The Red Review - Alliancing all the way
In this episode, Jeremy talks to leading procurement consultant Kevin Murray about alliances, collaboration and supply chain engagement.
Transcript
[00:00.5]
The Red Review is brought to you by Growth Ignition, the transformation consulting, training and enabling tech firm in the work winning space and their product set, the Bid Toolkit, the online bid processing guide with APMP accredited training and tools to download.
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Hello and welcome to the Red Review with me, Jeremy Brim. We've got a. This is our second episode in our new series and we've got an exciting episode today with a great guest, Kevin Murray. Hello, Kevin, how are you?
[00:35.3]
Hi. Hi, Jeremy. Thanks very much for, inviting me on. Looking forward to an interesting discussion around, alliancing. So, yeah, thanks for inviting me. Very good. Thank you for making the time. So we've crossed paths a bit, Kevin, in our professional lives.
[00:53.1]
We've both worked on bids together. I've pointed you to some clients to advise them on shaping their thinking around bidding. But if you wouldn't mind, just giving a bit of an overview back to your background and then what you get up to these days, that'd be great. Yeah, sure.
[01:11.0]
Well, I started, life at the age of 18 as a trainee quantity surveyor. And I did day release, to get qualified, because quantity surveyors, probably not normally called that and they're called a lot of things, some polite, some impolite, but the change to construction cost manager, I'm not entirely sure if it came from, there was some early comedy, I think it was the 1970s where Marty Feldman went into a library and this comedy sketch where he ended up asking for a book.
[01:54.9]
Ethel, the Art of Art Goes Quantity Surveying. And then from that there seemed to be other people that picked up on quantity surveying being quite a funny thing to say. So, there was a programme, Ask the Family, where everyone on one team was a quantity surveyor.
[02:14.4]
So the mother, the father, the children. So it's probably a bit like the chase nowadays where, you know, you'd have a team and it'll be quantity surveyors. So, yeah, I mean, I've enjoyed it and, to further my career, I then did a master's in construction law, through even a weekend study.
[02:36.5]
And really it was from that, probably mid-90s when, the UK enacted EU directives around works contracts and services. And that was a big part of the, of the masters that it, it got me much more into procurement and procurement strategies, and from that into alliance and collaboration, partnering, etc.
[03:05.4]
So that's a brief bit of background. I've worked for public sector, private sector, three years ago, set up My own practise and have been busy nearly every day since and that's particularly around setting up alliancing and also doing business cases for treasury approval.
[03:32.7]
So that's my background in a bit of a nutshell really. Yeah, very good. But one of your last big roles before you came out on your own was at Crown Commercial Services wasn't it that we. Yeah it was Yeah I went I did some consultancy work for what was in the prison service that kind of really got me into central government that was back in the early 2000s and then they asked me to go back as austerity hit but they couldn't really offer me a long term contract so they said would I apply for a job.
[04:13.3]
Went to Ministry of Justice then moved to Cabinet Office and part of the Cabinet Office role was working with different departments. So I ended up doing quite a lot of work with Crown commercial and in 2019, Pure was 2019 just about left.
[04:36.9]
They awarded I think the biggest construction frameworks ever awarded by government body. It was a 30 billion 10 year sorry 6 year framework, 11 lots.
[04:54.4]
And what was interesting about it was that in addition to incorporating some of the Stacks Standard Crown Commercial Service framework, the overlay was actually FAC1 which is the Framework alliance contract that was developed by King's College in London.
[05:14.8]
And the idea was that the way that government needs to procure should be different and therefore it should set an example for other departments and for departments to use the framework.
[05:31.1]
And the real focus of the framework alliance contract obviously is about alliance but it's a lot more about collaboration and learning from one project to another. So rather than learning on a project being lost when it goes to the next one.
[05:52.9]
The idea behind the framework, the actual contracts underpinning it is that all of the good things and some of the bad things that are learned from projects are actually looked at and reviewed as a way of continuous improvement.
[06:13.2]
So it was quite a big shift for government. And I think the other thing that was also a shift was the way in which the engagement was done. I mean the first market engagement we had, I think we had 300, 300 organisations there from the construction industry.
[06:35.2]
We had a lot of supply chain and the intention, I think the intention still is that Crown Commercial will be developing things that would involve smaller organisations that have already done it in their modular but you know this is a big first step for someone like Crown Commercial.
