ResoLex Roundtable round-up: FAC-1 Framework Alliance Contract Lessons

ResoLex Roundtable round-up: FAC-1 Framework Alliance Contract Lessons

Last week, we were delighted to be joined by Professor David Mosey CBE for an update and lessons learned since the launch of the FAC-1 Framework Alliance Contract.

Ed Moore opened the session, commenting that David had first introduced the FAC- 1 Framework to the ResoLex audience at a previous roundtable event in February 2018. It was therefore heartening to see the traction the framework has achieved over the last five years.

David began his presentation by explaining that the FAC-1 is a multi-party framework alliance contract that integrates the procurement and delivery of one or more different projects, with the ability to connect multiple contracts awarded to each collaborative team member. It creates the ability to establish the relationships and systems that the parties wish to use to embed collaborative ways of working, supporting the achievement of improved value, risk management and dispute avoidance.

So far, the contract has been adopted on the procurement of over £100 billion of contracts, ranging from smaller £5 million projects and SME consultant alliances to the £60 billion contractor/ consultant/ supplier procurements of the Crown Commercial Service.

Some of the key features of the FAC-1 contract are as follows:

  • Creates a bridge that integrates multiple project appointments and operates in conjunction with multiple FIDIC, JCT, NEC and PPC forms
  • Allows alliance members to include the client, any additional clients, an in-house or external Alliance Manager and any combination of selected consultants/ contractors/ suppliers/ providers, with the facility to add additional alliance members
  •  Enables the planning and integrating of a successful alliance, setting out why the alliance is being created, and stating agreed objectives, success measures and targets, with agreed incentives if these are achieved and agreed actions if they are not achieved
  • States how work will be awarded to alliance members, under a direct award procedure and/or competitive award procedure and under early standard form orders
  • Describes how the alliance members will seek improved value through shared alliance activities, including a collaborative system for engaging with tier 2 and 3 supply chain members
  • Describes how risks will be managed and disputes avoided, using a shared risk register, core group governance, early warning and options for an independent adviser and alternative approaches to dispute resolution
  • Provides the flexibility to include particular legal requirements and special terms required for any sector and in any jurisdiction.

David highlighted a number of different examples where FAC-1 has been used successfully, and one of the best examples came from the Ministry of Justice.

 

New Prisons complex project alliance

The UK Ministry of Justice (MoJ) created an FAC-1 Alliance to procure their £1.2 billion new prisons programme. The alliance integrates the work of ISG, Kier, Laing O’Rourke and Wates as contractor alliance members, with Mace as alliance manager, and supports their use of BIM and Modern Methods of Construction to agree on optimum designs and strategic relationships with key tier 2 supply chain members.

MoJ report that their FAC-1 new prisons alliance has meant they have been able to use the alliancing process both as a contract form and as the means to structure the relationships. This approach helped to embed the collaborative relationship early, from the alliance launch to the transition through the different phases. Each of the four contractor alliance members nominated representatives from their organisation to sit alongside representatives from the MoJ and its other delivery partners (Mace, WT Partnership and Perfect Circle). Together, they formed the Core Group, establishing strong leadership and trust from the outset.

One of the highly positive outcomes of the use of FAC-1 has been greater cost certainty and cost savings. MoJ reported that these included:

  • Fees for the pre-construction collaboration phase finalised at the tender stage
  • Direct fees (overheads and profit) and staff preliminary rates fixed at the tender stage
  • Projected duration and contract value based on previous prison builds at HMP Five Wells and Glen Parva
  • Pre-construction supply chain collaboration to build up cost certainty and savings by transparent supply chain engagement for key or critical packages on all four prisons i.e., mechanical, electrical, and plumbing engineering, pre-cast concrete, and cell windows and doors.
Final thoughts

The final message from David was that recent evidence suggests that more public sector clients are starting to look at alliancing as a beneficial method of procuring major projects and programmes of construction work. Alliancing does however require a significant shift in both mindset and behaviours, where each of the parties involved is intent on working collaboratively over a prolonged period to achieve win-win gains. In the absence of an agreed set of processes and structured agreements, there is a tendency to revert to short-term transactional behaviours.

The advantage of FAC-1 is that it provides a set of highly flexible mechanisms which are easy to set up, and then provides the programme leadership with the processes needed to create effective relationships.

