A housing association in the East Midlands is the first to use a new framework contract that connects competitors and encourages them to work together.
Futures Housing Group has adopted the Framework Contract Alliance (FAC-1), which not only makes it easier for small businesses to bid for deals, it sets shared objectives for those on the framework.
Professor David Mosey of Kings College London was commissioned in 2015 by the Association of Consultant Architects and the Association for Consultancy and Engineering to create new forms of framework alliance. He said of FAC-1: “The benefits are that you combine the pipeline of work under a framework using the shared objectives of an alliance.
“In other words, you’re connecting people who think they are competitors and saying ‘there’s a pipeline of work from us and there are ways of working together for your benefit and ours'. It uses the throughput of work to make people more innovative and collaborative.”
Alliance members are expected to work together to improve value, share information on suppliers, review and compare prices and tender or renegotiate subcontracts.
Mosey originally drafted PPC2000 and has since worked closely with the UK government on trial projects to analyse the savings and other benefits of the ‘two stage open book’ procurement and delivery process. The results of these trials were included in guidance launched by Sir Vince Cable in July 2014.
Futures Housing Group, which manages more than 9,000 homes, said the impact of the framework alliance could be clearly seen in its latest process.
Head of procurement John Thornhill, said: “The first contract we’ve put out under these new rules, for planned maintenance works, has seen around 90 businesses bid – which is unprecedented. The changes to the law have put us in touch with smaller businesses that previously weren’t able to afford to work with us, for example due to cash flow constraints if they took up a works programme.”
The new contract, which was launched on 1 August, combined with the latest procurement rules has enabled SMEs to tender for parts of bigger overall frameworks with Futures, creating healthier competition in the market and giving the organisation more resources to draw on. The approach is designed to be easy to understand and to help improve legal compliance as well as better value for money.
Mosey said of Futures: “This is the first not only for the housing sector, but in any sector in terms of the use of the contract - there'll be a lot of people coming behind.”
The guidance says it fills a major gap in the market and can also be used with JCT, NEC, FIDIC and any other standard form construction contract.