[06:57.4]
So it was awarded 2019 and there's been an awful lot of work going through it. Last week defence announced 5.1 billion sub alliance where some contractors from the CCS framework went through a mini competition and were appointed by Defence to do a programme of work and also Ministry of Justice the four new prisons.
[07:30.9]
That was interesting so much as that. Four new prisons, four construction organisations were appointed after a competition under the CCS framework and the four constructors, Kier, Lange, Waits and Isg actually worked together to develop the design and also the pricing for the four prisons.
[08:00.2]
Kira doing the first one in North Yorkshire but the intention is that for the subsequent prisons the standard design is used. The pricing that was, that was used for the first prison will be rolled over probably subject to some indexation.
[08:21.7]
So the CCS alliance it started off with some pretty big ideas as to how it could be used and it's been encouraging that you know in the last couple of years people like the MoJ and Defence are actually working using collaboration and alliancing to deliver some pretty massive programmes.
[08:47.1]
Yeah, no, it's really exciting. So bear in mind we've got listeners mostly UK but some around the world and obviously some that are private sector, some that are public sector and some that are exposed to the start of the alliancing journey as you described and some that won't be yet.
[09:10.7]
It's a really interesting subject because I think this is kind of the future where public procurement is going and then private sector will, you know as it does follow on. So it's an interesting conversation to have. So let's just unpack the concept of alliancing first of all again so traditionally of course government have had lots of activity going on so in construction, you know building lots of schools and school extensions and bits of prisons and bits of hospitals and all that sort of stuff and traditionally those were being procured perhaps locally but certainly centrally but on an individual project by project basis.
[09:46.3]
And so just the background I did, I did a LinkedIn post this week actually because it's, it's the, the UK reef conference in Leeds this week so this podcast will go out at some point this week. Well it's probably still going on and I just haven't got the time be able to go on teaching and stuff this week.
[10:05.6]
I could have gone on Thursday this week but they don't sell a one day ticket unfortunately. Which is slightly ironic considering you can go and watch lots of talks about social value but you can't get SMBs to be there for a one day. But anyway, such is life. You have to spend 950 quid on a three day ticket.
[10:23.2]
So that's, that's some feedback for them for next time. But one of the things I said in the LinkedIn post was kind of could I urge my friends because it looks like everybody I've ever known is at that conference this week. I don't know if you've seen but yeah, I have. You know, just literally everyone I've ever worked with seems to be there and fair play to built environment networking that have organised it.
[10:43.4]
It's fantastic to see such a vibrant and well engaged conference. I'll make damn sure I go next year, if not get a stand actually. But I did, I did a LinkedIn post to urge my colleagues that were going to ask some questions around the key enabler in all of this, which is certain.
[11:02.2]
So because the problem we've had with UK procurement generally, but certainly in construction is that there's never really been a confidence in a certainty to enough degree for companies to be able to invest effectively in people and in innovation, in new process, in expanding etc.
[11:24.0]
And particularly in the supply chain. Obviously we've seen a number of modern methods of construction, off site factories close and supply chain go bust. Even major providers in the MMC world go bust recently and if bothered manufacturing activity with some assembly at the end in the end game.
[11:47.8]
And those factories need consistent uncertainty around the throughput through their production.
[11:58.8]
That's where it gets bumpy, that's where they go bust. And so there's been a real, the great thing about alliances and where the country needs to go to a certain extent that certainty because for the first time government is committing to programmes of work rather than getting on a framework.
[12:18.5]
And then you'll have to mini bit for some jobs and maybe you'll win some, maybe you won't. An actual programme of projects that you can say to your supply chain. We've got these 10 projects that are happening in this sequence. We need your components at these time points and this is the cash position, you know, this is when you'll get paid and that makes it investable.
[12:39.7]
So it's actually an example of where the country needs to go post Brexit with, you know, all of that madness. And government policy. I did a bit in my post about we need certainty of policy and detail as well. So there was a new story today in the construction press that 33 of the 40 hospitals that were committed to in the national hospital programme haven't started at all.
[13:07.5]
And that's because Boris in his time wanted to be seen to stand in front of some hospitals, in some PPE and get some votes. But in terms of the detail of what, where the money's coming from and the actual programme that's due to come doesn't exist, and that's the same across a number of programmes.
