CHIC is planning to procure a new Gold Standard development framework, to offer solutions for newbuild development and regeneration schemes of all types and sizes across the UK. It will be a route to market for members. We also intend to establish a ‘framework core group’ that shares learning, understanding and ideas and promotes standardisation - the adoption of offsite manufacturing for new homes.
We already have a comprehensive Development Dynamic Purchasing System in place, together with some long-term contracts with MMC manufacturers and turnkey contractors. CHIC’s previous development framework expired last year, so we now plan to replace it with this updated offer.
We want a framework structure that will work for our members, for contractors, for consultants and for MMC manufacturers. We want these stakeholders to help us plan how a new CHIC framework should be structured.
So in July, we brought together key stakeholders to discuss seven questions to help shape CHIC’s new framework, gauging what our members and supply chain partners need to ensure the sector is taking the necessary step change to becoming more sustainable and embracing MMC to deliver new homes.
The questions considered are set out below. A summary of the feedback is also available on CHIC’s website.
John Fisher, CHIC’s Chief Executive who also chaired the event said “we are really grateful to member and supply chain partners who attended this pre-market engagement event. We had almost 60 people engaging in informed discussion, which will help CHIC to plan an effective new framework”
Questions Considered
How should the framework be structured in terms of lots? Consider contractors, MMC manufacturers, turnkey solutions and consultants, across small, medium and large newbuild and regeneration projects. Think about geographical coverage / restrictions and project size bands. What about net zero commitments and passivhaus? What about employment and skills targets?
Stakeholders considered that the framework “Should be flexible to suit different regional and geographical locations, then structured by value bands for small/medium and large contracts.”
How big should the framework be? Think about numbers of contractors, MMC manufacturers, turnkey contractors and consultants; what is the fair balance between offering a market solution for many and establishing a framework with limited work for the appointed supply chain? How long should the framework last for (standard 4 years or longer?)
The consensus was to achieve a balance between offering choice to suit different size projects and geography to contain the number of framework participants so all have a real opportunity for work. Ideally, the framework should be for longer than four years, to enable opportunities for shared learning and experience, given the length of time each development project takes.
Members should commit a meaningful scale of programme to support the framework and to attract committed contractors, manufacturers and consultants.
Ideally the framework should adopt standard house types, with standard room and window sizes – all of which could utilise either modular or panelised construction and could be ‘stretched’ to accommodate larger house requirements.
How should CHIC run the procurement process? What is the right cost:quality balance? How many previous example projects is it fair to ask for? How do we ask about financial standing to still be fair to new entrants? What cost information do we ask for at framework tender stage and should this be based upon standard house types/scheme sizes/preliminary rates and overhead and profit percentages? How should the framework deal with inflation?
The views on cost:quality were firmly in favour of quality, probably 30% cost : 70% quality. Through standardisation and volume, the aim should be to share a lot of pricing information and replace decision making on price (as is so often the sectors approach for development) with value.
The framework should get stakeholders to collaborate and encourage volume and standardisation to drive better volume. Framework pricing inflation should be geared to a construction cost index (BCIS) instead of RPI or CPI.
What forms of contract should be provided for? Are you happy with using the FAC-1 and Gold Standard objectives? Should we be prescriptive or flexible for call off contracts? How do we try and address contractor vs MMC manufacturer liabilities/warranties? How do we include in the framework tender standard documents that individual members/clients/consultants/lawyers won't want to amend?
Discussion identified current limited knowledge of FAC-1, but showed support for a collaborative framework.
Some flexibility should be permitted on the forms of call off contracts available, given the likely diversity of projects the framework may support.
How does CHIC achieve framework market excellence to become a Gold Standard exemplar? What have we got wrong in the past and should change? What do others do differently or better? What / where is our main competition and how can we compliment rather than compete?
It was agreed there is a big ‘ask’ of the housing sector to collaborate in order to adopt the recommendations in Construction the Gold Standard. Together, CHIC’s members have an opportunity to embrace MMC at scale to drive efficiencies, but to do so they need to accept some standardisation (in designs and specification), rather than each project or client being very individual; good designs and ‘sense of place’ can be delivered with standard house types.
CHIC also needs to shift the approach from the cost of construction to whole development / while life costs.
How does CHIC promote and secure maximum social value through a new framework? Given that development projects are relatively short term in relation to the term of apprenticeships, what can we do to secure suitable training and career development in construction? Can standardisation and collaborative value contribute to more social value?
The consensus was that the framework should promote Social Value on a project by project basis, but that CHIC should coordinate collaborative working, so apprentices could be offered opportunities across multiple sites.
CHIC needs to work with the sector to promote the effectiveness of careers in construction and housing. The definition or understanding of ‘local employment’ needs to be restructured to recognise that when homes are built in a factory, that may be a different locality – all consistent with Levelling Up.
Once CHIC's Gold Standard Newbuild Framework is established, how should we manage it to encourage knowledge sharing and promote best practice? Consider structure, frequency, scope of engagement, administrative burden vs strategic benefits and marketing opportunities. How will we be able to demonstrate its net zero / environmental deliverables and how can we engage framework stakeholders in generating jobs and construction skills training?
CHIC should aim to include provision for a framework ‘core group’ to get all stakeholders together on a regular basis – perhaps quarterly – to share experience and learning. This will help to promote collaboration, standardisation and reflects recommendations in Constructing the Gold Standard.
