s are strongly advised to

apply EU rules for the award of a feasibility study if the value of the project is likely

to meet or exceed the relevant thresholds [Scottish Executive, 2002].



Where the EC procurement directives do apply, contracts must be advertised in

the Official Journal of the European Union (OJEU), in accordance with certain

procedural requirements. There are currently three basic procedures provided for

under the EU rules which are;

• Open procedure

• Restricted procedure

• Negotiated procedure

All contracts regardless of the procedure adopted must be advertised through an

OJEU notice, which is a standard web based electronic advertisement document

designed to invite tenders from all interested parties within the EU member states.

Open procedure contracts are only appropriate for simple contracts where

specifications and terms of supply can be stated in the advert or follow up

document. Clients must allow tenderers 52 days to submit tenders from the date

when the OJEU notice is advertised. This can be reduced where a relevant Prior

Information Notice (PIN) has been published, but that period must be no shorter

than 22 days. The open procedure is similar to traditional single-stage competitive

tendering.

The restricted procedure is a two stage procedure. The purpose of the first stage

is to identify tenderers who satisfy the minimum criteria laid down by the client in

terms of their technical capability, or their economic and financial standing. This is

known as a Pre-Qualification Questionnaire (PQQ). The minimum period for

submission of the PQQ is 37 days. The client then selects a limited number of

suppliers which it will invite to submit tenders as part of the second stage on the

basis of the information submitted in the PQQ. After the client has selected those

firms it wants to invite to tender, it must allow all successful applicants at least 40

days from the date of acceptance to submit their tenders. This is likely to involve a

number of stages where quality based consultant selection procedures are used

as opposed to minimum price. The restricted process is similar to traditional two-

stage competitive tendering.



Negotiated contracts are negotiated with several suppliers chosen by the client. In

very limited circumstances contracts can be negotiated without any advertising.

The negotiated procedures can only be used where there is exceptional

justification for doing so, such as where no tenders or only irregular tenders have

been submitted in a previous open or restricted procedure and the original terms

of the contract are not substantially altered. The minimum period for submission of

interest through a PQQ is 37 days [Scottish Executive, 2002].

Trowers & Hamlins (2004) states that “RSL’s are advised that restricted

procedures are most appropriate for development and maintenance works, as

calls for expressions of interest in the negotiated procedure can typically result in

fifty or more PQQ submissions” .

There are rules on the standards which can be used in an OJEU notice. Technical

standards used for contracts should be European standards, but if no European

standards exist, international standards should be used. Goods or services

meeting equivalent standards must be accepted. No reference may be made in

specifications to goods or services of a specific make, source or brand name, or

made from a particular process where this has the effect of favouring certain

suppliers. It may be permissible to refer to a brand name or source in certain

limited circumstances but the words ‘or equivalent’ should always be added to the

reference [Trowers & Hamlins, 2004].

The Regulations provide a limited number of specific exclusions. Importantly for

RSL’s, these exclusions include contracts for the acquisition of land or any interest

in land. For example, this exclusion will apply in circumstances where the RSL is

entering into a contract to purchase an interest in land and newly completed or

existing dwellings [Achilles & Bevan-Brittan, 2005]. When the rules apply, they are

mandatory and failure to comply can result in:

• Suspension or cancellation of a tender procedure by the ECJ.

• A liability to pay damages.

• Loss of sources of public funding (HC grant).



Inevitably, there will be occasions when an RSL does not fully comply with EU

procurement rules. These could be minor failings (such as failing to include EU

technical specifications) or major failings (such as using the negotiated procedure

when circumstances do not justify it). When this occurs, the RSL will need to

undertake a risk assessment of whether to continue with or abort the procurement.

While purchasing policies of RSL’s may wish to favour local producers or suppliers

over cheaper or more efficient providers, under EU law this may be construed as

being at the expense of providers or suppliers of goods or services from other EU

member states. A fundamental rule of EU law (derived from the Treaty of Rome) is

the prohibition of discrimination on grounds of nationality (or discrimination in

favour of one nationality). This rule applies to any value of contract and may

conflict with policies aimed at enhancing sustainability which form part of RSL’s

HC funding conditions [Birkby, 2004].

5.2 OJEU Framework Agreements

Compliance with the EC procurement directives has affected RSL’s approach to

partnering, particularly the more informal partnering arrangements discussed in

section 4.6. In order to form partnerships that comply with the EU rules, RSL’s

must use the restricted procedure discussed previously.

Through the restricted procedure, RSL’s are able to use the first stage (PQQ) to

form framework agreements (similar to what they would previously have called a

list of approved contractors). Lewis et al (2004) defines the framework agreement

as “a flexible arrangement between the parties stating that works, services or

supplies of a specified nature will be undertaken or provided in accordance with

agreed terms and conditions, when purchased (‘called off’) for a particular need”.

The framework agreement provides the client with a short-list of pre-selected

service providers who can then be called-off to submit a formal tender for the

contract works. Essentially, it limits the number of tenderers that may respond to

an open procedure OJEU notice reducing the time taken to assess bids and issue

the contract award notice.



“Entry into such a framework does not guarantee that contracts will in fact be

awarded to any of those involved, since the contract is formed only when the a

call-off is awarded under the agreement” [Lewis et al, 2004: F1.81].

Due to its characteristics, a framework agreement is similar to what has

traditionally been referred to as two-stage competitive tendering. In this system, an

initial bid is sought from contractors based upon preliminary design information

(first stage), before a more detailed and accurate revised bid is submitted based

upon detailed design information (second stage). The successful bidders tender

then forms the basis of the contract sum.

Framework agreements have been successfully established in other industry

sectors by public authority clients who have been governed by the EC

procurement directives since their introduction in the early 1990’s. The most

prestigious of these are Procure 21 and Local Infrastructure Finance Trusts (LIFT).

The procure 21 initiative is the creation of National Health Service (NHS) Estates,

developed in response to the need to save time and costs in the procurement of

infrastructure works by and on behalf of the NHS. It is intended to apply to any

construction project falling between the capital values of £1M and £25M for Private

Finance Initiative (PFI) projects and £1M and above for traditional construction

projects.

NHS Estates entered into framework agreements with a limited number of

integrated supply chains. The private sector supply chain is known as a Principal

Supply Chain Partner (PSCP) that comprises contractors, facilities maintenance

contractors, management contractors, suppliers, designers, financial and legal

advisers. Arguably, this is the sort of team that the private sector would assemble

when tendering for a public works contract. The procure 21 initiative seeks to

formalise this process and benefit from creating a team that will then work together

on a number of projects over a significant period of time. Initially, two pilot

schemes were chosen in the North West and the results were considered to be

successful. As a result, the initiative was rolled out across the remainder of the UK

[www.nhs-procure21.gov.uk].



LIFT is a similar initiative that was formed as a result of the NHS White Paper

published in 1997 which recognised the need to supply an increased demand for

primary healthcare facilities in the UK. Six initial test areas were used to try out

LIFT schemes that were proven to be successful. As a result, LIFT schemes are

now being rolled out across the UK [www.partnershipsuk.org.uk].

The main problem experienced by RSL’s in adopting the frameworks is that they

are more bureaucratic (and therefore time consuming) than the partnering

approach with which they have become accustomed. The sudden enforced

change of culture resulting from compliance with the EC procurement rules has

meant that many have had to outsource the PQQ process to enable their in-house

resources to focus on business continuity. As discussed previously, the PQQ is

limited (by the EC Directives) to collecting information with regard to only technical

capability, or economic and financial standing of applicants. This does not take

into consideration relationships that have been built up through successful long-

term partnering arrangements and as a result may dissolve such relationships,

especially with regard to smaller firms that may not score as highly in the criteria

covered by the PQQ [Rabbetts, 2007].

Outsourcing can also prove to be an expensive option for RSL’s meaning that

many of the smaller organisations have had to form framework consortiums in

order to efficiently finance the process. This has potentially reduced the number of

firms that are able to work with RSL’s through partnering arrangements

[Rawlinson, 2006].

Another limitation of framework agreements for RSL’s is that the maximum

duration allowed by the rules is only 4 years. In a market where sustainability

issues and product/process improvement are central to HC funding conditions, this

does not allow sufficient time to efficiently deliver the benefits that can be derived

and developed through much longer term relationships. Effectively, the framework

only has time to work together on a few medium sized social housing projects

before it is dissolved and the RSL has to issue an OJEU notice for a new

framework, which there is no guarantee will include the same partner firms.

LPD-M-040 Dissertation Summary of the Literature Review


6.0 Summary of the Literature Review

The majority of RSL construction projects have been procured through the

traditional lump sum and design and build procurement systems. Traditionally, the

client has appointed the design team consultants through the process of selection

and principal the principal contractor through the competitive tendering process.

Although this method ensured that the lowest price was obtained for the work,

intense competition resulted in reduced profitability and diminishing margins for

the contractor. This reduced the opportunity for research and development

restricting innovation. The separation of design and construction also fragmented

the project process leading to inefficiencies and conflict. The result was increasing

numbers of projects being delivered both late and over budget, which in turn lead

to reduced client satisfaction.

Throughout the mid to late 1990’s, a series of government initiatives were

developed to critically appraise the construction industry and investigate the

potential for performance improvement. As a result, the Constructing the Team

(1994) and Rethinking Construction (1998) reports were published. Both confirmed

that the industry was underperforming and identified traditional procurement

methods as inefficient. They recommended the adoption of partnering

philosophies to encourage longer-term working relationships, involving all key

members of the construction process from inception of the project. Experience in

other major UK industries had shown that by reducing fragmentation and avoiding

adversarial relationships, performance could be improved resulting in a more

efficient process capable of delivering products on time and at a reduced cost.