[13:25.8]
So it's great to see defence taking the lead. And obviously we had the prisons programme as a bit of a pilot, but we actually need quite a lot more of this quite quickly as a country, because as I said in My post, there's 3.1 million people working construction. That's 9% of our workforce.
[13:42.1]
And it's always treated as the poor relation. It was last to be thought of in the pandemic response, poorly supported through that, you know, had furlough like everyone else. But there's just no thought in terms of the industrialization of our industry in construction.
[13:59.8]
And you can see variances of the same sort of degree in other public sector facing stuff. So the alliance in point in itself it's a great idea, but it's actually a catalyst for much to resolve much bigger problems because it helps unlock that certainty point as one thing I certainly want to get across.
[14:18.6]
So it's exciting. There's a conversation to be had about SMEs and innovation, I guess. We were just talking before we started, weren't we Kevin? About in effect, in this construction example, the government is using contractors as delivery vehicles of programmes of projects for the first time.
[14:38.7]
And I don't know about you, but this feels like it's come around quite quickly. I think, it is quite quick. I mean, if I go back to the initial work with the prison service, I mean that was 2002 and on that one, my recommendation was for a 10 year framework, I mean, which, in the public sector was kind of unheard of.
[15:07.4]
And I remember meeting with treasury solicitors, and I basically said, we've not had the meeting, give it a try. I mean it was. And that alliance, I mean that alliance did run for the 10 years and it delivered 10,000 prison places.
[15:26.3]
I mean it's great value for money. But the point about to me is interesting because you mention all the people that work, work in the construction industry, 99% of the companies that actually provide construction works are SMEs and you know, just over 50%.
[15:51.1]
It's either a one person band or one person band plus an employee. And so, I mean it's a great start where people like Justin Defence are using alliancing.
[16:10.3]
But when you look at the structure of the industry, the fact that 99% of companies are SMEs, very few actually do get on government frameworks. And I noticed the last one that the MOJ did, they're going to their own framework.
[16:31.4]
It's interesting what they've done but it is all pretty much all the big contractors on there. Whereas, you know, really to get a much wider take up and a better spread of good practise, government does need to be working with SMEs.
[16:56.5]
And you mentioned industrialization. Well, given those numbers, research and development for small companies is incredibly difficult unless they've got a big pipeline of work.
[17:15.0]
And I think it is coming to some degree through modular. But the vast majority of government work is still going to the, you know, what in the UK we call tier ones, which is understandable, but it's a, you know, it's cause for change.
[17:36.2]
But in terms of model, the use of tier one contractors is just going to continue and continue until something or somebody does something very bright and actually either goes down a, construction management route, somebody that integrates supply chains etc.
[17:57.3]
I think the tier 1s are going to continue to drive the bulk of the work. Yeah, I'd agree. And to be honest with you, as we said before we started recording, I can't think of a better idea. And I don't think it's the wrong answer. I think there needs to be a recognition that those businesses, the tier one major contractors.
[18:18.8]
So obviously I've done loads of work with Morgan Sindel, I'm working with Wilmot Dixon now, obviously used to work for Mace. I recognise this conversation is quite construction, centric, but there's things to be taken out of it for other worlds. But those businesses have been set up to deliver projects, not programmes of projects like you would expect to see in more like the retail space.
[18:41.0]
You know, the example of you can, you know, McDonald's can build a restaurant in two weeks, through their model and contractors and supply chain because they've been building programmes of projects, not individual projects on a one off basis.
[18:57.4]
And so the move and the skills in programme management as an overlay above individual project management, I think is an art form that those companies will need to grow. And they may, if they were smart, if I was them, I would partner with a Mace or you know, some of the big programme delivery organisations, Bechtel or whoever to bring in some of those skills perhaps.
[19:24.6]
And then on the supply chain it's a different again procuring project by project through a standard, you know, a company supply chain chain is different to category management and deployment of a supply chain for a specific programme. And so there's, there's some thought through the solutioning of how you deliver a programme.
[19:44.8]
It's different fundamentally to delivering a project, isn't it? So, and I think that's true whether it's construction or other, other markets. And so as, as government are relying on these primes in effect as tier ones in space, it just needs to be a bit of thought to that. But it's a shame that there are, it's a real shame in the MMC space that some of the bigger modular volumetric suppliers, contractors have gone bust and sort of weakened the confidence in that space.