You can find the round-up from the first FAC-1 roundtable on our website here: https://resolex.com/events/resolex-roundtable-building-a-supply-chain-alliance/

For anyone thinking of using the FAC-1 contract, David has written a handbook which helps clients, contractors and advisors think through some of the practical aspects of implementing the framework. You can purchase it here:  https://www.amazon.co.uk/FAC-1-Framework-Alliance-Contract-Handbook/dp/1913019837

Challenging the Mobilisation Myth: Driving performance through effective Contract Mobilisation – Key takeaways

Challenging the Mobilisation Myth: Driving performance through effective Contract Mobilisation – Key takeaways

On Wednesday the 13th of September, we partnered with the Major Projects Association to host an interactive workshop that challenged the myth of mobilisation – and what an event it was!

We’d like to extend a huge thank you to Liz Lawman, Head of Mobilisation at HS2 (High Speed Two) Ltd and Jonathan Wareham, Project Director at Costain Group PLC for sharing their insights from both a client and contractor perspective. During the workshop, we highlighted some industry best practice and then delved into a session designed to explore the experiences from around the room. We followed Chatham House Rules, but here are a few themes from the afternoon:

  • The movement from traditional transactional relationships that prioritise the lowest tender cost, to a more collaborative relationship that can manage the complexities of major project delivery requires aligned mobilisation
  • Project teams need to understand the need for, and plan to create a cross-functional workstream for the ‘social/behavioural’ elements of major projects, which includes contract mobilisation
  • Ringfence time at the start of a project or programme with senior leaders to co-create with all parties, build the right environment and set the team up with the skills, processes, behaviours and ways of working to develop a collaborative environment
  • Early engagement with the supply chain to co-create solutions is hugely important, and provides even more value when it is part of the procurement approach
  • The team needs to be aligned behind a common purpose from the start. Work to reduce reliance on assumptions that people will work well together

We would like to thank everyone who attended and contributed to what quickly became an incredibly thought-provoking event. We hope to keep the conversation alive and support the development of a more systemised mobilisation framework alongside the MPA and some of the industry experts who joined us.

As a final lesson from the workshop, ‘don’t build the boat after leaving the port!’

ResoLex Roundtable round-up: Behavioural Impact on Productivity

ResoLex Roundtable round-up: Behavioural Impact on Productivity

Last week, we were delighted to welcome three guest speakers from Jacobs to the ResoLex Roundtable: Jessica Ellery, Gail Hunter, and Joshua Weatherley. Jacobs is a full-spectrum professional services firm including consulting, technical, scientific and project delivery with a workforce of about 60,000 people worldwide.

ResoLex Roundtable: Behavioural Impact on Productivity

 

The evening was introduced by our Associate Director, Kelachi Amadi-Echendu, who provided some background to the ResoLex Roundtables and how the event links with our values as a business. Our Chief Executive, Edward Moore then introduced the topic, reminding us that whilst collaboration in itself may be very nice, if it doesn’t improve productivity, one has to question the point! At ResoLex, we see projects as comprising three primary areas of expertise: technical, commercial, and social. We believe that the key elements are interlinked, and the social component is inextricably linked to project performance. During the session, Ed highlighted our model, and expanded on the need to take an integrated approach to the three elements in order to achieve project success.

Jess, Josh and Gail explored the topic through the lens of a live giga project that is in its early stages of delivery in Saudi Arabia. A perspective offered was that perhaps the scale and longevity of such programs offered the chance to truly embed an effective, collaborative social system, even more so than the opportunity we have in the mega-project environment. The presentation began with a poignant safety moment, and then an introduction to four immense projects in the Neom region of Saudi Arabia. Each of these projects are hugely ambitious, the most dramatic being The Line. The Line is a revolution for urban living, which according to the plans will be 500m tall, 200 meters wide and a staggering 170km in length. Whilst a project of this scale is fascinating in itself, the evening’s platform served as the backdrop to a much broader discussion around the challenges of working in such a complex programme environment. Throughout the session, Josh and Gail prompted the audience with a range of engaging questions and themes designed to stimulate debate (a dangerous thing to do with a ResoLex audience!).

ResoLex Roundtable: Behavioural Impact on Productivity

The presentation identified the challenges created by the multiple interfaces that must be managed by the teams and explained that this becomes exponentially more difficult to cope with as size and scale increase, supporting the initial introduction and highlighting the need to therefore factor in behaviours when setting the project strategy. This stimulated a lengthy discussion in the room around the more nebulous concepts of leadership and project culture, there was a common agreement that paying attention to these areas early in the programme is a critical success factor. It was also noted that one of the reasons for the poor performance of mega projects, in general, is the lack of ability for many project leaders to scale up from large projects, and when faced with high levels of complexity, they tend to fall back on simplistic solutions which inevitably fail in more complex and challenging environments.

