The document discusses success in UK public procurement. It notes that procurement plays a role in reducing the deficit and promoting public sector reform and economic growth. The Efficiency and Reform Group was created to support £80 billion in expenditure reductions through improved coordination. Early successes include saving over £5.5 billion in 2011/12 and reforming procurement processes to increase SME participation. The EU public procurement regime also aims to simplify processes while enhancing SME access.

1. Success in UK
Public Procurement
Wednesday 27 March 2013

2. Success in UK public procurement
Sally Collier
Deputy Chief Procurement Officer
27 March 2013

3. Procurement’s role in Government’s response to
the UK’s economic challenges
Efficiency Savings
Preventing waste and focusing
resources on genuinely beneficial
Reduce the activities.
1
Deficit Public Sector Reform
A longer term view of transforming
public services while reducing future
expenditure.
Promote Growth
2 Using pan-Government resources to implement existing UK economic
policy while looking for new ways to support business and stimulate
opportunities for growth.
3

4. Efficiency and Reform Group (ERG)
Historically:
 Government lacked a strong corporate centre
 Government Departments worked in silos
ERG was created in June 2010 to:
 Support the £80 billion reduction in Government expenditure
 Join the work of Cabinet Office and Her Majesty’s Treasury
 Introduce central controls
 Improve co-ordination to exploit economies of scale
4

5. Government efficiency savings in 2011/12
By tackling wasteful spending across Whitehall, the Government saved
over £5.5 billion for the taxpayer in 2011/12 on top of the £3.75 billion
saved the previous year.
Francis Maude, Minister for the Cabinet Office:
“This is not the sexy end of politics – it's about the minutiae of
procurement and financial management. No one who has been a
supplier to government can honestly deny that
there was waste and inefficiency in the way goods and services were
procured and managed in the past”
5

6. A more focussed commercial team at the heart of Government
Chief Procurement Officer & DG Efficiency
Government
Commercial Procurement ICT
Procurement
Relationships Policy infrastructure
Service
Managing strategic suppliers Modernising Government
The largest buying
as a single customer for the procurement to reduce the
organisation in the UK with
first time. cost and speed of doing
£8.4bn spent in 11/12. Implement smarter ICT
business with Government platforms including:
Supported by tough spending
Enabling Government and
controls, requiring Cabinet Strengthening civil service PSN, Cloud, EUD strategy
wider public sector bodies to
Office approval for all spend capability and supporting and improve hosting.
secure better deals by
over £5 million with strategic wider agendas including
aggregating buying power.
suppliers. SMEs.
6

7. Early success at reforming procurement
Pre-qualification Contracts Finder launched,
6,000 pages of procurement
questionnaires cut entirely with 12,900 contracts
guidance replaced with 50
for smaller contracts published so far
700 civil servants trained in
17 Pipelines published with
Direct spend with SMEs up LEAN procurement
£84bn of likely future
from 6.5% to 10% processes: use of open
requirements
procedures doubled in 2012
7

8. Easier to find
Reformed the
Introduced the opportunities to SMEs given Big is not
procurement
SME Crown do business new channels Focus in always
process
Representative with of departments beautiful –
‘removing
for SMEs – Government – communication and reporting starting in ICT
barriers’ –
they have a Contracts including spend with contract length
abolished PQQ
voice at the top Finder, Mystery SMEs and size will
below
table Dynamic Shopper be reduced
threshold
Marketplace
SMEs
8

9. EU public procurement rules
The UK Government wants significant simplification of the EU public
procurement regime to free up markets and support growth:
– Reduce lengthy and burdensome procurement processes that add cost to
business and barriers to market competition
– Modernise the procurement procedures and provide more flexibility for
purchasers to follow best commercial practice to achieve the best procurement
outcomes
– Support measures to enhance SME access to public procurement, where such
measure are non-discriminatory and are consistent with a value for money
approach
– Allow a flexible approach towards employee-led organisations/mutuals so they
can gain experience of running public services prior to full and open competition
Negotiations in Council and European Parliament continue.
Mid-late 2013: EU expected to adopt new rules / national transposition
9

10. For more information
Cabinet Office Efficiency and Reform Group
www.gov.uk/government/organisations/efficiency-and-reform-group
Government Procurement Service
gps.cabinetoffice.gov.uk/
Contracts Finder
www.contractsfinder.businesslink.gov.uk/
Cabinet Office Twitter
@cabinetofficeuk
10

11. Network Rail Connecting Britain:
Delivering a 21st Century Railway
Simon Kirby
Managing Director, Infrastructure Projects

12. Passenger Growth = Project Investment
30
25
20 Enhancements
(£bn)
15
Enhancements
10 & renewals
(£bn)
5
0
CP3 CP4 CP5

13. A fundamentally different company
• Devolved route business units
aligned with our customers
• National Centre
• A separate projects business
working in collaboration with our
supply chain

14. Hooley Cutting - Stabilisation
Principal Contractor: BAM Nuttall Route: Sussex

15. Infrastructure Projects ambition
Our ambition is to be the
best rail infrastructure
project delivery
organisation in the UK
We will be a rail infrastructure solutiondeveloper, integrator
solution developer, integrator
and deliverer; whilst also offering additional support services
and deliverer; whilst also offering additional support services
to our clients such as engineering design and asset protection.