[20:11.2]
Because if you look at a client of mine, reds 10. Oh, you worked with as well. Yeah, you helped us with a bid, didn't you? So they've got on the ccs, off site framework recently, you know, won all of their lots which, with, with my help, which was fantastic, really interesting firm.
[20:27.4]
But their problem isn't them, it's The all of their competitors going bust and making the market look bad. But if I, if I was the government I'd find a way to get them in the mix with the tier ones, trying to solve that SME engagement and particularly innovation space.
[20:47.8]
I mean it can be done. And I know when I was at justice and to some degree with Crown Commercial, there were a couple of very high profile schemes where ministers announced the opening of particular buildings or particular inquiries, before a building had even been leased or the land had been procured.
[21:20.5]
And I think there's a perception that with government once you appoint the tier one, that every supply chain package has to be competed.
[21:38.3]
Well actually it doesn't. If a tier one can demonstrate through a business case that working with particular And E contractor that they've done for a number of years, they can benchmark prices, they can benchmark performance.
[21:59.8]
Well, I wouldn't recommend it on every scheme but certainly some form of single tender action is permitted. And I think what's been interesting with the Growth of alliancing is that, you know, Tier one's really going to have to do this.
[22:19.0]
We said that they deliver projects but if they're going to deliver programmes, that alliance in with supply chain specialists is going to become very important and getting the orders in. And a very good point you made, it's the certainty for the supply chain because, you know, if you're having to bid to six contractors on every project, you know, you look at the wasted effort in that.
[22:49.8]
But if you work with a contractor that, you know, pays you on time, that they're not, you know, withholding money from you, that they're not holding on to retentions for years, etcetera, as an SME or a soldier prize in itself, I know the value of working with people that are going to pay you, on time and what you've asked for.
[23:17.2]
So I think you've done a good job. So I think with the alliance with the Tier 1s, I think it would naturally flow as the Tier 1's Doing More programme work. You know, I think with those four prisons, the supply chain there has been pulled together by four tier ones.
[23:40.2]
And with prison construction, they've always had a lot of off site, off site construction, particularly, precast concrete. And the four contractors there recognise if we go out to these four prisons, is the market going to cope with it?
[24:01.2]
And so what they've actually done is they've actually widened, proper category management, actually widened their supply chain, by either breaking large precast units into smaller components and thereby expand the supply chain.
[24:19.1]
And therefore they're going to be working with, you know, these specialists over quite a hefty programme of work that maybe those specialists couldn't have dealt with four large prisons. But by breaking it down, he shown a real intelligence that I think age from the client, but then from those four constructors, it's quite a brave thing to do.
[24:43.5]
You know, there's an article in Building Magazine where I think it was a guy from Lang o' Rourke said it, he, he was helping care with their pricing. I mean it's kind of almost unheard of really. Yeah, but it's needed, isn't it, with, I mean in reality it probably needs to go wider than that because the, the problem is, as I was kind of alluding to, the government have all have got these big aspirations or, you know, commitments they've made.
[25:09.4]
So you've got prisons, so you got, was it 7 billion quids worth of prisons. You got 40 billion quids worth of hospitals. Well, 25 billion, but 40 hospitals, it probably should be 40 billion. You've got whatever the scale of the schools programme looks like, which has massive MEP implications because there's shedloads of school boilers that are going to expire and all sorts, as well as extensions and new schools and all of that kind of stuff.
[25:35.5]
But the problem is the government ministers have caught on to MMC as a term because they think it will solve our resource problems, as in humans. So I was just saying on a webinar I've just delivered on what I'm finding in Winning Work at the moment, that there's currently a million people more than usual off long term sick in the UK rather than 1.5 pre pandemic.
[26:01.8]
And of course there was a million people. Immigrants went home during the pandemic, largely Eastern Europeans and didn't come back. A lot of them because we've made them wholly uncomfortable through the whole Brexit piece. So there's currently a million unfilled jobs in the UK job market, and then a load of capacity shortages because people are off long term sick from their jobs.
[26:25.8]
I think the government think they can, in the construction space can help solve that problem by being more productive by using mmc. But the problem is there's only a billion turnover of MMC capacity in the country. But if you add together all those programmes, it adds up to way more than a billion.
