Procurement Efficiencies: Monitoring and Evaluation of Devanha Phase 2
This research is a monitoring and evaluation study of the Devanha Phase 2 procurement initiative established in 2006 by five RSLs in North East Scotland: Aberdeenshire Housing Partnership, Castlehill Housing Association, Grampian Housing Association and Langstane Housing Association. The research involved a four year monitoring exercise during which data was collected annually. The research also aimed to analyse transferable lessons which could be learned from Devanha’s experience
The framework is the strategic long term agreement between Devanha and the framework contractors to deliver the housing programme. The framework allocated workload over the life of the programme to each of the contractors and set out broad terms relating to price and quality. The long term nature of any framework is intended to enable modern collaborative working principles to be embraced as a means to improving quality and procurement efficiency.
The three framework contractors on Devanha were Chap, Bancon and Robertsons.
The NEC form of contract was adopted for Devanha. This is regarded as a best practice, collaborative procurement contract to promote the principles of value for money. NEC is widely used in framework arrangements, notably by the NHS in procuring healthcare projects. The specific form of NEC adopted in Devanha was NEC3 Option C - Target cost contract.
Open book costing
Open book costing is a central feature of the NEC form of procurement adopted in Devanha that allows the client to see the contractor's input costs. It involves the contractor "opening their books" on their supplier and material costs to the client. The construction cost to the contractor is used to set the target cost for each scheme. The open book process is a significantly different way of working for Devanha partners which required a higher level of trust and collaboration than required for traditional procurement.
Compensation events are a feature of NEC that replace variations and extension of time clauses found in traditional contracts. A Compensation Event compensates the contractor for any additional cost or time incurred on the construction of a scheme that is not the fault of the contractor, i.e. it is a client risk. Example compensation events would include revisions to the design or specification as the works progress, including substructure works and rework from special needs adaptations not considered in the original design.
MVPI - Moray Volume Procurement Initiative
Non-framework schemes procured in tranche 8 of Devanha. These schemes were procured by traditional arrangement outside of the framework and provide for some comparison between framework and non-framework schemes.
Email: Pauline Innes
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