Constructing the Gold Standard for public sector frameworks – has anything changed?

Constructing the Gold Standard was published in late 2021, and its recommendations for improved construction procurement, contracting and management were endorsed in the 2022 Construction Playbook. These describe collaborative strategic commitments by which the construction industry and its clients can improve value, manage risks and avoid disputes. For example, the Gold Standard helps establish and accelerate the adoption of affordable approaches to achieving net zero carbon.

The 120 contributors to Constructing the Gold Standard agreed that frameworks offer the best route to deliver transformational improvements in project outcomes, escaping the Groundhog Day of lost learning between projects. However, they also highlighted the waste and cynicism caused by exaggerated pipelines of work, by a quick-fix client mentality and by a lack of consistent, fair, value-based models for evaluation and contracting. So, of the 2,000 public sector frameworks in operation, how many are making the serious changes needed to transform construction performance?

To kick-start wider adoption of Gold Standard practices, Constructing Excellence launched a government-backed verification scheme in late 2023. Early adopters going through the verification process include the Crown Commercial Service, the Ministry of Justice (MoJ), the Environment Agency, Scape, Communities and Housing Investment Consortium, LHC Procurement Group and Places for People.

The big question is how the verification of Gold Standard adopters can be used to ensure that other framework providers and clients adopt the same processes and improve the performance of frameworks and alliances across the industry

The scheme verifies the claims made by framework providers and by clients that procure their own frameworks. It establishes partial verification and full verification, based on written submissions, analysis by independent verifiers and final reviews by a cross-industry Gold Standard task group. The first four independent verifiers are Katie Saunders of Trowers & Hamlins, Jason Russell of AtkinsRéalis, Shane Hughes of Savills and Professor Peter McDermott of the University of Salford.

So, what are the challenges? A key challenge is ensuring that a viable pipeline of work is put through a framework. Government clients can secure their own pipelines, whereas framework providers need to estimate a pipeline drawn from the expected needs of multiple clients.

To support credible frameworks that attract industry commitments, the clients participating in a framework can estimate rather than guarantee their future spend, and framework providers should manage and aggregate the demands of multiple clients. The industry does not depend on unconditional promises of expenditure, and it can invest in frameworks based on accurate projections of aggregated client needs.

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Framework managers can generate value by connecting the projects of multiple clients into a workflow that underpins design and cost consistencies, shared learning and investment in offsite manufacturing. The average cost of a framework bid is £247,000, and this should be spent on innovative proposals that deliver value rather than on gaming the system through lowest-price tendering.

A longer view is still a trickier proposition when public sector funding is released on a short-term annual cycle. Changes at government level to adapt funding allocation would enable public sector clients to work on a long-term basis to develop more effective pipelines.

Another challenge is helping framework providers, clients and industry to find and use the tools that are available to implement the 24 Gold Standard recommendations. For example, recommendations that depend on tier two or three supply chain engagement require framework providers and clients to look beyond their relationships with tier one contractors. Evidence will be needed of the processes in place to stimulate supply chain collaboration, showing how the framework brings supply chain members together and how alliancing contracts are used to drive best practice.

Feedback from tier two and three supply chain members will help to establish what benefits are flowing down under the Gold Standard, and their views will help to inform adoption of the Gold Standard recommendations that look at early supply chain engagement, SMEs, social value, modern methods of construction and relationship management.

The big question is how the verification of Gold Standard adopters can be used to ensure that other framework providers and clients adopt the same processes and improve the performance of frameworks and alliances across the industry. Constructing Excellence is committed to sharing the evidence of what Gold Standard practices can achieve and to offer training on how to adopt them. Emerging Gold Standard case studies include the MoJ New Prisons Alliance, a Crown Commercial Service model that is also being adopted by the Defence Infrastructure Organisation and the Department for Education.

Frameworks and framework contracts should be as practical, agile, commercially viable and easily usable as the Gold Standard recommendations require. New applicants for verification are already being assessed, and hopefully verified frameworks and framework alliances will become more sought after than those that do not comply.

This could create a sector breakthrough, overcoming the ways in which many attempts to reform construction procurement, contracting and management have become lost. It could avoid the Bermuda Triangle of idealistic debate, cynical criticism and unrealised good intentions by creating credible and integrated strategic norms that are supported by the construction industry and by its clients.

David Mosey is a professor at the Centre of Construction Law at King’s College London