[26:44.2]
And a lot of the specialist supply chain are really quite small SMEs, as you say. So like in the prison space, the companies that actually build doors and windows for prisons, you can count on like one hand. So if you start to overheat them. So that category management per programme but across the space and the industrialization of MMC supply chain to meet it, if the programmes are real and the spend is real, is going to become quite acute, as in sort of mission critical for the country.
[27:15.6]
But we would never know unless we took an alliancing view and started to look at this stuff. So we're on the journey to solving the problems. I think the supply chain thing is really interesting, in terms of where government can go with it and where the primes go with it.
[27:35.9]
And the engagement, as you say, they've got to treat suppliers well, they've got to do a good research piece and category management of those suppliers. It kind of brings us on to some of the stumbling blocks around this. So you were alerting me to a new BSI PAAS standard in Terms of what primes have got to do around suppliers.
[27:53.2]
Yeah, so there's consultation currently on, PAAS, 2030, which is around, energy efficiency, or improves energy efficiency and existing, Existing dwellings.
[28:09.6]
And just, I mean it's out for consultation, but just, just looking through the requirements. I mean it's about 150 pages of very, detailed process, in terms of what the retrofit design should look like, what the retrofit installer must do, the various qualifications, etc.
[28:35.5]
Etc. And for the primes or tier ones that will be subcontracted, most of this work to specialists. I think the concern I'd have with the level of information required and the standards that will need to be maintained, I'm not, we need good standards of work and design.
[29:05.2]
But for retrofit of dwellings, you could, I mean, I could actually see that the whole process potentially, being quite a large proportion of the actual works being done in the dwellings in terms of compliance, the design, the testing, the accreditation, etc.
[29:27.6]
So I think, you know, for government, you know, you mentioned Brexit and we had this issue about, destroying 4,000 EU laws. Well, they want us out of EU laws.
[29:44.1]
I mean, it's, If this is an example of what is replacing that, then the bureaucracy in this past 2030, is going to be a huge problem.
[30:02.6]
I, for the price, but then for the SMEs and the very small contractors that have to prove, in huge detail their competence to do it.
[30:18.2]
And I can understand that Building Safety act in the wake of Grenfell, that people don't want to be caught by that, and what happens with that inquiry. But I think if government are looking for construction to really help with boosting the economy, the hoops, that people have to go through, looking at this consultation is going to be enormous.
[30:50.4]
And I've spoken, to a couple of the primes and they're concerned because one of them said they're not entirely sure that they even want to do the work because of the amount of paperwork and checking that they have to do and the checking on the checking.
[31:10.7]
So, I think that's one thing with government, you know, if there is going to be some changes in legislation and basically ripping up EU rules, and I think that's been roped back on a bit, then at least make it better.
[31:28.8]
I think the other thing is you've alluded to in the LinkedIn post was the certainty of the spend and construction is so susceptible to Changes in the economy. It's one of those with the highest instances of receivership or bankruptcy, unless there is that certainty.
[31:51.1]
I mean, we're even seeing now large programmes like HS2. Yeah. You know, whether you love it or hate it, there are going to be some people that are really struggling now with delays on that project.
[32:07.2]
Sure, the Tier 1s are suffered, but given, you know, in terms of an overall project value, the tier one's I don't know, probably 5 to 10% of the value of the project, 90, 95% is spent through supply chains and SMEs.
[32:28.3]
So this the certainty. And there was probably a lot of investment and a lot of R and D going into things like HS2. Is that all going to stop?
[32:42.3]
Sadly, I think the answer is yes. So, I mean, we're into an odd now. In reality, this government's, you know, real ability to get anything done now before an election that's meaningful is pretty slim and they haven't got the money to do it anyway because of the pandemic.
[33:04.8]
So, you know, whoever gets in next, it doesn't really matter, to be honest. They're not, they're not going to have the money to do things like HS2 and the gov. The current government have quite clearly kicked the can down the road a couple of years beyond the next election on purpose because they don't want to be seen to make that call as an example.
[33:24.9]
That's my personal opinion, but I don't think it's rocket science to deduce that. And we're not seeing spending commitments coming forward, you know, real robust, actual programmes with real money for the long term anywhere. Because we're in a bit of a state for lots of reasons, but Brexit's part of it.
