International Construction Clients Forum PARTNERSHIPS FOR PERFORMANCE, CLIENTS LEADING THE WAY 17 18

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International Construction Clients
ForumPARTNERSHIPS FOR PERFORMANCE, CLIENTS
LEADING THE WAY17 18th October 2005, Port
Elizabeth, South Africa

• IMPROVING VALUE FOR CLIENTS,
• SUPPLIERS, AND SOCIETY
• GEORGE K.I. ANG, Rijksgebouwendienst
• NL Government Building Agency
• SAM AMOD, Development Engineering Consultants

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INTRODUCTION
WHAT IS VALUE? VALUE BASED PROCUREMENT CONSTRUC
TION CLIENT ASSOCIATIONS PRINCIPAL ELEMENTS THE
CHALLENGES
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WHAT IS VALUE ?

• Value and buildings
• Vitruvian formulation commodity firmness
  delight
• Spatial - Indoor environm Symbolism Financ
  (components)
• End user Investor Owner Society
  (stakeholders)
• Value and suppliers
• Value concepts in the section of suppliers
• Prequalification based on past performances
• Attitude and abilities to collaboration -
  teamwork
• Value based procurement
• Concepts examples of leading practice
  worldwide

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VALUE BUILDINGS

• Value versus costs overruns
• Suez canal 1900
  
• Sydney Opera House 1400
• Concorde 1100
  NL Court of Justice - benefit sharing

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VALUE BASED PROCUREMENT (1)

• Value and Building
• Spatial - Indoor environm Symbolism Financ
  (components)
• End user Investor Owner Society
  (stakeholders)
• Benefit sharing in DesignBuildFinanceMaintenance
  -Operate
• Complex of Palace of Justice Tax office,
  Rotterdam NL

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VALUE BASED PROCUREMENT (2)

• Value and building
• Criteria for urban- and building related value
• Performance approach in DesignBuildFinance
  contract
• Court of Justice s-Hertogenbosch, Netherlands

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VALUE BASED PROCUREMENT (3)

• Value and suppliers
• International leading client practices
• International trend non price value based
  procurement
• Alliancing NMA Australia Kowloon-Canton
  Railway Corp
• 
  
• Decisive role of public procurement in all
  leading countries

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CONSTRUCTION CLIENT ASSOCIATIONS

• The role of clients with end-user focus
• Client associations in Denmark, Sweden and
  Australia
• Australian Property Council
• Prequalification based on past performances,
  and the
• Impact of Codes of Practice (Australia, Hong
  Kong, Spore)

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PRINCIPAL ELEMENTS

• Benefits to wide range of stakeholders
• Whole life costs rather than initial costs
• Outcome rather than prescribing solutions
• Select supply side by reference to performance
  indicators
• Socio-economic imperatives

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THE CHALLENGES

• Creating the value proposition
• Value equation only partly measurable
• Different parties different visions on value
  - methodology
• Finding the right selection formula
• Value as basis for selecting the team
  individual members
• Can pre-qualification adequately cover
  non-price factors?
• Satisfying public accountability requirements
• Long tradition of competitive lowest price
  procurement
• Trials of new arrangements value based
  procurement?

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FINAL REMARK

• Finlands Sakiri Riihelä citing Lao Tsu
• The reality of the building
• does not consist in the roof and the walls,
• but in the space within to be lived in
• (Ref. Study DK-F-SF-NL, Bartlett Research Paper
  nr. 12)

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Value to Society South Africa
IMPROVING VALUE FOR CLIENTS, SUPPLIERS, AND
SOCIETY THROUGH THE PROCESS OF PROCUREMENT
Sam Amod

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Value to Society South Africa

• Value includes
• Sustainability
• Reducing waste
• Poverty alleviation
• Community upliftment
• Can we have an impact on socio-developmental
  goals?
• Historically disadvantaged groups
• Black people
• Women
• People living with disabilities

Sam Amod

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South Africa post-Apartheid

• Challenges
• Low skills base
• Racially biased
• Procurement criteria
• Price
• Functionality
• Preference for socio-developmental goals

Sam Amod

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South Africa post-Apartheid

• Preference for socio-developmental goals
• 10 - 20 preference/premium
• Ownership and control,
• employment equity,
• skills spend,
• downstream procurement,
• enterprise development,
• corporate social investment

• Creates value
• future clients,
• future suppliers
• society
• encourages relationships

Sam Amod

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Challenges

• Client leadership role in value to society
• Cost benefit issues
• Quantifying value added
• Is the spirit in which a thing is created
• as important as the product itself?

Sam Amod