Construction’s New Playbook

Blog Author: Richard Saxon CBE – JCT Chair

You may not know that I have been a long-time fan of American Football. The game is sometimes called ‘violent chess’ as it’s based on pre-planned ‘plays’ by one side’s offence team and the other’s defence team. The plays are radioed into the quarterback, the leader of the offence, by a coach on the side-line and the whole team must remember the moves implied by the coded name of the play, then execute it flawlessly. All the team’s plays are set down in their playbook, a secret document that team members must learn by heart and practice continuously. New plays are devised all the time too. No wonder the game originated in colleges.

Now we have a Government Construction Playbook. It’s not a secret playbook, but one to be understood by the whole industry. It builds on the long-term goals of the government, to build better, faster, greener and for less cost. But it adds policies that are deemed to enable those goals to be scored. These policies, or plays, are partly familiar but partly radical and a major change from the implicit playbook of today.

Intriguingly, BEIS agreed the playbook during the Covid 19 restrictions by working with bodies from across the industry in weekly online videoconferences. It would have taken far longer to emerge from conventional meetings, would have cost more and would have emitted more carbon dioxide. The process thus encapsulates the playbook’s ideas.

The core play in the book is based on the realisation that essential innovation won’t happen if government goes on buying projects one at a time on a price-led basis. The long-established assumption that single-project competitive tenders deliver best value is out. Twenty-two years after the Egan Report, which called for an end to this kind of tendering, the playbook agrees. Long-term alliances are to be set up for multiple projects, to encourage research, development and innovation, offsite manufacturing and digital methods. Outcome-based briefs will be set, enabling teams to respond without pre-defined designs and to learn and improve continuously. Teams will be encouraged to stay together, with Tier 2 and 3 players involved early. Whole-life value will be sought, with benchmarks for what particular types of facilities should cost.

Fourteen key groups of policies are in the playbook:

  1. Published pipelines of projects to give confidence to the market.
  2. Long-term partnerships for high volume, repeated asset types.
  3. Market health checks to take advantage of innovations and act on limitations.
  4. Early supplier involvement, abandoning single-stage procurement.
  5. Rationalised demand for standardised, offsite approaches to construction.
  6. Outcome based approach, based on a ‘five-capitals’ scorecard for sustainable value solutions and with transparent reporting.
  7. Doubling down on digital: embedding the ISO 19650 process and the emergent Digital Twin concept.
  8. Assessment of alternative delivery models for public works.
  9. Benchmarking to provide a ‘should cost’ guide for whole-life, zero-carbon.
  10. Better risk allocation through market engagement and incentives.
  11. Pricing and payment mechanisms to incentivise agreed outcomes.
  12. More effective contracts to support data exchange, collaboration, value and risk management, with continuous improvement.
  13. Better assessment of supplier financial standing, to set minimum standards.
  14. Resolution planning to ensure ability to protect projects from supplier failure.

We should all be working on forms that meet emerging public requirements, for multi-project alliances, digital working and reward from value delivered.

The sea change implied in the playbook is to listen to Egan at last. He pushed for a manufacturing-style of industry, with a few dominant suppliers with long-term supply chains, able to invest in innovation and aiming at perceived customer value. That logic is now irresistible as the government adopts the manufacturing model. The EU approach of giving every qualified supplier a crack at every job is rejected as perpetuating poor performance. It will not be popular and push-back can be expected, but it is the essential modernising that the industry needs.

I got into the subject of reforming the industry back in 1994 with the Latham Review. It will have been about 27 years by the time I step down as chair of the JCT in February 2021. It has been a bumpy road, with progress reversed several times as recessions drove back reform. Let’s hope I’m retiring as the pendulum swings towards long-term change and a brighter future.

Richard Saxon CBE was chair of JCT from 2015 to 2021.