[33:44.1]
So I, think we're, you know, the concept of alliances, the concept of at last decent aggregated procurements of programmes of work is fantastic to see. And whoever gets in next, I think, will need to take it forward.
[34:01.4]
Hopefully they're bright enough, to see that it's the way forward in terms of efficient delivery, real delivery, and hopefully it doesn't get rode back on and we end up in silly, you know, project by project, trying to demonstrate value for money on every package and every individual school's project, etc.
[34:19.1]
Like we've done for donkey's years. Because I've done loads of work before on, construction integrator concepts with my clients, contractors, where we've demonstrated we could make 20% capex savings on programmes by just give us 10 projects instead of one, and we can have a single programme team, have standard design, you know, standard components, category management, all kind of stuff.
[34:49.0]
Weights. Delivered a load of, police cells, for instance in the noughties for the Met police across, London and the south, did exactly that, saved the client 20% through that kind of standard thinking. But clients seem hell bent and no offence, Kev, but procurement people seem hell bent on demonstrating value for money on each individual project rather than a programme level and, it's a bit poisonous and well, we shouldn't and can't really carry on like that.
[35:17.8]
So hopefully we can see the move towards more programmes and certainly alliances as that model, leveraging these primes and tier ones, but hopefully finding a way to get innovators and disruptors involved as well.
[35:34.9]
Yeah, it is odd that this view that the supply chain has to be tended to death. It really isn't the case. There's nothing in EU legislation, there's nothing in the public contract regs, provided things are open and transparent, but on a programme basis and giving industry where it is.
[35:56.6]
And I'm, certainly not saying that every supply chain package should be a direct to war, because that would clearly be foolish. But where there is a need, for a direct deployment or a single tender action, then, you know, is permitted.
[36:18.8]
And as I say, I'm not promoting it on every scheme but, you know, for alliancing to work. And I'm clearing out a situation that we have with the demolition industry recently but for licence to work, those alliances through supply chains are crucially important because, you know, while you can get a number of tier ones to collaborate and, you know, form an alliance, the real kind of important stuff is in the tier 2, tier 3.
[36:53.4]
And the continuity of work and learning from one project to another is critical. Particularly as you mentioned before, you know, skill shortages, lack of labour etcetera, it's kind of unaffordable this.
[37:11.9]
Some of the tendering practises that some clients are insistent on, in fact in some tier ones insist on. Yeah, I mean ultimately the tier ones, as you see from yours, in terms of the hierarchy or pyramid of the construction supply chain, the tier, and are actually quite thin Most of their turnover is throughput to supply chain and so the real brains and thinking and the learning and the R and D, like you say, is generally in the supply chain, unless they're wholly owned volumetric with a factory kind of provider like a red 10, which is a really interesting environment because they do control almost everything in their own factories.
[37:58.3]
Quite a different take. Which perhaps can be learned from. Yeah, again, it's that built environment networking thing. It's all tier one and consultants, everybody that's there. I'm not seeing a lot of posts from supply chain, who are actually the people where the ideas come from and where the pain's felt.
[38:20.1]
Although there's a kind of odyssey around because key evidence of. Sorry. A lot of clients will employ, consultants to. To manage projects on their behalf, either project or cost management.
[38:39.4]
And the thing I can't comprehend is that most of the consultants that do that, they must be seeing where these good ideas are coming from. So there's a whole tranche there where you think, well, you know, we'll say that Tier 1s and Tier 2s and Tier 3s always recognise that there's a lot of practise, there's a lot of creativity from tier 2s, 3s, 4s.
[39:13.2]
But given, most clients do employ consultants. I'm not entirely sure why some of that actually isn't captured as much as it should be.
[39:28.5]
Well, some of the root cause is probably something I was reflecting on the other day, which is the whole remuneration model of the construction industry is set up for project delivery, not programmes or projects. So PM's QS is of the construction project.
[39:48.2]
If they deliver it as a more efficient programme, they'll get paid less, there's less activity, less for them to do, because they're only checking and balancing a standard design and then, you know, so the site stuff is all specific and times 10, but the designs once. You know, the manufacturing's once.
[40:05.4]
So, That's unhelpful. Most of the frameworks, including ccs, are set up as a percentage of the construction value. So they are remunerated and they're incentivized to create more projects.