17. Kings Cross

18. Southern Facade

19. Thameslink
Bedford East Coast Main Line
Key
Luton
12 Car Operation 2011
St Albans 12 Car Operation 2018
St Pancras International
Blackfriars London Bridge
Kent
Elephant & Castle
East Croydon Rochester
Orpington
Sevenoaks
Maidstone
East
Gatwick Airport Grinstead
Horsham
Brighton

20. 20

21. Date 00.00.00 Presentation title to go here 21

23. Borders Rail
Shawfair
A720 City Bypass
A7 Hardengreen Eskbank
Newtongrange
Falahill Summit
A7 Gorebridge Gorebridg
e
Heriot
Stow
Fountainhall
Bowshank Tunnel
Galashiels
Torwoodlee Tunnel
Tweedbank

24. New GSM-R Network has gone live
FTN Construction GSM-R Construction
98.4% Complete 90.4% Complete
14,591 Km 2934 sites

25. Hitchin
25

26. Waverley
26

27. ROC

28. RSAR, Aerial View, Oct ‘12
28

29. Reading Station

30. Innovation

31. Innovation

32. Innovation

33. Innovation
Westbury Lane

34. A separate projects business
working in collaboration with our
supply chain

35. Select partners early
Select the best
Align incentives
Long term relationships
Date 00.00.00 Presentation title to go here 35

36. Looking ahead to CP5
36

37. Passenger traffic and demand
Passenger Traffic & Demand Passenger Train KM Index
Passenger KM Index
1.70
1.60
1.50
1.40
(2004-5 = 1.000)
1.30
Index
1.20
1.10
1.00
0.90
CP3 CP4 CP5
0.80
2004/5 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Financial Year

38. Network Rail efficiency
100
90
27%
80
70
23%
60
% 16%
50
40
30
Actual
20
IIP
10
0
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
CP3 CP4 CP5

39. Network Rail Connecting Britain:
Delivering a 21st Century Railway
Simon Kirby
Managing Director, Infrastructure Projects

40. Presentation Title
Success in UK Public Procurement

41. Malcolm Stephen
Director, Business Development
BAM Nuttall Ltd

42. Royal BAM – Operating
Companies
Construction & M&E Civil Engineering Property Public-private Partnerships
Services
BAM Utiliteitsbouw BAM Civiel AM BAM PPP
Netherlands
AM Real Estate
BAM Woningbouw BAM Infratechniek
Development
Heilijgers BAM Rail
BAM Techniek BAM Wegen
BAM Wallonie BAM Wallonie
Belgium
Betonac
CEI-De-Meyer CEI-De-Meyer Immo BAM
Interbuild Kaïros
United Kingdom BAM Construction * BAM Nuttall BAM Properties *
Ireland BAM Building ** BAM Civil ** BAM Property **
Germany BAM Duetschland W&F Ingenieurbau
Worldwide BAM International BAM International
Sector
* BAM Construction and BAM Properties together form BAM Construct UK
Operating Company ** BAM Building, BAM Property and BAM Civil together form BAM Contractors
Active in this sector BAM Utiliteitsbouw, BAM Woningbouw and Helijigers also operate as developers on construction projects in the property sector

43. BAM in Europe

44. BAM Worldwide

45. Royal BAM – Performance
Turnover by region
Ireland
3% Belgium Germany
11% 10% Worldwide
7%
Netherlands
United 36%
Kingdom
33%
PPP
Property 6%
7%
Construction
& M&E
Services
Civil 41%
Engineering
46%
Turnover by sector

46. Royal BAM Results
 Turnover - €7,000m
 Profit - €100m
 Order Book - €10,900m
 Share Price - €3.34
 Employees - 26,000

47. BAM in the UK

48. Our Market
Sector 2012 2013 2014 2015
Public Housing 3554 3128 3065 3126
-20 -12 -2 +2
Private Housing 13301 13700 14659 15392
-5 +2 +7 +5
Infrastructure 11351 12085 13428 14502
-13 +6 +11 +8
Public Non-housing 9779 7823 7041 6900
-21 -20 -10 -2
Private Industrial 3289 3453 3557 3699
+1 +5 +3 +4
Private Commercial 21647 19699 18517 18517
-10 -9 -6 nc
Values - £m
Source: Experian Construction Forecasts (Winter 2012 / 13)

49. Primary procurement routes
 Early Contractor Involvement
 NEC Options
 ICE Form
 JCT Form
 Bespoke

50. Current Government actions on procurement reforms
 Building Information Modelling
 BS11000
 Supporting the customer business case
 Whole life costing
 LEPs / DCLG
 Frameworks
 Government guarantees

51. Influences from EU
 Overseas competition increasing
 JV requirements
 Behaviour and culture considerations

52. Customer trends in procurement
 Early engagement of supply chain
 Portfolio finance
 Customer support
 Quality important to customers
 Innovation

53. Importance of CSR related activity
 CSR (Corporate Social Responsibility)
 What is important to the public procurement bodies

54. Challenges facing UK procurement over the next few years
 Funding / finance
 Planning regulations
 Use of section 106 money
 People