How do you measure up?

It is not just a question of changing mindsets when ditching “lowest tender wins” in favour of best value, as required under ProCure21. There is also the problem of how you measure value and improvements when all the historical data is based on traditional contracting.

Nigel Dorman, head of construction performance at NHS Estates, says: “Information spanning back over 20 years is available on time and cost at the start and at completion of the projects. However, there is no real data relating to the environment in which the performance occurred. There is also very little on the culture existing when the project was undertaken. Additionally, post-project evaluations often weren’t as comprehensive as originally indicated.”

This has created the need for a completely new set of benchmarks against which to judge whether the project provides best value and strikes the right balance between time, cost and quality. To start the ball rolling, Dorman says ProCure21 is using most of the construction industry’s key performance indicators (KPIs), published by Constructing Excellence and used by both private and public sectors, as well as those from the “central government clients’ core Charter toolkit”. The toolkit was developed between NHS Estates, the Office of Government Commerce and other government departments.

Additional information, such as the financial data produced by the Building Cost Information Service, is being fed in so that cross-sector comparisons can be made. NHS Estates is also expanding its perspective internationally by looking at projects in Europe, North America and Australia to put together methodology that can be used to make valid cross-country comparisons.

Although it is still early days, Dorman remarks: “Our costs are falling within the expected range. It has brought some sunshine into a very dull picture.”

The 12 KPI toolkits are:

• Quality of design – assessed by the AEDET package (see page 28);
• Environmental issues – assessed by the NEAT package (see page 29);
• Whole-life costs – on the basis of net present value produced by a cost model;
• Service satisfaction – the client's assessment of the facilities provided;
• In-project toolkit (cultural) – measuring “soft” aspects of the project team’s working environment;
• In-project toolkit (numerical) – measuring performance in respect to time and cost certainty;
• Best client – the contractor’s assessment of the client’s performance;
• Monitoring the Departmental Cost Allowance Guide (DCAG) – this measures improvements against DCAG guidelines on cost and space allowances for hospital departments;
• Risk management – assessing the thoroughness and success of the risk management measures adopted;
• Defects management – measuring the extent of defects when the project is handed over to the client;
• Health and safety management;
• Payment – monitoring how quickly members of the supply chain are paid.

It is essential that the KPIs reflect the rapidly changing sectors of both construction and healthcare. Dorman cites the growing emphasis on off-site fabrication and changes in clinical practice as examples that should be captured. “We aim to quicken the speed at which guidance is available so that it reflects the latest current clinical practices being pursued.”

As continuous improvement is the name of the ProCure21 game, seven working groups have been set up to log progress. All 12 principal supply chain partners are represented on the groups, which meet every month or so to discuss what steps can be taken.

The performance review group is responsible for KPIs, identifying best practice and how this can be expanded throughout the entire ProCure21 network. The other six working groups deal with: design champions; design; design and engineering; IT; training; and process improvement. Dorman adds: “Sharing this knowledge would have been impossible under previous contractual arrangements.”

Martin Brackstone, Kier Northern director says: “I’ve seen no reluctance to share information in the ProCure21 frameworks. Any advantage lasts no more than 24 hours – if you come up with an idea, it doesn’t take long before the whole world knows about it.”