What can construction learn from the Royal Navy?
How can the construction sector learn from Naval procurement? As part of our role with Defence Equipment and Support – an arm’s length body of the Ministry of Defence (MoD) – Mace is currently working with the Royal Navy to help procure its next frigate, adapting our expertise in procuring for the built environment to a whole new class of asset. Sarah Duncan, Mace’s Commercial Manager, explains.
In line with the UK’s National Shipbuilding Strategy, the MoD has launched a competitive tender process to build five general purpose Type ‘31e’ frigates. Intended to carry out maritime security and humanitarian exercises, alongside several other functions, these new frigates will join the next generation of the Royal Navy’s fleet.
The Type 31e programme is tasked with delivering the frigates, some of which are intended to replace the nation’s current Type 23 ships at a competitive price.
Through Paragon, Mace’s joint venture company with Turner and Townsend, we form part of the Type 31e programme team. We have been tasked with taking principles laid out in the National Ship Building Strategy and using them to trial a new style of procurement that meets the MoD’s requirements to improve delivery times and ensure the end product is value for money.
This innovative approach, similar to that adopted in the past for the London 2012 Olympic and Paralympic Games, seeks to work collaboratively with industry during the first stage of the design process – the ‘Competitive Design Phase’ – to understand how the bidders’ existing solutions can deliver the end product on time and on budget, whilst meeting the Royal Navy’s threshold requirements for capability.
In parallel to the Competitive Design Phase, we are supporting the MoD during negotiations for the main Design & Build (D&B) contract, the aim of which is to be able to award a contract earlier than is normally possible in the procurement process.
The Royal Navy is looking for a reliable and dependable class of frigate, which presents export opportunities for the Royal Navy and wider UK industry, but is also affordable for the British tax payer. It’s an innovative approach to procurement focussed on securing a wider legacy – the ultimate goal being that we can create a lasting platform on which to procure in a faster and smarter way. The strategy is also geared towards bolstering UK industry, through the use of British shipyards and UK supply chains to create opportunities for British organisations.
While there is emphasis on the overall capability of the frigates, significance is also placed on the day to day running of the ships. They need operational capability, while also serving as a suitable place for people in the Royal Navy to live and serve. This is where the early design work adds real value, reducing programme time and identifying hidden costs that could crop up further down the line.
There are clear lessons here for construction.
On large and complex construction projects, it’s often the design process that delays the build process, with further amendments and iterations coming too far down the line, when delivery is already underway and contractors identify aspects that are unviable. This is an area where the construction sector should learn from the defence sector and consider involving the supply chain earlier on in the design phase.
If there is to be an improvement of the design process, procurement methods also have to change.
Construction projects can also suffer long delays because time isn’t taken early on in the process to consider the long term challenges and opportunities. Consequently, procurement is often a ‘point in time’ assessment, carried out with little consideration for what lies ahead, other than programme milestones. Bidders are stifled, unable to show how capable and innovative they can be. With the Type 31e programme, the bidders’ existing solutions are being developed in line with programme requirements before a contract is even awarded. Importantly, this gives bidders the opportunity to shine, while also benefitting the client by encouraging early, pre-emptive problem solving.
Why could we not adopt a similar approach for construction projects or even multifaceted infrastructure projects? There is an opportunity here to learn from the defence sector, to absorb ideas from other industries, and adopt a more effective approach to procurement.