RSL’s were quick to adopt the partnering method and were soon reporting

improvements in project performance in terms of time, cost and quality.

On 10 September 2004, the ODPM announced that RSL’s were no longer exempt

from the EC public procurement directives and therefore had to comply. The

bureaucratic rules meant that in order for RSL’s to continue partnering they had to

use the restricted procedure to form framework agreements which ultimately revert

back to a more traditional two-stage competitive tendering approach.

LPD-M-040 Dissertation Questionnaire Design & Research Methodology


7.0 Questionnaire Design & Research Methodology

This section of the report re-states the aim of the study and discusses the rationale

for the research questionnaire, a copy of which is contained in appendix 3. The

method used to select the research sample is discussed and the characteristics of

the research sample are examined. The methods used to analyse the data

collected from the questionnaire are also identified and explained.

7.1 Research Aim

The aim of the study is to establish whether compliance with the EC procurement

rules has been detrimental to RSL partnering practices.

In order to achieve the aim of the study a research questionnaire was developed

to collect primary data that would provide answers to the key research questions;

1. Does partnering improve RSL construction project performance?

2. Does compliance with the EC procurement rules reduce the performance of

RSL partnered construction projects?

The research questionnaire was formulated as a result of the findings in the initial

literature review conducted in the research proposal. Its purpose was to collect

primary data that could be analysed to establish whether the adoption of

partnering theories identified in chapter 4 improved RSL construction project

performance (research question 1) and whether compliance with the EC

procurement rules has reduced RSL partnered project performance (research

question 2).

7.2 Rationale of the Research Questionnaire

The research questionnaire was structured in 4 sections. The first section was a

‘general data’ section designed to identify the characteristics and suitability of the

research sample (see section 7.3).



The second section of the research questionnaire consisted of 10 questions

designed to identify respondent opinion of RSL construction project performance

when comparing partnered projects with traditional competitively tendered

projects. Each of the 10 questions asked respondents to indicate their level of

agreement/disagreement with statements made about key performance factors

using an ordinal ranking scale of 1 to 5 where 1 equalled strongly disagree, 3

equalled indifferent and 5 equalled strongly agree. Each statement was worded in

such a way as to imply that project performance is improved through partnering.

Therefore, if a respondent gave an opinion score above the indifference score of 3

for any question, it would imply that they agreed that partnering improved that

factor of project performance when compared with traditional competitive

tendering. By calculating mean opinion scores for each of the samples, it was

possible to assess overall levels of agreement/disagreement with each of the key

performance factor statements. If the sample generated a mean opinion score

above the indifference score of 3 for any question, it would imply that the sample

agreed with the corresponding statement.

The statements incorporated within each of the 10 questions relate to key project

performance factors that when combined determine overall project performance.

These were identified in the literature review chapters as being;

1. Procurement Time

2. Procurement Cost

3. Project Time

4. Project Cost

5. Project Quality

6. Working Relationships (reduced litigation)

7. Research and Development (investment)

8. Sustained Improvement (innovation)

9. Formality of Contract

10. Balance of Risk



Each of the 10 questions asked were assumed to carry equal weighting in terms of

overall project performance. This enabled an opinion score to be generated for the

overall performance of partnered projects compared with traditional competitively

tendered projects by calculating the mean of the scores recorded for questions 1

to 10. If the mean opinion score generated for a respondent was above the

indifference score of 3, it would imply that they agreed overall project performance

is improved through partnering when compared with traditional competitive

tendering. By calculating the mean of the sample mean scores already calculated

for questions 1 to 10, the samples mean opinion score could be generated for

overall performance of partnered projects compared with traditional competitively

tendered projects. If the sample generated a mean opinion score for overall project

performance above the indifference score of 3, it would imply that the sample

agreed overall project performance is improved through partnering when

compared with traditional competitive tendering.

The third section of the research questionnaire was designed to identify

respondent opinion of whether the introduction of the EC procurement rules has

affected the performance of RSL partnered projects. This section incorporated the

same set of 10 questions used in section 2 of the questionnaire, but the wording

was changed to ask respondents to indicate their level of agreement/disagreement

with the key performance statements when comparing an OJEU framework

construction project with a partnered construction project. Each statement was

worded in such a way as to imply that partnered project performance is improved

through compliance with the EC procurement rules (OJEU framework projects).

The same ordinal ranking scale was applied to each of the questions as in section

2 of the questionnaire. This meant that if a respondent gave an opinion score

above the indifference score of 3 for any question, it would imply that they agreed

that compliance with the EC procurement rules improved that key factor of

partnered project performance. By calculating mean opinion scores for each of the

samples, it was possible to assess overall levels of agreement/disagreement with

each of the key performance factor statements. If the sample generated a mean

opinion score above the indifference score of 3 for any question, it would imply

that the sample agreed with the corresponding statement.



As in section 2 of the questionnaire, each of the 10 questions asked were

assumed to carry equal weighting in terms of overall project performance. This

enabled an opinion score to be generated for the overall performance of OJEU

framework projects compared with partnered projects by calculating the mean of

the scores recorded for questions 11 to 20. If the mean opinion score generated

for a respondent was above the indifference score of 3, it would imply that they

agreed overall partnered project performance is improved through the introduction

of the EC procurement rules. By calculating the mean of the sample mean scores

already calculated for questions 11 to 20, the samples mean opinion score could

be generated for overall performance of OJEU framework projects compared with

partnered projects. If the sample generated a mean opinion score for overall

project performance above the indifference score of 3, it would imply that the

sample agreed overall partnered project performance is improved through the

introduction of the EC procurement rules.

It should be noted that the wording and the ordinal ranking scale were reversed in

questions 9 and 19 to provide a check that the answers given by each respondent

were considered and not systematically generated. This was done by changing the

wording of the statements to a negative context and awarding the maximum score

of 5 to strongly disagree and the minimum score of 1 to strongly agree

accordingly.

Section 4 of the research questionnaire was designed to collect more general

qualitative data in relation to the study that might not have been captured in

sections 2 and 3. The specific aim of this section was to establish why the

respondents answered the questions in the way that they did and obtain

information about causation with particular regard to the affect of the introduction

of the EC procurement rules on overall partnered project performance. In other

words, if the results indicated that OJEU framework projects performed worse than

partnered projects, why? Inevitably, some respondents within the sample were

likely to have more experience of this topic than others. This enabled such

respondents to provide qualitative opinion data that is not currently available from

secondary sources to be incorporated within discussion of the data analysis.



7.3 The Research Sample

The population that the research sample was drawn from incorporated clients,

consultants and contractors working within the RSL construction market. The

method used to select the sample consisted of identifying organisations within this

population that had experience of partnering. This was achieved by contacting

RSL clients and developing a short-list of suitable contacts who met these criteria.

It was assumed that by drawing a sample from those with experience of partnering

most would have at least limited experience with traditional procurement methods

(i.e. CCT) and the EC procurement rules recently applied to RSL’s. By analysing

the ‘general data’ in section 1 of the questionnaire, it was possible to discount any

respondents that had insufficient experience in the areas required.

A total of 60 questionnaires were issued; 20 to each sub-sample consisting of

clients, consultants and contractors. A total sample of 36 suitable responses was

collected with an overall response rate of 60%. The highest response rate was

from consultants at 85% (giving a sub-sample of 17) and the lowest response rate

was from contractors at 45% (giving a sub-sample of 9). The response rate of the

research sample is detailed in table 1.

Questionnaires Issued Questionnaires Received

Sample Category Number

Sample %

Number Sample %

% Response

Rate

Clients 20 33% 10 28% 50%

Consultants 20 33% 17 47% 85%

Contractors 20 33% 9 25% 45%

Total 60 100% 36 100% 60%

Table 1 – Research Sample: Number and Rate of Response [Naoum, 2004].

Information about the characteristics of the research sample was collected in

section 1 of the questionnaire where 2 questions were asked with categorised

answers in relation to length and type of experience relevant to the study. This

was used to assess whether the respondents level of experience was deemed

sufficient to give meaningful answers to the questionnaire suitable for analysis.



The first question asked respondents to categorise their years of experience

between 0-5, 5-10, 10-15, 15-20 and over 20 years. The results indicate that the

consultants are the most experienced sub-sample with 53% of respondents having

over 20 years experience. The clients appear to be the least experienced sub-

sample with 30% of respondents having less than 5 years experience. The total

sample can be considered highly experienced with 42% having over 20 years

experience. The length of experience of the research sample is detailed in table 2.

Number of Respondents (Experience in Years)

% of Respondents (Experience in Years)

Sample Category

0-5

5-1

0

10-1

5

15-2

0

Over

20

To

tal

0-5

5-1

0

10-1

5

15-2

0

Over

20

Clients 3 1 3 1 2 10 30% 10% 30% 10% 20%

Consultants 4 2 1 1 9 17 24% 12% 6% 6% 53%

Contractors 0 1 2 2 4 9 0% 11% 22% 22% 44%

Total 7 4 6 4 15 36 19% 11% 17% 11% 42%

Table 2 – Research Sample Professional Experience (Years)

The second question asked respondents to indicate their level of partnering

experience within the fields relevant to this study consisting of non-partnering

(CCT), project specific partnering, long term partnering, partnering with the supply

chain and OJEU framework agreements. The results indicate that the sample has

most experience in traditional tendering with 87% of respondents having some or

a lot of experience. Contractors have the most experience with 100% of

respondents in the same categories. Clients have the least experience with 70%

having some or very little experience.

