Partnering, PFI and Framework Agreements

Question 1

Explain what you believe to be the term ‘Partnering’, and why it was introduced in the construction industry. How does this differ from other more traditional procurement routes?

Answer 1

Partnering is a collaborative management approach between parties which encourages openness and trust - parties become dependant on one another for success.
It was introduced due to the Latham Report which criticised adversarial traditional contracts.
It differs are the parties have to communicate and build trust between each other, whereas the traditional routes have a very much separated method.

Question 2

Discuss who would use partnering.

Answer 2

• public clients e.g. hospitals
• private clients e.g. retail
• contractors, subcontractors, consultants

Question 3

What benefits would clients/projects/industry gain by using partnering?

Answer 3

Design, BIM, social, innovation, research and development, finance/capital, expertise, reputation.

Industry would benefit from projects which have potential to be greater than if it was carried out by just one contractor.

Question 4

List as many partnering arrangements you are aware of within the construction industry.

Answer 4

• joint ventures
• LEP-
• Framework Agreements
• PFI
• Scape

Question 5

Briefly explain when you would use each one listed above.

Answer 5

• LEP (local enterprise partnership): voluntary between local authorities and businesses - used to help local economies and lead growth and job creation.
• Joint ventures: allow smaller companies to deliver larger projects, gain knowledge in overseas markets. Could be used to expand markets they operate in.
• Framework agreements: agreement with suppliers which established terms governing contracts made within its lifetime. e.g schools, supermarkets
• PFI: private firms contracted to complete public projects e.g. new schools.

Question 6

Is partnering legally binding.

Answer 6

Can be legally binding if a partnership agreement is used which acts as a contract between the parties, this will show roles and responsibilities of each party.

Question 7

What are framework agreements, and how do they differ from more traditional forms of contract.

Answer 7

An ‘umbrella’ agreement which covers but does not interfere with the underlying contracts. It establishes terms for contracts which can be used for the agreements lifetime.
Differ from traditional as they incorporate continuous improvement, collaborative working and long term partnerships.

Question 8

What is a measured term contract? Describe how you would use this form of contract?

Answer 8

Used when client has regular programme of works and wants a single contractor to complete the works. Used for minor or maintenance works.
Appointment is based on an agreed schedule of rates related to the categories of work that are likely to form part of the programme. Client will issue an instruction to contractor and a valuation agreed by the client and contractor, payments are then calculated based on an agreed schedule of rates.

Question 9

Explain the procurement process used for setting up a framework agreement for one of the following: consultant, subcontractor or client.

Answer 9

Client will invite tenders from subcontractors on a call-off basis as and when required.