The Construction Playbook: MMC, procurement & practical tips

The Construction Playbook, recently published by the Government in December 2020, states that it is a "compact" between government and industry to set out how the two will work together. Here are the highlights and on the focus on MMC, procurement and our tips on the impact it may have on you.

A focus on MMC

One of the key objectives within the Playbook is to drive innovation and MMC. In fact, there is now a presumption in favour of the use of offsite construction.

With regards to MMC, contracting authorities will need to collaborate to promote platform solutions that enable interoperability of components. In essence "aggregating and standardising products" is a key part of this is so that everyone is able to understand a common language. This facilitates ease of use of products/systems across a number of sectors (hospitals, schools etc). This also promotes the development of stronger supply chains to deliver designs based on platform approaches.

Another nugget within the Playbook is its candid reference to the use of standard form contracts such as NEC3 or NEC4, JCT 2016, PPC2000/TAC-1 and FAC-1, alongside the use of IPA and CCS model clauses. Other contracts can be used but compliance with the Playbook will need to be addressed in relevant governance/approval processes.

What’s great however is that the Playbook also advocates the pragmatic "stress-testing" and "peer-reviewing" of contracts. This is to ensure that the contract promotes innovation, sustainable supply chains and investment in MMC. This signifies that contracts are a "tool" to achieve certain goals, and so their functionality ought to be interrogated prior to use.

The Playbook highlights the importance of using the correct "commercial" approach. This it says is linked to the delivery model, the desired outcomes and type of relationship you have with the supply chain. Commercial approach in respect of the works in question, will in turn affect the procurement procedure and contracting strategy. The Playbook very much embeds the contractual "tool" in the very practical-commercial contracting world.  This applies not just for public sector projects, but is so very relevant to any type of contracting including within private sector development pipelines.

Procurement

In respect of procurement, the aim of the Playbook is to create a contracting environment that delivers a sustainable, resilient and effective relationship between contracting authorities and the supply chain, focused on outcomes, and that creates long-term value for all.  Some of the 14 key policies set out within the Playbook are clearly intended to prioritise this aim and have particular significance to MMC.

For example, the obligation to prepare, maintain and publish commercial pipelines is intended to enable suppliers to understand likely future demand and provide insight into Government priorities, such as MMC.  Similarly, the intention behind the obligation to engage in portfolios and longer term contracting is to give the construction industry confidence to invest in new technologies, such as MMC, and ultimately therefore to improve productivity and efficiency.

Summary

Overall, the Playbook provides welcome focus on long term sustainability and innovation within procurement, with particular emphasis being placed on improving quality, risk allocation and collaboration across the entire supply chain.

We will watch carefully to see the extent to which the aims and ethos of the Playbook will be implemented, and the extent to which this will have a positive impact on public procurement in the construction industry, particularly in light of the extensive reforms proposed in the recently published Green Paper on Transforming Public Procurement.