All respondents indicated a high level of project specific partnering experience with

78% having some or a lot of experience. These results are reflected within the

sub-samples. Again, the total sample indicate a high level of experience with long

term partnering with 62% having some or a lot of experience. Consultants have

the most experience with 71% of respondents in the same category. Clients have

the least experience with 50% having some or very little experience.



The sample has least experience in the remaining categories of partnering with the

supply chain and OJEU framework agreements. This is not surprising as

partnering with the supply chain is generally focused on the contractor and it has

not been compulsory for RSL’s to comply with EC procurement rules until

relatively recently (see chapter 5). The results indicate that 51% the total sample

has none or very little experience with partnering the supply chain and 64% have

none or very little experience with OJEU framework agreements. Out of the sub-

samples, contractors have the most experience of partnering with the supply chain

with 88% of respondents having some or a lot of experience and clients have the

most experience of OJEU framework agreements with 40% of respondents having

some experience. The type and amount of experience of the research sample is

displayed in figure 5. Generally, the characteristics of the sample show that the

majority of respondents have sufficient levels of experience to be able to treat the

data obtained from the structured questionnaire as being from a normal population

and therefore suitable for more detailed analysis.

Professional Experience

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No

ne

Ve

ry L

ittle

So

me

A L

ot

All

No

ne

Ve

ry L

ittle

So

me

A L

ot

All

No

ne

Ve

ry L

ittle

So

me

A L

ot

All

No

ne

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ry L

ittle

So

me

A L

ot

All

No

ne

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ry L

ittle

So

me

A L

ot

All

Traditional Tendering Project Specific

Partnering

Long Term Partnering Partnering with the

Supply Chain

OJEU Framework

Area/Amount of Experience

% o

f R

es

po

nd

en

ts

Clients

Consultants

Contractors

Total Sample

Figure 5 – Research Sample Professional Experience (Type)



7.4 Method of Analysis

Sections 2 and 3 of the research questionnaire were designed to obtain ordinal

level data that could be analysed using both the descriptive and statistical

methods. The descriptive method was used to make visual observations of both

individual respondent and sample opinions on key performance factors and overall

project performance. Statistical analysis was used to test the significance of the

results observed using the descriptive method.

The descriptive method of analysis was used on the raw data collected in section

2 of the questionnaire to assess opinion on performance of partnered projects

compared with traditional competitively tendered projects in each of the key

performance factors. By analysing the mean opinion scores calculated for

questions 1 to 10, it was possible to assess opinion on overall performance for

both individual respondents and the sample. The descriptive method of analysis

was used on the raw data collected in section 3 of the questionnaire to assess

opinion on performance of partnered projects compared before and after the

introduction of the EC procurement rules in each of the key performance factors.

By assessing the mean opinion scores calculated for questions 11 to 20, it was

possible to assess opinion on overall performance of partnered projects compared

with traditional competitively tendered projects for both individual respondents and

the sample.

Statistical analysis could then be used to assess the significance of the results

observed in the descriptive analysis. If results are considered to be significant it

means that the difference observed is unlikely to have occurred by chance

[Coolican, 1995]. The student t-Test was used to compare the variance in the

means of the sample opinion scores calculated for overall project performance. By

stating the conclusions drawn from the descriptive analysis as hypothesis and the

opposites of the conclusions as null hypothesis, the significance of each

conclusion could be tested. Coolican (1995) states that the general level of

probability at which social scientists reject their null hypothesis is when the

differences occurring by chance alone is <0.05 (less than 5%).



By analysing the raw data obtained in section 2 of the research questionnaire and

testing the significance of the conclusions drawn from the descriptive analysis, it

was possible to achieve objective 2 of the study which was to asses whether the

adoption of partnering methods has improved RSL project performance. Chapter 4

identified that adoption of partnering methods would help to improve RSL

construction project performance in key areas such as time, cost and quality

through the reduction of CCT.

By analysing the raw data obtained in section 3 of the research questionnaire and

testing the significance of the conclusions drawn from the descriptive analysis, it

was possible to achieve objective 4 of the study which was to asses how

compliance with the EC procurement rules affects the performance of RSL

partnered projects. Chapter 5 suggested that the introduction of EC procurement

rules would make RSL partnering practices more bureaucratic and possibly reduce

the performance of partnered projects.

The t-Test was also used to assess the significance of the difference between the

mean opinion scores calculated for overall project performance in section 2 of the

research questionnaire and the mean opinion scores calculated for overall project

performance in section 3 of the research questionnaire. This analysis was used to

identify whether the performance of partnered projects compared with traditional

competitively tendered projects was better than the performance of OJEU

framework projects compared with partnered projects. This analysis was used to

achieve objective 5 of the study which was to identify whether the introduction of

the EC procurement rules is detrimental to RSL partnering practices.

LPD-M-040 Dissertation Analysis of the Results


8.0 Analysis of the Results

The raw data collected consists of ordinal ranking opinion scores allocated by

each of the respondents to all of the questions in the research questionnaire. The

scores represent the level of agreement/disagreement with each of the statements

relating to key project performance factors when comparing RSL projects procured

through the methods under investigated. The raw data collected from the

questionnaire is displayed as a table in appendix 4.

In order to analyse the results obtained from the research questionnaire, the mean

ordinal ranking score of responses was calculated for each of the questions asked.

By calculating the mean score for each sample, it was possible to analyse not only

overall sample opinion but also how opinion varied between the sub-samples. The

mean comparison method was chosen as it was felt that this gave a more

accurate interpretation of the results than percentage analysis. Although the

sample size of 36 is a reasonable size for analytical purposes, the sub-samples

are much smaller. The contractor and client sub-samples contain only 10 and 9

respondents respectively. If percentage analysis was used on such a small sample

the results could be distorted as 1 respondents opinion would equate to 10% of

the sample.

8.1 Descriptive Analysis

The results obtained from section 2 of the research questionnaire (questions 1 to

10) can be seen in table 3 and are displayed in figure 6. The results are very

positive and show that the sample generally agreed with all of the statements

made in relation to improved project performance when comparing partnered

projects with traditional competitively tendered projects. All except one question

recorded a mean sample opinion score above the indifference score of 3. With

regard to overall project performance, the sample generated a mean opinion score

of 3.7 which is above the indifference score of 3. This result implies that the

sample agreed that overall project performance is improved through partnering

when compared with traditional competitive tendering.



Question Number

Sample 1 2 3 4 5 6 7 8 9 10

Mean Total Score

(Q 1-10)

Clients 3.6 3.7 3.4 3.6 3.9 4.0 4.1 3.9 3.3 3.7 3.7

Consultants 3.7 3.6 3.6 3.4 3.7 4.1 3.7 3.9 2.4 3.4 3.5

Contractors 3.4 3.9 3.8 3.8 3.8 4.7 4.3 4.3 2.6 4.2 3.9

Total Sample 3.6 3.7 3.6 3.5 3.8 4.2 4.0 4.0 2.7 3.7 3.7

Table 3 – Sample Mean Opinion Scores: Questions 1-10

Sample Mean Opinion Scores for Questions 1-10

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1 2 3 4 5 6 7 8 9 10

Question Number

Sam

ple

Mean

Op

inio

n S

co

re

Clients

Consultants

Contractors

Total Sample

Figure 6 – Sample Mean Opinion Scores: Questions 1-10

The highest sample mean opinion score of 4.2 was recorded against question 6

which stated that working relationships are improved through partnering resulting

in less litigation/fewer claims (when compared with traditional competitive

tendering). This result implies that there is a very high level of agreement with this

statement and that better working relationships is the most improved key project

performance factor when comparing partnered projects with traditional

competitively tendered projects.



This result reflects the theory behind partnering discussed in chapter 4 which

stated that in order for project performance to be improved, the project team

needed to form less adversarial relationships adopting a culture of trust and

openness with agreed methods for problem resolution.

The second highest sample mean opinion score of 4.0 was recorded against both

questions 7 and 8. Question 7 stated that there is increased opportunity for

research and development though partnering and question 8 stated that there is

increased scope for continuous project by project performance improvement

through partnering (when compared with traditional competitive tendering).

Perhaps not surprisingly, both statements are closely related. Rethinking

Construction (1998) stated that in order to achieve sustained performance

improvement there needed to be much higher investment in research and

development to enable innovation in products and processes. In other words,

these two key project performance factors are exponentially linked. Both results

imply that there is a very high level of agreement with each statement.

The third highest sample mean opinion score of 3.8 was recorded against question

5 which stated that better project quality is achieved in terms of end user/client

satisfaction through partnering (when compared with traditional competitive

tendering). Quality is a term that can also be defined as Value for Money (VFM)

which is integral to RSL project performance. RSL’s must demonstrate VFM in

order to qualify for Housing Corporation grants which fund the majority of their

construction projects. This is essentially why RSL’s have become industry leaders

in terms partnering. Partnering enables improvement in quality through better

working relationships, increased investment in research and development and

continued project by project improvement. All of these factors contribute to the

production of an improved product through an improved project process.

The lowest sample mean opinion score of 2.7 was recorded against question 9

which stated that informality of the partnering agreement caused concern or

created problems (when compared with traditional competitive tendering). This is

an interesting result for two reasons.



