edward farquharson 8 march 2007
DESCRIPTION
Quality Control in Preparing and Managing PPP Projects. Edward Farquharson 8 March 2007. Time. Impact. 100%. Gate 5. Benefits Evaluation. Gate 4. Readiness For Service. Gate 3. Ability to Influence Whole Life Cycle Expenditure. Investment Decision. Gate 2. Procurement Strategy. - PowerPoint PPT PresentationTRANSCRIPT
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Edward Farquharson8 March 2007
Quality Control in Preparing and Managing
PPP Projects
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Impact
100%
Ab
ilit
y t
o I
nfl
uen
ce
Wh
ole
Lif
e C
ycle
E
xpen
dit
ure
Confirm StrategyConfirm
JustificationCompetitive Procurement
In-ServiceConfirm Benefits
Time
Strategic Assessment
Contract Award
0%
Gate 0
Gate 1
Gate 2
Gate 3
Gate 4
Gate 5
ProcurementStrategy
InvestmentDecision
ReadinessFor Service
BenefitsEvaluation
BusinessJustification
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Key Lessons From OGC Gateway reviews/ Essentials for Project Success include:
– Effective stakeholder communication
– Sound financial controls
– Market knowledge and procurement advice
– Contract Management and delivery skills
– Benefits realisation process
– Robust business case
– Adequate skills and resources
– Ongoing risk management process
– Clearly defined roles and responsibilities
– Pre-agreed Critical Success Factors
– Project Governance
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Tools
• Processes
• Incentives
• Institutions
Queen Elizabeth Bridge, Second Dartford Crossing
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Project process
Project identification
Project preparation
•Affordability
•Output specs
•VFM
•Risk allocation
•Managing advisors
•Timing and management
Project operation
•Contract Management
•Feedback mechanisms
Project procurement
•Project Boards
•Contract Standardization
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Gate 2 check-list
1. Programme, project, procurement level review (scope, term)
2. Risk Allocation3. Key Terms and Conditions4. Indication of commercial interest5. Affordability6. Suitability of Proposed Advisers7. Indicative Timetable8. Project Team9. Commitment of Sponsors/Users10. Statutory Processes
Value for Money
Assessment
Commercial Interest Assessment
Project Management Assessment
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Incentives
• Peer review – PRG
• Guidance
• Central funding conditionality
• Governance – Project Boards
• Central support – e.g. PUK’s role on Project Boards Wolds Remand Prison
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Project process
Project identification
Project preparation
•Affordability
•Output specs
•VFM
•Risk allocation
•Managing advisors
•Timing and management
Project operation
•Contract Management
•Feedback mechanisms
Project procurement
•Project Boards
•Contract Standardization
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Procurement
• ‘2 stages ahead’ approach
• Bid evaluation methodology and teams
• Single parameter bidding vav quality/price evaluation
• Governance
• Standard contracts and enforcement
British Embassy, Berlin
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Project process
Project identification
Project preparation
•Affordability
•Output specs
•VFM
•Risk allocation
•Managing advisors
•Timing and management
Project operation
•Contract Management
•Feedback mechanisms
Project procurement
•Project Boards
•Contract Standardization
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Background
• Over 750 signed projects
• Over 500 operational projects
• “Central” focus hitherto predominantly on procurement
– Project management support
– Contract terms
– Bid times and costs
• High profile “issues”:– Contractor distress
– Benchmarking
– Major changes
• Proposition that focus needs to change!
• PUK Review of operational performance for HMT
West Middlesex Hospital
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Service Provider Performance
Performance measurement shows that the contract service levels are being achieved...
12%
77%
1% 0%
10%
Always Almost always About half of
the time
Almost never Never
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Relationships
Please rate the day-to-day operational relationship between the public and private sector contract management teams
40%
32%
3%0.0%
25%
Very good Good Satisfactory Poor Very poor
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User Satisfaction
Did the last user satisfaction assessment find that services were being delivered to an acceptable standard?
14%
65%
1% 0%
20%
Always Almost always About half of
the time
Almost never Never
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Were operational problems resolved in the time allowed?
15%
3%
82%
Always or AlmostAlways
Half of the time
Almost never
Never = 0%
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Main Findings
• High standards of Performance
• High Levels of Contract Manager Satisfaction
• Good Relationships
• High Levels of User Satisfaction
• Problems Resolved in Time
• Payment Deductions Generally Effective
• Dispute Resolution Rarely UsedForest Enterprise – Ardgartan Site
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Operational Taskforce
• To assist the public sector in improving the operational performance of PFI contracts
• To support individual projects in dealing with operational issues
• Run by PUK
Nottingham Trams
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Helpdesk and Project Support Services
• Contract Management Strategy and Best Practice
• Benchmarking and Market Testing
• Contract variations
• Contractor difficulties
• Change in ownership
• Mediation
• Insurance costs for insurance reviews
• Refinancing
• Payment mechanismsGCHQ
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Programme Delivery Units
• Opportunity created by long term national programmes
• Achieve optimum value and impact from strategic programmes
• Balance needs based prioritisation with deliverability and capacity
• Procurement and contract standardisation
• Removal of repeated bidding (for public and private)
• Strategic partnering drive economies of scale from long term volume Centre Manor Park – Primary Care
Centre
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Example: Partnerships for Schools
• National delivery vehicle (DfES/PUK)
• Roll out of national programme across c3500 schools (‘Building Schools for the Future’)
• Delivery model with standard procurement and contractual documentation
• Team to provide local transaction support
• Manage allocations of funding
• Plan timetable of prioritisation, procurement, construction and delivery
• Good practice examples and innovation opportunities/ideas
• Benchmark costs to facilitate long term local partnering
Brentside School
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Recap
• Procurements have programme issues
• Quality control is a continuous process
• Critical importance of Gate prior to release to competition
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Conclusions
• Gateways
• Governance
• Standardisation
• Incentives
• Importance of operational phase
• Feedback mechanismsHM Treasury