So, what are the conclusions from the evening’s discussion? Here are our top five takeaways:

  • There is a need to ‘operationalise’ collaborative intent. In other words, major projects (and especially giga projects) need to focus on establishing the policies and processes that will embed the principles of collaborative ways of working throughout the programme, rather than limiting the discussion to senior management.
  • Focus on the active steps needed to build a positive culture, avoiding the default tendency to revert to transactional behaviours as soon as the project comes under pressure.
  • The risk management process needs to acknowledge behavioural risk and recognise that effective inter-team relationships are both a risk and an opportunity.
  • Relationship management plans should be a compulsory part of the early planning process and should focus on identifying the critical interfaces that need to be mapped and managed.
  • Project leaders need to be trained specifically in the practical tools and techniques that will enable them to make the right decisions when working in highly ambiguous and complex environments.

The session closed with reference to the work of Edgar Schein, and his observation that for successful teams, people need to build ‘Level 2 relationships’ with their colleagues. This level of relationship is where we know enough about the people we work with on a regular basis to be able to see them as human beings, rather than just human ‘resources’, who carry out a functional role.

Overall, it was another stimulating and educational evening, with a wide range of views and opinions. As we see projects and programmes becoming ever more ambitious in their scale and desired outcome, the session is a reminder (should we need it!) that planning, setting up and mobilising for success from the start makes life considerably easier for the teams trying to deliver downstream.

If you’d like to join our next Roundtable, please keep an eye on our events page or sign up for our LinkedIn events newsletter.

UK Construction Week 2023: Culture Change

UK Construction Week 2023: Culture Change

Yesterday, we visited ExCeL London for the first day of UK Construction Week 2023. The theme this year focused on the importance of ‘culture change’ within the industry and was celebrated with a Culture Change Hub, a new addition to the Construction Week programme. Sessions at the Culture Change Hub were delivered by a diverse range of speakers and panellists, covering topics including equality, diversity and inclusion, mental health and attracting new entrants to the industry.

It was great to see so many people coming together to challenge the status quo, articulate the cultural barriers within the industry and highlight the need for change. Below are some of our key takeaways from the day.

Culture change: What does it mean for the construction industry?

Panellists:

  • George Clarke, Architect, television presenter, lecturer and writer – Channel 4, MOBIE (Facilitator)
  • Mike Pitts, Deputy Challenge Director – Transforming Construction – Innovate UK
  • Nikita Mikhailov, Personality Psychologist – PsyPub
  • Amit Oberoi, Executive Chairman – Considerate Constructors Scheme
  • Bijal Mehta, Associate – Marchini Curran Associates

The panel members as part of this seminar identified that we are experiencing an important shift in language. We are moving away from a focus purely on construction, towards the ‘built environment’ as a descriptor for the activities that organisations across the industry are involved in and contribute to. This is a more inclusive way to describe the industry, both allowing room to include designers, clients, and those with boots on the ground delivering the projects and encompassing the societal and environmental impacts of all aspects of what we do as an industry.

The discussion moved to the realm of mega projects, with reflections that they often draw negative attention in the media, reporting is often focused on problems, delays and over-expenditure, with limited mention of the positive impacts, particularly for local communities. The panellists all agreed on the power of stories and narrative, and endorsed a need for positive stories to be spread about the positive transformation that these major programmes deliver.

Culture Change panel

There was a consensus that there is still a need for a huge change in culture and more importantly mindset. The culture of the industry needs to be more inclusive and better at embracing diverse thinking. Discussions on confirmation bias and tribal tendencies reminded us that, as individuals, we like to stick with groups of people who support our thinking and may therefore struggle to harness the benefit of our differences. Actively listening to those who may challenge our thinking will encourage differing perspectives, allowing us to have a better understanding and hopefully, avoid biased thinking.

Cultural change: how?
While it is great to see many people highlighting the importance of cultural change, we need to look at how and more importantly, why?

There is a growing awareness of the impact that culture has on the success of any large group of people trying to work together. The limited research that has been done tends to focus on culture change in existing businesses and institutions but seldom project delivery teams.

Not only will this encourage diverse thinking but a positive and healthy culture will drive increased performance and staff retention.

There is no simple blueprint for how to approach culture on a project but we did start to address the topic in an article that looks at the culture within the project environment and explores how you can build and sustain the desired culture in the project environment: https://resolex.com/news-insight/culture-in-the-project-environment/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ResoLex Roundtable round-up: The Private Sector Playbook

ResoLex Roundtable round-up: The Private Sector Playbook

The discussion yesterday evening focused on the Private Sector Construction Playbook, a best practice guide published in November 2022. We were joined by two guest speakers, Alison Cox, Managing Director of Sir Robert McAlpine London  Charles Horne, Project Director of British Land and, ResoLex Chief Executive Edward Moore.