Firstly, it is the only sample mean opinion score recorded in section 2 of the

research questionnaire that falls below the indifference score of 3, therefore

implying a reduction in project performance. Secondly, as discussed in section 7.2,

question 9 was deliberately worded in a negative context and the ordinal ranking

scale was reversed accordingly in order to provide a check that the answers given

by each respondent were considered and not systematically generated. Therefore,

a sample mean score above the indifference score of 3 is still required to imply

improvement for this key project performance factor when comparing partnered

projects with traditional competitively tendered projects. This result actually implies

that the majority of respondents agree with the negatively worded statement,

implying a reduction in project performance. It could also be construed to imply

that the results for this question were systematically generated as opposed to

considered. However, there is also a noticeable difference in the mean opinion

scores recorded between the sub-samples. Whilst the consultant and contractor

samples recorded mean scores of 2.4 and 2.6 respectively (below the indifference

score of 3), the client sub-sample recorded a mean score of 3.3 implying that they

disagreed with this statement. An explanation for this result could be that

consultants and contractors feel more exposed by the relative ‘contractual

informality’ of partnering discussed in chapter 4. Clients take much more of a lead

role through partnering meaning that they are more involved with the project

process than they would be using traditional methods. They may therefore see the

partnering method as more formal due to their own increased involvement.

One of the key arguments for partnering in Constructing the Team (1994) and

Rethinking Construction (1998) was that traditional procurement methods

frequently delivered projects both late and over budget. This was attributed to

fragmentation of the project team and the construction process through CCT.

Question 3 stated that better project time performance is achieved in terms of

programme through partnering (when compared with traditional competitive

tendering) and a total sample mean score of 3.6 was recorded with little variance

between the sub-samples. This result implies that the sample agrees that

partnering improves overall project performance in terms of time when compared

with traditional competitive tendering.



Question 4 stated that better project value is achieved in terms of cost through

partnering (when compared with traditional competitive tendering) and a sample

mean opinion score of 3.5 was recorded. This result implies that the sample

agrees that partnering improves overall project performance in terms of cost when

compared with traditional competitive tendering.

Overall, the results obtained from the raw data collected in section 2 of the

research questionnaire are very positive and indicate that the sample agrees that

project performance is improved through partnering when compared with

traditional competitive tendering. The total sample and the sub-sample results all

indicate a strong level of agreement with all of the key performance factor

statements except for question 9. These results are supported by the mean

opinion score calculated for overall project performance (mean of the sample

mean scores calculated for questions 1 to 10). The total sample mean opinion

score for overall project performance is 3.7 when comparing partnered projects

with traditional competitively tendered projects. The client, consultant and

contractor sub-samples scored 3.7, 3.5 and 3.9 respectively. All are clearly above

the indifference score of 3 and closer to the agree value of 4. However, these

results also imply that out of the sub-samples contractors agree the most that

overall project performance is improved through partnering (when compared with

traditional competitive tendering), clients the second most and consultants the

least. These sub-sample results possibly go against the grain of the theory

discussed in chapter 4 which suggested that partnering is a client led initiative to

improve project performance and product quality. We would therefore have

expected to see the clients agree most that project performance is improved

through partnering as opposed to the contractors.

The results obtained from section 3 of the research questionnaire (questions 11 to

20) can be seen in table 4 and are displayed in figure 7. The results are clearly

very different to those obtained in section 2 in that they show a far more negative

trend. The sample generally disagreed with all of the statements made in relation

to improved project performance when comparing OJEU framework projects with

partnered projects.



Question Number Sample

11 12 13 14 15 16 17 18 19 20

Mean Total Score

(Q 11-20)

Clients 2.1 2.1 2.6 3.0 3.2 3.2 3.4 3.1 3.1 3.3 2.9

Consultants 1.9 2.0 2.4 2.4 2.7 2.8 2.6 2.9 3.2 2.5 2.5

Contractors 2.4 2.4 2.9 2.9 2.9 2.8 2.6 2.6 3.2 3.1 2.8

Total Sample 2.1 2.1 2.6 2.7 2.9 2.9 2.8 2.9 3.2 2.9 2.7

Table 4 – Sample Mean Opinion Scores: Questions 11-20

Sample Mean Opinion Scores for Questions 11-20

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

11 12 13 14 15 16 17 18 19 20

Question Number

Sa

mp

le M

ea

n O

pin

ion

Sc

ore

Clients

Consultants

Contractors

Total Sample

Figure 7 – Sample Mean Opinion Scores: Questions 11-20

All except one question recorded a mean sample opinion score below the

indifference score of 3. With regard to overall project performance, the sample

generated a mean opinion score of 2.7 which is again below the indifference score

of 3. This result implies that the sample disagreed that overall project performance

is improved when comparing OJEU framework projects with partnered projects.



The highest sample mean opinion score of 3.2 was recorded against question 19

which stated that informality of the OJEU process caused concern or created

problems (when compared with partnered projects). As with question 9 in section 2

of the research questionnaire, this is an interesting result for two reasons. Firstly, it

is the only sample mean opinion score recorded in section 3 of the research

questionnaire that falls above the indifference score of 3, therefore implying an

improvement in project performance. Secondly, as discussed in section 7.2,

question 19 was deliberately worded in a negative context and the ordinal ranking

scale was reversed accordingly. This was done in order to provide a check that the

answers given by each respondent were considered and not systematically

generated. As with question 9 in section 2 of the research questionnaire, this result

could also be construed to imply that the results for this question were

systematically generated as opposed to considered. The total sample opinion was

also reflected in the mean opinion scores recorded for the sub-samples. All

recorded a mean opinion score above the indifference score of 3, implying that

they disagreed with the statement. An explanation for this result could be that

compliance with the EC procurement rules increases the formality of the partnered

project process. This would support the result recorded for question 9 of the

research questionnaire which implied that informality of the partnering agreement

caused concern or created problems (when compared with traditional competitive

tendering).

The lowest sample mean opinion score of 2.1 was recorded against both

questions 11 and 12. Question 11 stated that the duration of the procurement/

tendering programme is reduced through the OJEU process and question 12

stated that the cost of the procurement/tendering programme is reduced through

the OJEU process (when compared with partnered projects). Both results imply

that there is a high level of disagreement with each statement which supports the

findings in chapter 5 of the report. The literature reviewed suggested that the EC

procurement rules made the RSL partnering process more bureaucratic through

increased CCT. Arguably, the PQQ process restricts the more flexible

procurement approach encouraged in partnered projects enforcing a more

traditional two-staged competitive tendering approach.



This will understandably increase the duration and cost of the procurement

process when compared with the theoretical model of partnering which identifies

the reduction of CCT as key to improving overall project and industry performance.

The results imply that the sample agree that compliance with the EC procurement

rules reduces the performance of OJEU framework projects when compared to

partnered projects most in relation to the procurement time and cost.

Questions 13, 14 and 15 were related to the key performance factors of time, cost

and quality. Question 13 stated that better project time performance is achieved in

terms of programme through the OJEU process, question 12 stated that better

project value is achieved in terms of cost through the OJEU process and question

15 stated that better project quality is achieved in terms of end user/client

satisfaction through the OJEU process (when compared with partnered projects).

All of these questions recorded sample mean opinion scores below the

indifference score of 3 which implies that the sample disagree with the statements

and believe that these key performance factors are not improved when comparing

OJEU framework projects with partnered projects. Each question scored 2.6, 2.7

and 2.9 respectively.

.

The most noticeable difference in the mean opinion scores recorded between the

sub-samples in section 3 was that clients recorded scores equal to or above the

indifference score of 3 for questions 14 and 15 discussed above generating mean

opinion scores of 3.0 and 3.2 respectively. They also recorded mean opinion

scores above the indifference score of 3 for questions 16, 17, 18 and 20 which

related to the key performance factors of better working relationships, increased

research and development, sustained project by project improvement and fairer

balance of risk, generating mean opinion scores of 3.2, 3.4, 3.1 and 3.3

respectively. These results imply that clients agree that project performance is

actually improved when comparing OJEU framework projects with partnered

projects in many of the key performance factors. However, the client mean opinion

score for overall project performance of 2.9 is below the indifference score of 3

which implies that overall they do not agree that project performance is improved

when comparing OJEU framework projects with partnered projects.



Overall, the results obtained from the data collected in section 3 of the research

questionnaire are negative and indicate that the sample disagrees that partnered

project performance is improved through compliance with the EC procurement

rules (OJEU framework projects). The total sample results imply disagreement

with all of the key performance factor statements except for question 19. These

results are supported by the mean opinion score calculated for the overall

performance of OJEU framework projects compared with partnered projects. The

total sample mean opinion score for overall project performance produces a figure

of 2.7 implies that the sample disagrees that overall partnered project performance

is improved through compliance with the EC procurement rules.

8.2 Statistical Analysis

Statistical analysis was used to assess the significance of the conclusions drawn

from the results observed in the descriptive analysis. The student t-Test was used

to compare the variance in the means of the sample opinion scores calculated for

overall project performance. This was done by using the t-Test (two-sample

assuming equal variances) option in the Microsoft excel package. The assumed

hypothesised mean difference was 0 which represents the probability of obtaining

the results by chance if there is no difference between the means. In each case a

two-tailed test was assumed, where the direction of the test is not specified.

