Welcome to the Industry Webinar New Pro Cure

Welcome to the Industry Webinar New Pro. Cure 2020(P 2020) Design and Construction Framework for England 17 January 2020

Webinar - Presentation/Questions and Answers • Presentation slides used will be shared directly, following completion of the Webinar • The audience has the opportunity to post questions during the presentation using the chat function and a record kept of them • Responses to questions submitted using the chat function will be provided after the webinar • Responses to questions will be posted on P 2020 section of P 22 website (www. procure 22. nhs. uk) and will be anonymous • If you have further questions after the Webinar closes please send these to the following email address: p 2020@dhsc. gov. uk 2

Today’s Presenters & Agenda Name Position Session Cliff Jones DHSC, Head of Construction Procurement Objectives and Project Background Simon Corben Director of NHS Estates, NHS England - Improvement The Framework of Choice by the NHS in England Andrew Mitchell P 22 Implementation Advisor Proposed Lot Structure Graham Bell P 22 Implementation Advisor Key Features, Benefits and Outcomes David Low P 22 Implementation Advisor Commercial, Pricing and Contractual Approach Mike Hassell P 22 Policy Support & Business Manager Procurement Process and Procurement Time Cliff Jones DHSC, Head of Construction Procurement Framework Funding Model and Questions/Supplier Questionnaire 3

Webinar Objectives and Project Background Setting the scene Cliff Jones

Webinar Objectives • Provide an overview of the proposals of key areas of the new P 2020 Framework eg. : § § § benefits lot structure pricing structure scope commercial model • Provide an overview the procurement timetable for P 2020 Framework • Openly and transparently share the design of the new framework and stimulate comments/ feedback/questions on it • Obtain feedback on innovative solutions from suppliers for consideration • Obtain feedback on any potential risks/issues and viability of proposals • Information provided during the Webinar is currently in draft format and subject to change or amendment prior to the issue of the OJEU Contract Notice 5

Background to New P 2020 Framework • The existing Pro. Cure 22 (P 22) is a multi-supplier Capital Design & Construction Framework run by the Department of Health and Social Care for the NHS and is due to expire at the end of September 2020 • The replacement Pro. Cure 2020 (P 2020) framework is to be in place and operational by October 2020 • NHS England NHS Improvement will be working closely with the Framework Delivery Team in the DHSC to put the new framework in place • P 2020 will be available for all health and social care construction and refurbishment schemes • The length of the framework shall be 6 years from the outset • The current estimated framework value is £ 20 billion • Open procurement route will be utilised to put the framework in place (Selection Questionnaire and Award) • P 2020 will be based on Strategic and Project Collaboration to deliver Healthcare Solutions (Solutions Providers) 6

The Framework of Choice by the NHS in England Simon Corben

Lot Structure, Key Features, Benefits & Outcomes Andrew Mitchell and Graham Bell

P 2020 Framework – Lot Structure The framework will be divided into lots as shown in the following diagrams. By way of background, an options appraisal was undertaken in support of the lotting structure and examined the relative advantages and disadvantages of a range of delivery model options (including of course, the current way in which the service is delivered). The lotting rationale was driven by a number of factors, subsequently feeding into the evaluation criteria such as: Geographical difficulties associated with a national provision for smaller value projects Regional commercial variations such as cost indexation A procurement approach which does not create barriers to SME’s A robust mechanism for delivering larger value projects such as those identified within the Health Infrastructure Plan for transformational and new build projects 9

P 2020 Framework – Lot Structure • Desirability – the degree to which each option might meet the strategic objectives and priorities of stakeholders (NHS E/I, NHS/DHSC) by taking account of the balanced scorecard (PPN 09/16) and Social Value themes such as: • • • More Local people in employment Ethical Procurement and Social Value embedded within the supply chain Sustainable travel Environmental impact and Air pollution reduced Improved resource efficiency around § Local labour § Reduced travel 10

Lot 1 – Regional Lots aligned to NHS E/I £ 0 m - £ 24. 99 m • North of England (North West, North East & Yorkshire) • Midlands & East of England • South of England (South East & South West) • London 11