Our Principal Consultant, Kelachi Amadi-Echendu began the session, by describing the journey from the government’s Construction Playbook to today’s Private Sector Playbook. She explained how the themes from the ResoLex publication ‘Changing Behaviours in Construction: A Complement to the Construction Playbook’, apply not only in the public sector but also to private sector projects and programmes, to enable improved delivery and better outcomes.

“Historically, the UK construction industry has been characterised by a lack of openness, poor productivity and a failure to invest in innovation”.

Foreword, Trust and Productivity The Private Sector Construction Playbook, November 2022

With many years of experience in the sector, driving excellence and delivering complex and challenging solutions for clients,  we were delighted to have Alison Cox join us. Alison began explaining that the Private Sector Playbook was created by the construction productivity taskforce, a working group of developers, contractors, suppliers and professional service providers from the private sector whose underlying purpose is to try and improve productivity in the construction industry. She noted that whilst productivity had improved in a number of sectors,  construction productivity had actually declined by 0.6% in the last 20 years. The document was designed to complement the Public Sector Construction Playbook that was released in 2020, taking cues from the public sector whilst understanding the challenges faced by the private sector.

The Playbook is structured around ten key drivers for success, as illustrated in the diagram below. It is interesting to note that half of these focus on culture and behaviours. Alison emphasised the need to concentrate on building the right relationships, particularly at the beginning of a project. She mentioned her own experiences on the construction of the Bloomberg offices where key members of the different teams sat in close proximity in a co-located office. This was a project that was quite dynamic and required the team to be highly adaptable to changes in requirements. The strength of relationships established in the early phases of the project enabled the teams involved to focus on ‘best for project’ decisions, rather than solutions which might be best for individual organisations.

10 project drivers -Private Sector Playbook

Charles observed the many changes in the construction industry since his experiences working on sites in the mid-1980s, as illustrated by the massive shift in safety that now exists compared to forty years ago. He highlighted the cultural change around health, safety and wellbeing, which simply did not feature when he first began his career. His primary observation is that projects are delivered by people rather than by technology or process. His recent experiences are drawn from Broadgate, where British Land is developing seven consecutive significant buildings under the Broadgate Framework. His starting point for creating the development strategy was the recognition that the customers for these properties are the local users in the area, and as such, care needs to be taken to avoid creating major disruption as the construction works to proceed. Charles’ approach required working with partners rather than suppliers, and so, in a significant break from traditional procurement practices, British Land has entered into a 10-year framework agreement with Sir Robert McAlpine. The framework enables British Land to reduce the risk of multiple concurrent projects and promotes consistency, continuity and innovation.

Contractual mechanisms aside, Charles, focused from the start on establishing an underlying ethos for the programme, based on the principles of Trust, Honesty and Collaboration. These principles have been developed into a set of rules, which every individual involved in the projects are expected to follow. The rules are generally self-policed, and there are very few instances where they are not applied by the numerous teams engaged in the programme. Charles identified a critical role that leadership plays in establishing a successful culture, recognising that in a collaborative contract, leaders need to be skilled at building ‘followership’.

He recognised the challenges of complexity and used the analogy of a pebble dropping into a pond and creating small waves. As projects grow in size and scale, leaders must deal with the challenge of lots of pebbles, dropping into the pool at the same time each creating ripples which intersect and disrupt with each other. He agreed with Alison that co-location is a critical factor in building cohesive and collaborative teams and is fundamental to building teamwork and understanding.

Ed Moore identified the need to establish the right culture from the start, quoting Abraham Lincoln, who said ‘give me six hours to chop down a tree and I would spend the first four sharpening the axe’. Ed made the case that programmes should treat relationship development as a distinct and separate workstream with its own targets and deliverables. Ed observed that too many project leaders tend to assume that their teams will naturally form into collaborative teams and therefore ignore the opportunity to shape the behaviours which occur at the very start. Ed also highlighted the need for project and programme teams to introduce a framework to help teams structure their workstream, and gave an example of the ASARI framework created by ResoLex as illustrated below:

ResoLex ASARI framework

Some of the key points of the discussion from the floor, were as follows:

  • Project culture is directly linked to the quality of leadership.
  • A critical skill for project leaders is to learn to listen to other points of view rather than press on with their sole perspective as to how a problem should be solved.
  • The time for the individual heroic project director has passed. The role of the project director is now to build leadership throughout the team.
  • The primary barrier to industry-wide adoption of the Private Sector Playbook remains a driver amongst many clients to appoint the lowest tender, thus propagating the bad habits, behaviours and relationships that inevitably emerge from such practices.
  • The key to wider adoption must be to focus on being able to clearly articulate the difference between value over cost and use the successes of previous projects to persuade others to continue to support a route based on effective relationships.