The main conclusion drawn from the descriptive analysis of the results obtained in

section 2 of the research questionnaire is that overall project performance is

improved through partnering when compared with traditional competitive

tendering. This was implied by the total sample generating a mean opinion score

of 3.7 for overall partnered project performance which is clearly above the

indifference score of 3. The differences between the sub-sample mean opinion

scores for overall project performance is shown in figure 8. The purpose of the

statistical testing was to establish whether the observed differences in opinion

between the sub-samples were significant. In order to do this a series of

hypotheses were formulated for testing which comprised conclusions drawn from

the results observed in the descriptive analysis.



Perceived Overall Performance of Partnered Projects compared with

Traditional Competitively Tendered Projects

3.3

3.4

3.5

3.6

3.7

3.8

3.9

4.0

Clients Consultants Contractors

Sample Sub-Group

Sam

ple

Mean

Sco

re

Figure 8 – Perceived Overall Performance of Partnered Projects compared with

Traditional Competitively Tendered Projects

As discussed in section 8.1, the mean opinion scores for the sub-samples go

against the grain of the theory discussed in chapter 4, which suggested that the

client sub-sample would agree the most that overall project performance is

improved through partnering.

The hypotheses tested in relation to section 2 of the research questionnaire were;

1. Contractors agree more than clients that overall project performance is


tendering.

2. Contractors agree more than consultants that overall project performance is


tendering.

3. Clients agree more than consultants that overall project performance is


tendering.



The corresponding null hypotheses were;

1. Contractors agree no more than clients that overall project performance is


tendering.

2. Clients agree no more than consultants that overall project performance is


tendering.

3. Contractors agree no more than consultants that overall project

performance is improved through partnering when compared with traditional

competitive tendering.

The results for each t-Test are displayed as tables in appendix 5. In each case the

t-Test generated a t-value with a corresponding probability score of >0.05 when

compared with the two-tail critical value of t. This meant that the null hypotheses

had to be accepted for each test. These results imply that although there is overall

agreement that performance of partnered projects is improved when compared

with traditional competitively tendered projects, there is no significant difference in

the level of agreement between the sub-samples. This confirms that the mean

opinion score generated for the overall performance of partnered projects can be

considered to be from a normal population as there is no significant difference of

opinion between the sub-samples.

The main conclusion drawn from the descriptive analysis of the results obtained in

section 3 of the research questionnaire is that overall partnered project

performance is reduced through compliance with the EC procurement rules. This

was implied by the total sample generating a mean opinion score of 2.7 for overall

OJEU framework project performance compared with partnered project

performance which is clearly below the indifference score of 3. The differences

between the sub-sample mean opinion scores for overall project performance is

shown in figure 9. The purpose of the statistical testing was again to establish

whether the observed differences in opinion between the sub-samples were

significant.



Perceived Overall Performance of OJEU Framework Projects


2.3

2.4

2.5

2.6

2.7

2.8

2.9

3.0

Clients Consultants Contractors

Sample Sub-Group

Sam

ple

Mean

Sco

re

Figure 9 – Perceived Overall Performance of OJEU Framework Projects


In order to do this a series of hypotheses were formulated for testing which

comprised conclusions drawn from the results observed in the descriptive

analysis. The mean opinion scores for the sub-samples imply that the client sub-

sample disagree the least that overall performance of OJEU framework projects is

improved when compared with partnered projects. Chapter 5 suggested that RSL

clients were likely to disagree most of the sub-samples, as compliance with the EC

procurement rules can restrict the advantages to be gained through partnering.

The hypotheses tested in relation to section 3 of the research questionnaire were;

4. Clients disagree less than consultants that overall partnered project

performance is improved through introduction of the EC procurement rules.

5. Clients disagree less than contractors that overall partnered project


6. Contractors disagree less than consultants that overall partnered project




The corresponding null hypotheses were;

4. Clients disagree no less than consultants that overall partnered project


5. Clients disagree no less than contractors that overall partnered project


6. Contractors disagree no less than consultants that overall partnered project


The results for each t-Test are displayed as tables in appendix 5. In each case the

t-Test generated a t-value with a corresponding probability score of >0.05 when

compared with the two-tail critical value of t. This meant that the null hypotheses

had to be accepted for each test. These results imply that although there is overall

disagreement that performance of OJEU framework projects is improved when

compared with partnered projects, there is no significant difference in the level of

disagreement between the sub-samples. Again, the results confirm that the mean

opinion score generated for the overall performance of partnered projects can be

considered to be from a normal population as there is no significant difference of

opinion between the sub-samples.

With the previous tests confirming that overall opinion of the total sample can be

considered as being from a normal population, a further t-Test was used to assess

the significance of the difference between the mean opinion score calculated for

overall performance of partnered projects (3.7) and the mean opinion score

calculated for overall performance of OJEU framework projects (2.7). This analysis

was used to identify whether the performance of partnered projects compared with

traditional competitively tendered projects was better than the performance of

OJEU framework projects compared with partnered projects. In order to do this the

following hypothesis was formulated;

7. Partnered projects compared with traditional competitively tendered

projects perform better than OJEU framework projects compared with

partnered projects.



The corresponding null hypothesis was;

7. Partnered projects compared with traditional competitively tendered

projects perform the same as OJEU framework projects compared with

partnered projects.

The results for this t-Test are also displayed as a table in appendix 5. On this

occasion, the t-Test generated a t-value with a corresponding probability score of

<0.05 when compared with the two-tail critical value of t. This meant that the

hypothesis could be accepted. Therefore, the statement that partnered projects

compared with traditional competitively tendered projects perform better than

OJEU framework projects compared with partnered projects is significant at the P

<0.05 level.

The purpose of this statistical test was to determine whether the introduction of the

EC procurement rules has had a significantly detrimental effect on RSL partnered

project performance by comparing the perceived performance of partnered

projects with the perceived performance of OJEU framework projects. In essence,

the result of this test goes some way to achieving this objective. What it tells us is

that the performance of partnered projects (compared with traditional competitively

tendered projects) is significantly better than the performance of OJEU framework

projects (compared with partnered projects). Unfortunately, what this test does not

tell us is how significant the difference in performance of partnered projects is

compared directly with OJEU framework projects, as the variables between the

two means being tested are not constant.

LPD-M-040 Dissertation Conclusion


9.0 Conclusion

The aim of the study was to establish whether compliance with the EC

procurement rules has been detrimental to RSL partnering practices.

The first objective was to review the procurement practices of RSL construction

industry clients. By reviewing relevant literature, a chronological appraisal of RSL

procurement practice was produced. This concluded that RSL procurement

practices have evolved over the last 20 years. Traditionally, RSL’s had procured

construction work through traditional lump-sum or design and build methods,

appointing consultants through the process of selection and contractors through

the process of competitive tendering, made compulsory through the Local

Government Planning and Land Act (1980). More recently, RSL’s were

encouraged to adopt a partnering approach to procurement in response to the

recommendations of the Latham and Egan reports, which identified the

competitive tendering process as detrimental to overall project performance. In

2000 the Local Government Act (1999) replaced mandatory CCT with the criteria

of Best Value, thus enabling Public Authorities to adopt the partnering approach.

Since 10 September 2004, RSL’s have had to comply with the EC public

procurement directives and in order to continue partnering have had to form

framework agreements through the restricted procedure, which ultimately reverts

back to a more traditional two-stage competitive tendering approach.

The second objective was to asses whether the adoption of partnering methods

has improved RSL project performance (as implied by the conclusions drawn from

the literature review). The research questionnaire collected ordinal level opinion

data from the research sample in relation to key performance statements when

comparing the performance of partnered projects with traditional competitively

tendered projects. The results imply that the sample agrees that overall

performance is improved through partnering and there is no significant difference

in the level of agreement between the sub-samples. More detailed analysis of the

results implies that the most improved key performance factor is better working

relationships.



The third objective was to identify how compliance with the EC procurement rules

affects RSL procurement practices. This was achieved through the review of

current literature in relation to the subject, identifying what changes RSL’s would

have to make to their current procurement practices in order to comply with the

rules. The conclusion drawn from the review was that compliance with the rules

would change the culture of RSL’s, particularly with regard to partnering. The rules

make open competition between the EU member states mandatory for publicly

funded contracts exceeding certain value thresholds determined by the EC. All

RSL contracts exceeding the value thresholds must be advertised through a

standard form OJEU notice which appears to be bureaucratic, increasing the time

and cost of the procurement process. Partnering can only be achieved through

formation of an OJEU framework agreement, procured through the restricted

procedure which requires a two-stage competitive tender approach. The selection

criteria of the first stage (PQQ) is limited to company profile information more

suited to large, well established firms meaning that smaller firms with existing

successful partnering relationships may not be considered.

The fourth objective was to asses how compliance with the EC procurement rules

affects the performance of RSL partnered projects. The conclusion drawn from the

literature review was that performance of partnered projects would be reduced.

The research questionnaire collected ordinal level opinion data from the research

sample in relation to key performance statements when comparing the

performance of OJEU framework projects with partnered projects. The results

imply that the sample disagreed that overall performance of OJEU framework

projects is improved when compared with partnered projects and there is no

significant difference in the level of disagreement between the sub-samples. By

disagreeing that performance is improved, the result implies that partnered project

performance is reduced through compliance with the EC procurement rules. More

detailed analysis of the results implies that the most reduced factors of partnered

project performance are the time and cost of the procurement/tendering process.

However, the results also implied that partnered project performance is actually

improved through compliance with the EC procurement rules in the key

performance factor of contract formality.