[40:21.2]
Not a single programme that's. That's in effect got, you know, if it had a 20% less capex value, they're getting 20% less fee if it was a programme. So I think the difficult truth is no one's having this conversation, but no one's actually incentivized to be more efficient, are they?
[40:37.6]
No. Apart from maybe the contractors, maybe. But yeah, it's. I think that's probably a difficult truth that. No, I've never heard anyone raise. Actually, it's quite interesting being on the Outsiders as a consultant now. Maybe I'm not making any friends but you know, that's, that's the reality of the situation, isn't it?
[40:58.7]
If, if it aggregated it to the efficiency levels of the motor manufacturing industry in programmes, there'd be probably quite a lot of people out of a job. Although AI and all the onset of AI, chat, GTP and all that stuff will probably get us along that line anyway at some point.
[41:15.1]
But that's a whole different conversation. But yeah, it's interesting, isn't it? I'd only thought of that the other day, that we're not really incentivized to deliver more efficiently, are we? No, no. Unless it is repeat business. Yeah, repeat business.
[41:33.7]
You could probably offer a lower fee. Yeah. And of course as well, the other thing, like architects for instance, if they develop a standard design that's rolled out cookie cutter style, you know, like They only get paid once, don't they?
[41:50.0]
Yeah. So again, perhaps we're not incentivized to do it. So the government need to think about that and how perhaps they place the IP differently and reward the IP differently for creation of products. In effect, rather than, you know, every project be being a, you know, a new voyage of discovery.
[42:13.2]
Interesting. Okay, so what, what are you up to? So just in terms of sort of recounting then. So we've talked a lot about construction alliances. I think there's a lot for others to take from the concept of working perhaps in partnership with your competitors to shape propositions and solutions for clients.
[42:31.2]
Because you've all got strengths and weaknesses and whether the clients bring that together or not, it can be a sensible thing to do in certain markets where you're not big enough to be able to deliver it all yourself anyway. And so that whole collaboration piece. And bearing in mind in the construction industry, builders have tended to hate each other for years and years.
[42:51.8]
You know, be very competitive organisations. It's great to see the start of that journey of collaboration and taking the high road. And perhaps there's something to be taken from that in other industries. And I think that that efficiency play of looking to deliver greater value to clients through standard design, through looking carefully at supply chain and designing that carefully measuring what's the capacity carefully and building solutions perhaps together with your competitors in that space is probably interesting to most.
[43:26.5]
So thank you very much for that, Kevin. It's a really interesting topic that we'll watch with, great interest as it unfolds through whatever happens in the next couple of years with elections and recessions, or not, or wherever it goes, so what are you up to these days? What's exciting on your plate moving forward?
[43:43.1]
You were saying off camera that you're doing some stuff with government, but perhaps a bit of work with the private sector again wouldn't hurt. Yeah, at a fairly large commission, with the Met Police, that was FM Related.
[44:01.7]
So it was procurement of an integrator, interestingly. So the Met Introduced a model some years ago where they basically appoint an integrator, and enter into direct supply chain contracts with around 30 organisations.
[44:24.9]
So I was a direct contract with cleaners, for And E laundry, that kind of thing. So it's a different model they've adopted. It was interesting.
[44:40.1]
I mean that was done right through the pandemic where I was laughingly given papers so I could travel to see the client rather than doing everything over teams and zoom, which is okay.
[44:59.3]
But a bit of face to face meeting is quite useful.
[45:06.8]
A lot on five model business cases as well. So generally around procurement of construction works, or fm. So probably the last three years I've probably done more FM than construction.
[45:26.0]
And it's kind of interesting looking at that, particularly the Met model because you know they are using or going directly to the SMEs. Having said that, you know, the Met is a geographically quite a constrained area.
[45:44.5]
You know, getting around London's not that difficult but for the market that's probably not a bad thing. You've got local suppliers. It's a bit more difficult in construction where certainly tier ones tend to work out the whole country so they will need to get supply chains in particular locations.
[46:04.4]
Okay, Kevin, thank you very much for that conversation. That's really interesting insight. Thank you. I think it's obviously very valuable in the construction world and where we see things going. But also I think there's a lot people can take for other markets, both public sector and private sector facing in terms of an alliancing approach, collaboration and supply chain.
[46:24.3]
So, that's a really interesting conversation. Thank you very much for your time today and people can reach out to you on LinkedIn. Yeah, sure. All right, cheers. Jeremy.