Construction Projects

The focus in this section is on reviews and studies that examine the success of major civil government construction procurements. Some resources also look more broadly at issues such as costing and asset measurement.

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Building and Managing Facilities for Public Services (PDF)
Bennett, J and Iossa, E, 2005
Centre for Market and Public Organisation (CMPO)
The authors model alternative institutional arrangements for building and managing facilities for provision of public services, including the use of the Private Finance Initiative (PFI), by exploring the effects on innovative investment activity by providers. The desirability of bundling the building and management operations is analysed, and it is considered whether it is optimal to allocate ownership to the public or the private sector. They also examine how the case for PFI is affected by the (voluntary or automatic) transfer of ownership from the private to the public sector when the contract expires. Asset specificity and service-demand risk play critical roles.
ISSN 1473 625X
UK

First Kelly Market - Proposals (Web Page)
Office of Government Commerce (OGC), 2005

In 2003 Sir Christopher Kelly submitted his report, 'Increasing Competition and Improving Long-term Capacity Planning in the Government Market Place'. It identified construction as the first Kelly market (FKM) for further work in improving strategic management in the public sector. This link is to the OGC site page detailing proposals for the FKM.

UK

First Kelly Market - Overview (Web Page)
Office of Government Commerce (OGC), 2005

In 2003 Sir Christopher Kelly submitted his report, 'Increasing Competition and Improving Long-term Capacity Planning in the Government Market Place'. It identified construction as the first Kelly market (FKM) for further work in improving strategic management in the public sector. This link is to the OGC site page with an overview of the FKM.

UK

OGC Report to the Chancellor of the Exchequer on Increasing Competition and Long Term Capacity Planning in the Government Marketplace - Action Plan (PDF)
Office of Government Commerce (OGC), 2003

This is the Action Plan that accompanied the Kelly Report, 'Increasing Competition and Long Term Capacity Planning in the Government Marketplace'.

UK

OGC Report to the Chancellor of the Exchequer on Increasing Competition and Long Term Capacity Planning in the Government Marketplace (PDF)
Office of Government Commerce (OGC), 2003

This is the report that precipitated the launch of the Kelly Programme to improve the Government marketplace. It was launched as part of the Autumn 2003 pre-budget report along with an Action Plan, which is also available via the Resource Centre.

UK

Construction Projects General - Construction

List of Resources:

Government Communications Headquarters (GCHQ): New Accommodation Programme (PDF)
House of Commons Committee of Public Accounts, Twenty-third Report of Session 2003-04, HC 65, 2004
London: The Stationery Office Limited
Based on the Report by the Comptroller and Auditor General (available below), evidence from GCHQ and the Cabinet Office, this report considers whether the expenditure on the PFI deal to relocate GCHQ represented good value for money. The report concludes that GCHQ failed to realise the development of IT networking and so complicated its technical transition to effectively a systems upgrade, consequently it also had to stage the technical transition for budgetary reasons. The main recommendations are that negotiations should not be entered into unless key requirements have been settled and prices; that major change programmes need to be managed as such from the outset; and that departments should not uncritically accept that PFI is the only way to improve on past construction performance.

UK

PFI: The New Headquarters for the Home Office (PDF)
House of Commons Committee of Public Accounts, Eighteen Report of Session 2003-04, HC 501 Incorporating HC 1286-i, Session 2002-03, 2004
London: The Stationery Office Limited
Together with evidence from the Home Office and Annes Gate Properly Plc (AGP) the firm undertaking the PFI deal, and the Report by the Comptroller and Auditor General (available below), this report evaluates the success and value for money of the new building for the Home Office. The report finds that there was poor planning and that to ensure value for money, there needs to be a longer-term realisation of wider business benefits. In terms of the negotiation of the deal, the report concludes that it is doubtful that the potential returns from the refinancing deal are worth what was paid for it.

UK

Government Communications Headquarters (GCHQ): New Accommodation Programme (PDF)
Report by the Comptroller and Auditor General, National Audit Office, HC955 Session 2002-03, 2003
London: The Stationery Office
The report examines the effectiveness of GCHQ's conduct during the PFI procurement and whether this project will deliver value for money. It recommends that when considering major investment it is imperative the full scope is properly defined from the beginning; that full and properly estimated costings are revealed to managers; to keep the negotiating period between selection of bidder and signing of deals to a minimum; that effective benchmarking should place projects in their appropriate context; and there be proper management of hybrid change programmes.

UK

PFI: The New Headquarters for the Home Office (PDF)
Report by the Comptroller and Auditor General, National Audit Office, HC954 Session 2002-03, 2003
London: The Stationery Office
This report by the National Audit Office regarding the new housing of the Home Office finds that the Home Office achieved what it expected but has retained a number of risks that need managing. In particular, its IT infrastructure, projected staff numbers and lasting attainment of more comprehensive business benefits.

UK

Private Finance Initiative: Redevelopment of MOD Main Building (PDF)
House of Commons Committee of Public Accounts, Fourth Report of Session 2002-03, HC 298, 2003
London: The Stationery Office Limited
On the basis of a report by the Auditor General (available below) and evidence from the MOD and Modus consortium who undertook the PFI project, this report focuses on three key concerns: the extent of financial savings, the comparative costs compared to conventional procurement and the risks of a long-term PFI deal. The report concludes that there should have been closer attention to financing costs, and that these costs should be compared to other forms of procurement to evaluate the money for value in the deal. It also finds that departments need to understand their future needs to avoid the time and costs of additional contracts to the main deal.

UK

Ministry of Defence: Redevelopment of MOD Main Building (PDF)
Report by the Comptroller and Auditor General, National Audit Office, HC 748 Session 2001-02, 2002
London: The Stationery Office
The NAO's analysis of the redevelopment project for the MOD Main Building. The PFI contract was let in May 2000 for a 30-year period. The study concluded that the financial benefits of the deal would be similar to that of conventional procurement, but that other factors (in particular, risk transfer) tipped the balance in favour of PFI.

UK

Asset Measurement in the Costing of Government Services - Research Paper (PDF)
Steering Committee for the Review of Commonwealth/State Service Provision, Productivity Commission, 2001
Canberra: AusInfo
Examines the impact of asset measurement factors on unit costs in the service areas of public hospitals, police services, corrective services and housing.
ISBN 1 74037 050 3
Australia

Measured Partnering: The Only Way to Know Whether you are Succeeding
M41 Case Study Project No. 20, 2000
Constructing Excellence
Constructing Excellence aims to deliver improved industry performance resulting in a demonstrably better built environment. This case study provides guidelines on performance-measurement in partnerships in this sector.

UK

Serco Institute Resource Centre

Construction Projects