The fifth objective was to identify whether the introduction of the EC procurement

rules is detrimental to RSL partnering practices. The conclusions drawn from the

literature review and analysis of the data collected in section 3 of the research

questionnaire implied that the introduction of the EC procurement rules has been

detrimental to RSL partnering practices. A further statistical test was conducted to

establish whether there was a significant difference in the research samples

opinion of the performance of partnered projects compared with OJEU framework

projects. This concluded that partnered projects (compared with traditional

competitively tendered projects) perform better than OJEU framework projects

(compared with partnered projects) at a significance level of P <0.05. Had the

performance of OJEU framework projects been the same or better than partnered

projects we would have expected to see no significance in this result. Therefore,

the conclusion that can be drawn is that the introduction of the EC procurement

rules is detrimental to RSL partnering practices in terms of overall project

performance.

Integral to achieving the aim of the research study were two key research

questions which were; does partnering improve RSL construction project

performance? and does compliance with the EC procurement rules reduce the

performance of RSL partnered construction projects?

It was anticipated that the answer to the first question would be that partnering

does improve RSL construction performance. The conclusions drawn from the

study support this statement. This question needed to be answered in order to be

able to use partnering as a benchmark of best practice against which the

performance of OJEU framework projects could be compared.

It was anticipated that the answer to the second question would be that

compliance with the EC procurement rules would reduce the performance of RSL

partnered projects. The conclusions drawn from the study also support this

statement. More detailed analysis of the results identifies how performance is

affected in each of the key performance factors.



Through achieving the objectives and answering the key research questions the

aim of the study has been met. The report is able to conclude that compliance with

the EC procurement rules has been detrimental to RSL partnering practices. The

rules increase the bureaucracy of the procurement process, particularly with

regard to partnering which can only be achieved through formation of an OJEU

framework agreement. The EU directives require such frameworks to be formed

through the restricted procedure similar to the more traditional two-stage

competitive tendering approach. This enforced change of culture has been

detrimental to RSL partnering practice in terms of overall project performance and

more specifically in the time and cost of the procurement/tendering process.

Through conducting the study, issues were identified that need to be addressed in

order for RSL’s to be able to continue partnering in a practical manner that still

abides with EU law. Firstly, the restricted procurement process needs to be made

less bureaucratic for the formation of OJEU framework agreements. There is

evidence to suggest that the restricted process goes against the Latham and Egan

principles and restricts the benefits that partnering can offer. Unless this issue is

addressed, it may become less practical for RSL’s to partner the majority of their

construction contracts, which may lead them back to more traditional methods that

have been proven to be less effective in terms of performance. This problem is

emphasised by the maximum duration of the OJEU framework agreement being

only 4 years. If this was doubled to a more realistic long-term duration of 8 years,

the partnership would have a more realistic amount of time to deliver sustained

project by project improvement that would off-set the short-term disadvantages

associated with the bureaucratic procurement process.

Another negative aspect in relation to existing RSL partnering practice is the rule

of aggregation. These rules are most likely to apply to smaller firms who

successfully partner with RSL’s on several smaller contracts. Aggregation rules

require all such firms with a total value of work exceeding the value thresholds to

be selected in accordance with the EC directives (i.e. be part of an OJEU

framework agreement). Due to the limitations of the data that can be collected

through the PQQ, selection tends to favour larger, more established firms.



Existing relationships cannot be taken into consideration as this may be construed

as discrimination, meaning that these smaller firms are less likely to be selected

despite their proven track record. The PQQ should be able to recognise and

reward good practice, as this forms part of the essence of partnering

Although the study has produced some conclusive results, there are some

fundamental limitations with the data collected for the purposes of statistical

analysis. These limitations stem back to compilation of the research questionnaire

and the data that was collected from it.

The two main investigative sections of the research questionnaire provided for the

collection of opinion data relating to the performance of partnered projects and

OJEU framework projects, but it did not allow for the collection of data that could

be used to test these two variables directly. This could have been achieved by

changing the wording of the questions in section 3 to compare the performance of

OJEU framework projects with traditional competitively tendered projects (as

partnered projects were in section 2). This would have made traditional

competitively tendered projects a constant variable between the two sets of data

that would have provided a benchmark from which overall partnered and OJEU

framework project performance could have been measured. This would have

enabled more meaningful statistical analysis to be conducted to determine the

significance of the difference in performance between partnered and OJEU

framework projects.

Another limitation of the study is the type of statistical test that was used. The

student t-Test is designed for use with parametric (interval level) data where as the

data collected is non-parametric (ordinal level) data. The reasoning behind using

the parametric test is that it is more robust and even when used on data that do

not meet the assumptions of the test exactly, still give fairly accurate probability

estimates. They do not break down, or produce many errors in significance

decisions unless the assumptions are quite poorly met [Coolican, 1995]. Through

the course of the study alternative methods of statistical analysis were considered

and experimented with that were designed for use with ordinal data.



However, when applying the tests to the data collected the results implied no level

of significance despite a clear visual difference between the means being tested.

The final and most obvious limitation of the research data is the size of the

research sample. The sample size of 36 respondents is small compared with the

total population and therefore might not represent an accurate reflection of the

population under consideration. This limitation is emphasised through the size of

the sub-samples. Because of this it has had to be accepted that some of the

results may not represent a true interpretation of overall industry opinion. With

more time and resource, the study could be enhanced through collection of a

larger research sample, possibly incorporating respondents from other countries

within the EU.

The primary conclusion drawn from the study is that compliance with the EC

procurement rules is detrimental to RSL partnering practices. This conclusion

invites further research in two key areas;

1. Quantitative measurement of the impact of the EC procurement rules.

2. Identification of how the EC procurement rules could be amended to

improve partnered project performance.

Quantitative measurement of construction costs and programmes could be used to

assess the actual difference in the overall performance of RSL partnered projects

compared with OJEU framework projects. The existing KPI system used in the UK

might provide an appropriate toolkit. Results from a quantitative measurement

study might provide evidence that would necessitate further study into how the EC

procurement rules could be amended to improve partnered project performance.

This would require careful analysis of the EC procurement directives in conjunction

with EU law to establish if this is possible within the current boundaries. If not, it

may also identify the need for amendments to be made to the directives

themselves.

LPD-M-040 Dissertation References & Bibliography


10.0 References & Bibliography

10.1 References

Achilles & Bevan-Brittan (2005) EC Procurement Regulations – A Brief Guide

for RSL’s London: Achilles & Bevan-Brittan

Ashworth, A. (2001) Contractual Procedures in the Construction Industry,

Oxford: Longman

Bennett, J. & Jayes, S. (1995) Trusting the Team: The best practice guide to

partnering in construction, London: Centre for Strategic Studies in Construction

Bennett, J. & Jayes, S. (1998) The Seven Pillars of Partnering: A Guide to

Second Generation Partnering, London: Thomas Telford

Bennett, J. & Pearce, S. (2006) Partnering in the Construction Industry: A

Code of Practice for Strategic Collaborative Working, Oxford: Butterworth-

Heinemann

Birkby, J. (2004) Buying into EU Procurement, Project, October 2004, 21

Burgess, G. (2005) BPG-M-523 Procurement & Management of Construction

Lecture Notes, London: South Bank University

Communities Scotland (2004) Building a Better Deal: Procurement Guide for

Registered Social Landlords, Edinburgh: Scottish Executive

Construction Task Force (1998) Rethinking Construction, London: HM

Stationery Office

Coolican, H. (1995) Introduction to Research Methods and Statistics in

Psychology, London: Hodder & Stoughton



ECI (2000) Partnering in the Social Housing Sector: A Handbook, London:

Thomas Telford Ltd.

Frederick, D. (1994) Why Compulsory Competitive Tendering for Local

Government is Not as Good as Privatisation, London: Libertarian Alliance

Hornagold & Hills Management Consultants (1998) Procurement Routes

Seminar Pack, London: Overbury

Jenkins, C. (2004) Working with RSL’s, London: Paragon Strategies Social

Sector Solutions

Latham, M. (1994) Constructing the Team, London: HM Stationery Office

Lewis, S. et al (2004) Tolleys Guide to Construction Contracts: Volume 1,

Hampshire: LexisNexis UK

Naoum, S. (2004) Dissertation Research and Writing for Construction

Students, Oxford: Elsevier Butterworth-Heinemann

NJCC (1990) Code of Practice for Single Stage Selective Tendering, London:

RIBA

Pearson, S. (2005) BPG-M-504 Economics of the Construction Sector:

Structure of the Industry Lecture Notes, London: South Bank University

Rabbetts, B. (2007) Tell Us Where It Hurts, Building Magazine, 19 January 2007,

36

Rawlinson, S. (2006) Procurement: Public Sector Projects, Building Magazine,

24 November 2006, 52-56

Scottish Executive (2002) Building a Better Deal: Procurement Guide for

Registered Social Landlords, Edinburgh: Communities Scotland



Scottish Homes (2000) Procurement and Partnering: Policy Advice Note,

Edinburg: Scottish Homes, The National Housing Agency

The Comptroller and Auditor General (2001) Modernising Construction, London:

The Stationery Office

Trowers & Hamlins (2004) Projects & Construction – EU Procurement Advice

for RSL’s, London: Trowers & Hamlins

Turner, A. (1990) Building Procurement, Basingstoke: Macmillan

http://www.nhs-procure21.gov.uk

http://www.partnershipsuk.org.uk

http://www.tendersdirect.com

10.2 Bibliography

Clegg, F. (1982) Simple Statistics: A Course Book for the Social Sciences,

Cambridge: Cambridge University Press

Cooke, B. & Williams, P. (1998) Construction Planning, Programming &

Control, Basingstoke: Palgrave

European Documentation (1989) Public Procurement and Construction –

Towards an Integrated Market, Luxembourg: Office for Official Publications of

the European Communities

Roe, S. & Jenkins, J. (2003) Partnering and Alliancing in Construction

Projects, London: Sweet & Maxwell

Thomas, G. & Thomas, M. (2005) Construction Partnering & Integrated

Teamworking, London: Blackwell Publishing



http://www.constructingexcellence.org.uk

http://www.hm-treasury.gov.uk/pub/html/gccp

http://www.lsbu.ac.uk/lrc/

http://www.ogc.gov.uk/index

http://simap.eu.int

http://ted.publications.eu.int/official

LPD-M-040 Dissertation Acronyms & Abbreviations


11.0 Acronyms & Abbreviations

BGPL Bodies Governed by Public Law

CCT Compulsory Competitive Tendering

CIB Construction Industry Board

DETR Department of the Environment, Transport and Regions

EC European Commission

ECJ European Court of Justice

EU European Union

HC Housing Corporation

JCT Joint Contract Tribunal

KPI Key Performance Indicators

LIFT Local Infrastructure Finance Trusts

MMC Modern Methods of Construction

M4I Movement for Innovation

NAO National Audit Office

NHS National Health Service

NJCC National Joint Consultative Committee for Building

ODPM Office of the Deputy Prime Minister

OJEU Official Journal of the European Union

P Probability

PFI Private Finance Initiative

PIN Prior Information Notice

PPC Project Partnering Contract

PQQ Pre-Qualification Questionnaire

PSCP Principal Supply Chain Partner

RSL Registered Social Landlord

VFM Value for Money

LPD-M-040 Dissertation Appendix 1


Appendix 1 – Basic Procurement Systems

2.1 Traditional Procurement

Traditional procurement (or single stage competitive tendering) requires the

completion of full detailed design drawings and the preparation of bills of quantities

prior to inviting contractors to bid through selective competitive tendering. Figure

10 displays the main characteristics of the traditional system.

When the full design is completed before the tender documents are issued, the

traditional form of procurement offers the following advantages:

• fully co-ordinated and detailed trade interfaces prior to starting work on site.

• design solutions resolved in advance of works being implemented on site.

• post contract changes kept to a minimum reducing the likelihood of

variations resulting in additional costs.

• cost certainty achieved prior to construction with an accurate contract sum

established on the basis of a completed design.

The potential disadvantages of traditional procurement can include:

• increasing the time taken before works start on site as design and

construction are consecutive processes.

• little flexibility for introducing major variations and amending the programme

without generating claims for additional costs and/or delay [Burgess, 2005].

Alternative forms of the traditional procurement process can be used to achieve

such benefits as the early involvement of a contractor and/or the overlap of the

design and construction stages. Under a two stage selective competitive tender,

the main contractor is appointed on the basis of a tender which incorporates a

pricing document related to only preliminary design information. At this first stage,

there will inevitably be a large number of provisional sums. Cost certainty cannot

be achieved until the second stage tender is complete when a detailed design and

accurate quantities are available.



Figure 10 – Components of the traditional system [Turner, 1990: p. 49].

The sequence of the tender processes will be determined by the optimum timing

for the contractor to join the team and provide pre-construction advice on build-

ability, life cycle costs, sustainability, value engineering, risk management, etc. A

balance must be struck between early contractor appointment when limited

information is available for competitive pricing, but maximum build-ability advice

can be provided and later contractor appointment when the former criterion is

strengthened but the latter weakened.



If properly managed, two stage tendering provides most of the benefits of the

traditional procurement route, in addition to:

• early contractor advice on build-ability, programming, planning and

construction methodology.

• improving contractor, design team and client relationships using partnering

principles (see chapter 4) to allow early working relationships to be

established on a teamwork basis.

• contractor consultation on, and involvement in, the selection of specialist

contractors thereby overcoming the contractual disadvantages of using

nominated sub-contractors.

• giving the client greater flexibility, within limits, to introduce variations or

amend the brief later in the process with less risk of contractors’ claims.

• allowing some design decisions to be deferred until later in the programme

[Ashworth, 2001].

2.2 Design and Build

Design and Build (D&B) procurement provides single point responsibility where the

contractor is responsible for both the design and construction processes. These

can overlap to achieve an earlier completion date. This form of procurement is

generally accepted as appropriate for fairly simple building types where few

changes are anticipated during the design and construction stages. The

Employers Requirements (ER’s) can be almost fully established at the outset of

the project and can be issued to contractors for tendering purposes. ER’s are

generally prepared by a quantity surveyor acting as an Employer’s Agent, to

describe the conditions under which the design and build contract will be let.

D&B offers a guarantee on cost. However, this form of procurement can result in

the client having less control of the detail of the project and less control over time,

cost and quality if changes should be required. Many RSL’s are obliged to

consider the D&B procurement route when a contractor or developer owns all or

part of a proposed site for development [Hornagold & Hills Management

Consultants, 1998]. Figure 11 illustrates the Design and Build model.



Figure 11 – Components of the design and build system [Turner, 1990: p. 46].

A hybrid of the D&B route occurs when the client appoints a design team, with the

intention of transferring their contracts to a D&B contractor at a pre-determined

stage of the design process (usually Stage D: Scheme Design). Under this

arrangement the design team is novated from the client to the contractor, a

process which can involve insurance pitfalls. Another disadvantage can be the risk

of weakening the consultant/contractor relationship.



However, advantages to the client include control of design team selection and the

scheme design. Where there is a D&B agreement with design team novation, the

quantity surveyor appointed can subsequently assume the role of client

representative and, as such, be bound by the terms of the contract while the client

would be independent.

The most vulnerable aspect of D&B contracts is quality control. There can be an

incentive for the contractor to reduce design and/or build quality as there is only

limited input from the architect/contract administrator. There is often little control of

the changes made to a scheme on site due to a requirement to maintain a

Guaranteed Maximum Price (see section 2.5). The contractor may also seek to

maximise his profit on what may have been an excessively competitive tender. A

robust brief and clearly specified ER’s must accompany any D&B contract to

overcome these potential weaknesses [Ashworth, 2001].

2.3 Management contracting

This form of procurement meets many of the criteria associated with early

contractor involvement. The overlap of design and construction activities can bring

earlier completion than traditional forms of procurement.

Management contractors’ tenders are fee based using a cost plan and a

description of works. The management contractor is employed directly by the

client and contracts with the works package contractors for the construction works.

The early appointment of the management contractor enables them to:

• provide construction knowledge to the design process with advice on

effective and economical building methods .

• work with the design consultants to select packages suitable for specialist

subcontractors.

• advise on programming.

• become part of the project team at an early stage avoiding adversarial

relationships and process fragmentation.



• continuously update the construction budget to account for variations as

each trade package is let. This provides flexibility by enabling amendment

of the work content in future packages to constantly adjust the cost plan in

line with the budget.

Figure 12 – Components of the Management System [Turner A, 1990: p. 54].

Advantages must be balanced against the potential disadvantages such as:

• management contracting can be more expensive.



• cost certainty is achieved later in the process as financial control relies on a

cost plan and the contract sum cannot be accurately predicted until the final

works package is awarded.

• if the management contractor has a financial interest in works contractors’

final accounts there may be a conflict of interest in acting effectively as a

consultant to the client.

• the management contractor may have no contractual liability for defects in

workmanship, only an obligation to use best endeavours to instruct works

contractors to remedy defects.

• a high level of knowledge and skill must be applied to the selection of the

right management contractor.

It is important that the design team has an understanding and experience of

meeting information flow requirements under a management contract route [Cooke

& Williams, 1998].

2.4 Construction Management

Construction management is a similar form of procurement to management

contracting, with the principal difference being that the construction manager has

similar professional status to the design team and each of the works package

contractors has direct contract with the client. The construction manager is

appointed on the basis of a competitive fee based on the quantity surveyor’s cost

plan and the design team’s description of works.

The advantages in employing this form of procurement are very similar to

management contracting (earlier site start, build-ability advice at design stage etc)

but the construction manager is more closely integrated with the design team.

The disadvantages are also similar to management contracting and there is a

larger administration and legal burden on the client due to the direct employment

of the potentially large number of works contractors. This also carries greater

commercial risk for the client [Ashworth, 2001].