Lot 2 – National Lot £ 25 m - £ 99. 99 m 12

Lot 3 – National Lot £ 100 m + 13

P 2020 Framework - Key Features • Not merely a “Design and Build” Contractor • A “Healthcare Solutions provider” that identifies and delivers Healthcare Solutions who manages an integrated supply chain that can collaborate with the DHSC and NHS (and Social Care) Clients that delivers: § Master/Strategic Planning § Business Cases § Design § Construction (New Build or Refurbishment) § Minor Works Programmes § FM or other specialist advice to support Master/Strategic Planning, Design and Construction decisions § Capital and operational cost efficiency savings for the NHS (and Social Care Clients) whilst providing the above • PSCPs and their Supply Chains understanding of current and developing DHSC Policy (and Guidance) and healthcare delivery is essential to support the above 14

P 2020 – Key Benefits P 2020 will build on the success of P 22 and will provide the following key benefits: • Our aim with NHS E/I is for P 2020 to be the framework of choice for the NHS, Social Care Sector and Contractors alike • Significant changes proposed from P 22 including the addition of Regional Lots • Rapid access to high quality Principal Supply Chain Partners (PSCP’s) and their supply chains with proven track records of delivery across the works and service categories in the Health Sector • End to end support and a quality assured process. Monthly project reporting and monitoring • A single consistent method for the delivery of a rolling programme of funded individual capital projects and schemes • Mini-Competition and Direct Award • Updated and clear call-off procedures, templates and guidance 15

P 2020 Framework – Key Benefits • Standard components and repeatable rooms • Flexibility in the use of target cost and lump sum contracts using NEC 4 • Client/PSCP gain share mechanism • Free Training in the use of the Framework and call off process • Open book accounting • Challenging KPI’s including social value targets and targeted spend with SME’s • Latest Fair and Prompt Payment Provisions • Minimum standards for environment and sustainability • Building Information Modelling and CDM compliance 16

P 2020 Framework - Key Outcomes Provide quality that exceeds national standards Prevent waste Provide excellent customer service and offer VFM Achieve Savings 17

Commercial, Pricing and Contractual Approach David Low

P 2020 Framework – Framework Agreement and Call – Off Contracts • Bespoke P 2020 Framework Agreement and Schedules in plain English • Clients can choose from the NEC 4 contract identified on the next slide. Clients will identify their choice of NEC 4 contract at the commencement of any call-offs under the framework • The NEC 4 has been selected as this complies with the Infrastructure and Projects Authority “Common Minimum Standards for Construction” (CMS) – March 2017 • The NEC 4 contract is used through design, construction and post completion. The contract develops through the project stages to provide a comprehensive single agreement • NEC 4 Z clauses will be used to provide specific requirements of clients. The number of Z Clauses will be kept to the minimum with due regard to IPA/CCS standard set of boilerplate amendments • Bidders processes, systems and procedures relevant to the NEC 4 contract will be evaluated within the Invitation to Tender and used in subsequent call-off contracts where relevant 19

NEC 4 Engineering and Construction Contract (ECC) – Call-Off Contract Options NEC Contract NEC 4 ECC Option A: priced contract with activity schedule NEC 4 ECC Option C: target contract with activity schedule NEC 4 Engineering and Construction Short Contract Consideration is currently being given to the following options depending on NHS E/I and NHS client demand: NEC 4 ECC Option B: priced contract with bill of quantities NEC 4 ECC Option D: target contract with bill of quantities NEC 4 ECC Option E: cost reimbursement contract 20

P 2020 Framework – Pricing Mechanism Priced Element Framework Award 1. NEC 4 fee percentages PSCPs can offer a reduction to the Based on contract options and lot, fee % submitted at framework regional pricing within national lots award 2. Hourly design rates for PSCPs and PSCMs Bidders will be able to price for regional variation within national lots 3. Preconstruction Services (PSCP/PSCM constructor) 4. Design Services (PSCM Designers) 5. Site Management Call - Off PSCPs can offer a reduction to the hourly rates submitted at framework award % of forecast project value and/or priced activity schedule based on RIBA Plan of Works stages and defined Scope of Service Priced activity schedule based on programme Priced Activity Schedule based on PSCP programme 21