As a final comment, Charles pointed out that on Broadgate, each of the individual projects is still negotiated within the framework. He nevertheless observed that not one contractual letter has yet been issued by either party throughout the delivery of the programme. As he put it, when a difficult issue arises it is ‘our’ problem, not just ‘your’ problem. This is a great illustration of collaboration working in practice.

You can find the featured publications linked below:

 

The Infrastructure Governance Code: permission to challenge

The Infrastructure Governance Code: permission to challenge

Insight from the event: “How to engineer great governance for better outcomes”, which marked the launch of the ICE’s Infrastructure Governance Code on the 25th of January 2023.

ICE Event

The code itself very clearly describes the context into which it is launched: the complexity of delivering major infrastructure projects and programmes is more than can be solved by traditional approaches. As an industry, we are faced with the need to change our ways of working to be able to effectively address the critical challenges of our time. The code is embedded in Project 13’s governance pillar and presents an opportunity to again bring attention to the enterprise model, and a better means of organising projects to deliver outcomes.

“This Code provides a structured system of good practice and challenge that creates the right environment to support effective decision-making.” – The Infrastructure Governance Code

The structure of the code provides a ready-made framework for organisations and project teams looking to organise themselves in the manner of Project 13. Below we explore a few reflections on some of the themes discussed at the launch event.

Front-end loading

Reiterating the message of his blog ‘Setting up for success:  The importance of Front-End loading’, Nick Smallwood highlighted the importance of investing time and resource early on in a project to plan effectively and review the desired approach, before diving into delivery. This continues to be a key theme across industry best practice, recently highlighted in the Construction Playbook. During the event, Dr Simon Addyman also noted that there are many well-documented case studies in which the benefits of front-end loading to achieve the project or programme outcomes are clearly demonstrated. The question then remains, why is it difficult, at the initiation stage of so many projects and programmes, to resist the urge to rush into delivery?

We often talk about the need for diverse thinking within our teams. For me, this is another situation where we must recognise that the lack of diversity in skills across our teams is damaging our ability to deliver the best outcomes. If major project teams are over-represented at the initiation stage by those who are enthusiastic about delivery, they can overwhelm the voices of those who would spend more time developing ideas, designing and testing solutions, and assessing and reassessing whether the plans we have put together will take us to where we want to go!

Front-end loading is, in many ways, about getting the appropriate balance of these skills at each stage of the project lifecycle. This happens through creating the right environment and setting up the team, decision-making and governance processes. All with the outcome of the project at the centre.

Professional responsibility to do our best

David Porter, Vice President of the ICE reminded us of the mission of the institution, and the call to civil engineering professionals to always do their best for society. This commitment and belief in the importance of the role that civil engineering and infrastructure delivery play in society is often a strong driver for the move towards zero carbon and more sustainable use of materials, but what could it have to do with governance?

The persistent feature of all our infrastructure challenges, whether economic, environmental, social or otherwise, appears to be increasing complexity. Instead of a single problem, where a traditional approach to finding one solution would suffice, we are now trying to solve a much more interlinked set of problems that are constantly changing. Our response must therefore reflect the complexity, meaning that we must have both resilience and flexibility in our ways of working – including governance – so that it doesn’t simply break under the strain of change.

The inclusion of behaviours and accountabilities in the code is vital in acknowledging this need for resilience and flexibility. Much of what is needed is less about incremental improvement, and more about a change in approach, which as we have seen from the changes in safety culture in construction, is highly dependent on behaviours and accountabilities. The principles very clearly set requirements for the social competence of the governing body, to be able to make effective decisions in a complex, dynamic environment. It sets the expectation that, much like the technical and commercial elements, the social competency of leaders is not left to chance; expectations are articulated, and the right individuals are sought out, supported, and developed. Sue Kershaw shared an example of a board of directors who engaged an independent coach and expressed the value that they gained from having someone who was able to provide objective reflection, enable self-evaluation and help the group understand the effective and ineffective ways in which they were working together. This is the essence of our approach to working with project teams – sitting on the edge of the team, board, or leadership group where it is possible to be fully committed to the project outcome while having enough independence from the internal systems to provide valuable insight into them.

The governance code, along with the rest of the Project 13 ethos and maturity model, provides the industry with a framework to safely challenge the way that things have always been done in order to deliver better outcomes for the benefit of society, now and in the future.

You can download a copy of the new governance code here, or catch up on the presentations from the launch event on the ICE website.