Appendix 2 – Summary of the Latham & Egan Reports

Figure 13 – Summary of Constructing the Team (1994) [The Auditor and

Comptroller General, 2000]



Figure 14 – Summary of Rethinking Construction (1998) [The Auditor and

Comptroller General, 2000]



Appendix 3 – The Research Questionnaire



Appendix 4 – Raw Data Collected from the Research Questionnaire

Question Number Table 5 – Raw Data Questions 1-10 1 2 3 4 5 6 7 8 9 10

Mean Total Score

(Q 1-10)

Respondent 1 5 5 5 5 5 5 5 5 4 5 4.9

Respondent 2 4 4 3 3 4 4 4 4 3 4 3.7

Respondent 3 5 5 4 4 4 4 4 4 1 4 3.9

Respondent 4 4 4 3 4 3 4 4 4 3 4 3.7

Respondent 5 4 4 4 4 4 4 4 4 4 4 4.0

Respondent 6 3 4 3 4 5 4 5 5 4 3 4.0

Respondent 7 2 2 3 3 4 4 4 5 3 4 3.4

Respondent 8 4 4 4 4 4 4 4 4 4 4 4.0

Respondent 9 3 3 3 3 4 4 4 2 4 3 3.3

Clien

ts

Respondent 10 2 2 2 2 2 3 3 2 3 2 2.3

Respondent 11 2 2 4 4 4 4 4 4 2 4 3.4

Respondent 12 3 2 3 2 3 3 4 4 2 3 2.9

Respondent 13 4 4 3 3 3 4 3 2 3 3 3.2

Respondent 14 4 4 4 4 4 3 3 4 2 3 3.5

Respondent 15 4 4 4 3 4 4 4 4 2 4 3.7

Respondent 16 4 4 4 4 5 5 5 5 2 4 4.2

Respondent 17 4 4 3 3 3 4 3 4 2 3 3.3

Respondent 18 5 4 4 4 4 5 4 5 2 4 4.1

Respondent 19 2 4 2 2 4 4 4 4 4 2 3.2

Respondent 20 2 2 3 3 3 4 4 3 3 3 3.0

Respondent 21 4 4 3 3 3 4 3 2 3 3 3.2

Respondent 22 3 3 3 3 3 4 3 4 3 3 3.2

Respondent 23 4 4 4 3 4 4 4 4 2 4 3.7

Respondent 24 5 4 4 4 4 4 4 4 2 3 3.8

Respondent 25 5 4 4 4 4 5 4 4 1 4 3.9

Respondent 26 4 4 4 3 3 4 2 4 2 4 3.4

Co

nsu

ltan

ts

Respondent 27 4 4 5 5 5 4 5 5 3 3 4.3

Respondent 28 4 5 5 4 5 5 5 5 4 5 4.7

Respondent 29 3 4 4 4 3 5 4 4 3 4 3.8

Respondent 30 4 5 5 4 4 5 5 5 4 5 4.6

Respondent 31 3 3 2 4 5 5 4 4 1 4 3.5

Respondent 32 3 3 3 3 3 4 4 4 2 4 3.3

Respondent 33 3 4 4 4 3 5 4 4 3 4 3.8

Respondent 34 3 3 3 3 3 4 4 4 2 3 3.2

Respondent 35 5 5 4 4 4 4 4 4 2 5 4.1

Co

ntr

acto

rs

Respondent 36 3 3 4 4 4 5 5 5 2 4 3.9

Clients 3.6 3.7 3.4 3.6 3.9 4.0 4.1 3.9 3.3 3.7 3.7

Consultants 3.7 3.6 3.6 3.4 3.7 4.1 3.7 3.9 2.4 3.4 3.5

Contractors 3.4 3.9 3.8 3.8 3.8 4.7 4.3 4.3 2.6 4.2 3.9

Mean

Sco

res

Total Sample 3.6 3.7 3.6 3.5 3.8 4.2 4.0 4.0 2.7 3.7 3.7



Question Number Table 6 – Raw Data Questions 11-20 11 12 13 14 15 16 17 18 19 20

Mean Total Score

(Q11-20)

Respondent 1 3 3 3 3 3 3 3 4 3 3 3.1

Respondent 2 1 1 2 3 4 3 3 3 4 3 2.7

Respondent 3 2 2 3 3 3 3 3 3 3 4 2.9

Respondent 4 4 4 4 4 4 4 4 4 2 4 3.8

Respondent 5 2 2 3 4 4 4 4 4 3 4 3.4

Respondent 6 1 1 1 1 2 3 3 2 3 3 2.0

Respondent 7 1 1 2 3 3 2 4 2 4 3 2.5

Respondent 8 2 2 3 4 4 4 4 4 3 4 3.4

Respondent 9 3 3 3 3 3 3 3 3 3 3 3.0

Clien

ts

Respondent 10 2 2 2 2 2 3 3 2 3 2 2.3

Respondent 11 1 2 3 3 3 3 3 3 3 3 2.7

Respondent 12 2 1 2 1 2 2 3 3 3 2 2.1

Respondent 13 2 2 2 2 1 1 1 2 5 1 1.9

Respondent 14 2 2 3 3 4 4 4 4 3 4 3.3

Respondent 15 2 2 3 3 4 4 4 4 3 4 3.3

Respondent 16 2 2 2 2 3 3 3 3 4 3 2.7

Respondent 17 1 1 1 2 2 1 1 1 1 2 1.3

Respondent 18 1 1 2 2 3 3 2 2 4 2 2.2

Respondent 19 2 4 2 2 4 4 4 4 4 2 3.2

Respondent 20 2 2 3 3 3 4 4 3 3 3 3.0

Respondent 21 2 2 2 2 1 1 1 2 5 1 1.9

Respondent 22 3 3 3 3 3 4 3 4 2 3 3.1

Respondent 23 2 2 3 3 4 4 4 4 3 4 3.3

Respondent 24 1 1 2 2 2 2 2 2 3 2 1.9

Respondent 25 2 2 3 3 3 3 3 3 4 3 2.9

Respondent 26 3 3 2 3 3 3 2 3 2 3 2.7

Co

nsu

ltan

ts

Respondent 27 2 2 2 2 1 1 1 2 3 1 1.7

Respondent 28 2 2 3 3 3 2 1 1 5 4 2.6

Respondent 29 3 3 3 3 3 3 3 3 3 3 3.0

Respondent 30 3 3 3 3 3 3 2 2 4 4 3.0

Respondent 31 2 2 3 3 3 3 3 3 3 3 2.8

Respondent 32 2 2 2 2 2 2 2 2 3 3 2.2

Respondent 33 2 2 3 3 3 4 4 4 3 3 3.1

Respondent 34 3 3 3 3 3 4 4 4 2 3 3.2

Respondent 35 3 3 4 4 4 2 2 2 3 3 3.0

Co

ntr

acto

rs

Respondent 36 2 2 2 2 2 2 2 2 3 2 2.1

Clients 2.1 2.1 2.6 3.0 3.2 3.2 3.4 3.1 3.1 3.3 2.9

Consultants 1.9 2.0 2.4 2.4 2.7 2.8 2.6 2.9 3.2 2.5 2.5

Contractors 2.4 2.4 2.9 2.9 2.9 2.8 2.6 2.6 3.2 3.1 2.8

Mean

Sco

res

Total Sample 2.1 2.1 2.6 2.7 2.9 2.9 2.8 2.9 3.2 2.9 2.7



Table 7 – Raw Data: Qualitative Responses



Appendix 5 – Results of the Statistical Analysis

Table 8 – t-Test 1 Results

Perceived Overall Performance of Partnered Projects compared with Traditional Competitively Tendered

Projects

Variable 1 (Contractors)

Variable 2 (Clients)

Mean 3.877777778 3.72

Variance 0.274444444 0.439555556

Observations 9 10

Pooled Variance 0.361856209

Hypothesized Mean Difference 0

df 17

t Stat 0.570850354

P(T<=t) one-tail 0.287785087

t Critical one-tail 1.739606432

P(T<=t) two-tail 0.575570174

t Critical two-tail 2.109818524

Contractors agree no more than clients that overall project performance is


tendering.



Projects


Variable 2 (Consultants)

Mean 3.72 3.529411765

Variance 0.439555556 0.177205882

Observations 10 17



df 25

t Stat 0.917555625

P(T<=t) one-tail 0.183809618


P(T<=t) two-tail 0.367619236


Clients agree no more than consultants that overall project performance is


tendering.





Projects



Mean 3.877777778 3.529411765

Variance 0.274444444 0.177205882

Observations 9 17



df 24

t Stat 1.845779296

P(T<=t) one-tail 0.038648164


P(T<=t) two-tail 0.077296329


Contractors agree no more than consultants that overall project performance is


tendering.


Perceived Overall Performance of OJEU Framework Projects compared

with Partnered Projects



Mean 2.91 2.541176471

Variance 0.303222222 0.417573529

Observations 10 17



df 25

t Stat 1.50845486

P(T<=t) one-tail 0.07198655


P(T<=t) two-tail 0.1439731


Clients disagree no less than consultants that overall partnered project









Mean 2.91 2.777777778

Variance 0.303222222 0.156944444

Observations 10 9



df 17

t Stat 0.594406327

P(T<=t) one-tail 0.280034352


P(T<=t) two-tail 0.560068704


Clients disagree no less than contractors that overall partnered project







Mean 2.777777778 2.541176471

Variance 0.156944444 0.417573529

Observations 9 17



df 24

t Stat 0.998069866

P(T<=t) one-tail 0.164101355


P(T<=t) two-tail 0.32820271


Contractors disagree no less than consultants that overall partnered project





Total Sample

Variable 1 - Perceived Performance of

Partnered Projects compared with

Traditional Competitively Tendered

Projects

Variable 2 - Perceived Performance of OJEU Framework Projects


Mean 3.669444444 2.702777778

Variance 0.27818254 0.331134921

Observations 36 36



df 70

t Stat 7.430297144

P(T<=t) one-tail 1.01959E-10


P(T<=t) two-tail 2.03918E-10


Partnered projects compared with traditional competitively tendered projects

perform better than OJEU framework projects compared with partnered projects.

2007 terry

Documents

ordinal ranking

ec procurement

basic procurement

ec procurement

construction

carry equal

major uk industries

levene efficiency