P 2020 Framework – Typical Questions & Answers P 2020 Commercial & Contract Questions We welcome feedback on any part of the commercial and contractual proposals but have included specific questions in the supplier questionnaire relating to: • How to allow for regional pricing within lots • Any items which should be excluded from the pricing of the NEC fee % • Suggestions on simplifying the agreement of monetary values for contractors liabilities on call-off contracts • Alternative suggestions on the contract choice through the relevant project stages 22

Procurement process and timetable under Open Procedure Mike Hassell

P 2020 Framework – Procurement Process and Outline Timetable • The Open Procedure procurement route will be utilised to put the framework in place (Selection Questionnaire (SQ) and Award) based on pre-determined criteria • Between 6 -10 Suppliers for each Region and National Lot • SQ based PAS 91 Question Set • Relevant experience will be required as part of the SQ process for each Lot • Minimum turnover requirements as set in PCR 2015 • No restrictions on the number of Lots that bidders may bid for or be appointed to • Quality/Price ratio of 60/40 or 70/30 for award of the framework • Post tender interviews will not be held 24

P 2020 Framework – Procurement Process and Outline Timetable • We will be expecting bidders to demonstrate amongst other things: § § § § Commitment to social value and support for national and local community benefits initiatives Real continuous improvement contributions Strategic relationships Active contribution to framework charter Pro-active benchmarking contributions Commitment to apply open book principles throughout the whole supply chain Commitment to resolve contractual disputes by negotiation rather than resorting to more formal proceedings § Share information and best practice • Bidders processes, systems and procedures relevant to the NEC 4 contract 25

P 2020 Framework - High Level Procurement Process Stage 1 (Market Engagement) • Market Engagement (conversation with suppliers on proposed Procurement Strategy for the new Framework) Stage 2 (Procurement Strategy) Stage 3 (Procurement Process) • Sourcing Strategy • Tender documentation preparation • Launch of invitation to tender (ITT) • Evaluation of tenders Stage 4 (Framework Award) Stage 5 (Framework Management) • Advise suppliers of outcome • Framework preparation • Sign Framework • Framework Mobilisation • Manage Framework to deliver outcomes • Individual call –off contracts under the Framework by approved Contracting Authorities 26

P 2020 Framework - Indicative Procurement Timetable • Set out in the slide below are the key events in the procurement timetable. This is intended as a guide and whilst the Department does not intend to depart from the timetable it reserves the right to do so at any stage Activity Indicative Target Date OJEU Contract Notice and Procurement Documents published 13 th March 2020 3 Tender Response Deadline 24 th April 2020 3 Successful/Unsuccessful Suppliers informed 24 th July 2020 4 Mobilisation Period August/September 2020 4 Framework Commencement 1 st October 2020 5 Stage 27

Framework Funding Model Cliff Jones

P 2020 Framework - DHSC Funding Model • DHSC operating and framework development costs for the P 2020 Framework shall be funded by charging Suppliers admitted to the Framework a Management Levy which is allowed under PCR 2015 • The indicative charging mechanism currently under consideration is outlined below for illustrative purposes only: § £ 10 K - £ 15 K subscription paid annually § 0. 20% to 0. 50% Project Levy included in tendered OHP paid at pre-determined stages during the project contract period • A decision on the actual charging mechanism will be taken before the issue of the ITT • Framework initiatives will be funded from the revenue generated from the Management Levy in addition to other defined operating costs • VAT recovery advisory service will continue to be provided but will not be funded from the Management Levy 29

P 2020 Framework - Questions and Industry Survey • Please complete and return the Industry Survey by 24 th January 2010 • Please note, any questions raised in the survey will not be answered directly. If you with to submit questions please use the chat function during this webinar or the P 2020 email address. • Your feedback, thoughts and ideas on the proposed structure and features of the new framework are important to us • Your thoughts and ideas will be developed into workable solutions by the project team • If you wish to submit further questions after the Webinar please submit these directly to p 2020@dhsc. gov. uk by 24 th January 2020 • All Questions will be reviewed and responses will be provided by 31 st January 2020 • Thank you for your time today 30