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The board included specific community benefit considerations in the procurement process for the new hospitals, requiring bidders to provide a method statement outlining how they would meet the following objectives:

Target 10% of total labour required to deliver the project (including those works delivered by specialists, or sub-contractors) to be delivered by new entrants, training and up-skilling of existing employees, assess and develop the capacity of Small-Medium Enterprises (SMEs)/ Social Enterprises

In addition, bidders were required to demonstrate how they would meet the bid requirements to:

Provide regular monitoring information (at least quarterly),

Develop Case Studies (at least quarterly),

Participate in Stakeholder Evaluation.

The above objectives were bid requirements, to be met by all bidders.

As part of the competitive dialogue process bidders were encouraged to liaise with key stakeholders in South West Glasgow and Glasgow City in developing their submissions and overall approach to the objectives outlined above. Therefore, bidders were able to outline an approach that best met their delivery model and demonstrates to the board how they would successfully meet the bid requirements.

The following quote from Brookfield is relevant:

Brookfield fully support the board''s Employability and Health Strategy which seeks to provide community benefit from procurement. As part of the proposals Brookfield and its supply chain, have committed to employing 10% of the workforce as new entrants. Brookfield have engaged a team, led by Rosh Campbell of Glasgow South West Regeneration Agency, to ensure that the company fulfils its promises in relation to Training and Recruitment, SME''s and Social Enterprises. Rosh will be supported by Glasgow City Council on SME''s and Community Enterprises in Strathclyde on Social Enterprises.

Brookfield is also committed to ensuring that local contractors are used wherever possible. Bathgate based Dunne Group are to undertake a package of work, circa £100 million, for the substructure and superstructure works.

Key supply chain partners for M&E, building envelope and partitions are all in place. These companies will be seeking to resource their works in Scotland and will provide opportunity for subcontractors to work with them or for directly employed local resources.

Currently Brookfield Construction does not directly employ staff in Scotland. This will change imminently with both directly employed and indirectly employed staff to be engaged in relation to the New South Glasgow Hospital Project. Brookfield Construction is not a mass builder and as such, unlike the other bidders, do not have significant UK resource to find work for. Whilst they have a core team (20 to 30 people) capable of delivering the project, a significant number of the Brookfield team will be employed locally creating long-term employment for those involved. The project will require in excess of 2,500 operatives at its peak. Brookfield, and their supply chain, have committed that 10% of these workers will be new entrants to employment.

The Brookfield bid comprised a world class team of well established subcontractors and consultants, a number of whom are based in Scotland such as civil and structural engineers WSP; landscape architects Gillespies, cost consultants Doig and Smith and Bathgate based Dunne Group who will carry out the sub and super structure works in a package worth circa £100 million.

The Brookfield Director on the project will be Glaswegian Ross Ballingall who left Scotland 12 years ago to pursue major healthcare projects. He has since spent the last 12 years successfully delivering healthcare projects throughout the UK.

The Cape Town branch office supports Nightingale Associates in the UK for a single, highly-specialised phase of the design stage on any project. The SA-based team has developed highly efficient practices for producing approximately 3% of the overall design workload, the rest being completed in the UK. This enables the UK offices to invest more on the work that essentially must be produced in the UK because of its interface with the construction activities.

This well tried approach allows Nightingale the maximum potential for developing a Scotland-based design team using locally-recruited architects who will work from a newly-established office in Glasgow to deliver the vast majority of the architectural work. Nightingale Associates has a history of working in Scotland, and are committed to using local staff and resources as appropriate to the needs of the project.

The firm is currently also working on other projects through the NHSScotland''s Frameworks Scotland initiative in collaboration with other Scottish-based architects and design team members and are committed to employing local resources particularly during the delivery stages of the design process.

It is a matter for Nightingale''s to respond directly to the article.

NHS Greater Glasgow and Clyde have put in place appropriate governance arrangements for such an important and complex project. The New South Glasgow Hospitals and Laboratory Project Executive Board (NSGHLPEB) has delegated authority to make executive decisions on critical points in the project programme. The role of the board is to oversee the overall progress of the project to ensure project objectives are achieved. The board meets monthly or more frequently depending upon the needs of the project and will report into the Acute Services Review Programme Board. It is accountable for the planning and delivery of all procurement, financial and technical measures required to deliver the identified investment and services that fall within the scope of the whole project. This will ensure there is appropriate progress on:

Procurement:

Procurement Plan and timetable,

Procurement Administration,

Bid evaluation process and administration,

Procurement budget control,

Risk Management,

Change control administration.

Finance:

Negotiating commercial issues,

Draft Contracts/Final Contracts,

Report on issues affecting affordability,

Examine financing proposals and make recommendations to the ASRPB,

Develop and report Value for Money (VfM) proposals,

Cost Control.

Technical:

Technical Output Specs,

Bid Evaluation Process,

Test technical viability of solutions,

All planning issues,

All changes to contract/design/specification,

Construction and Commissioning,

Financial Risk Management,

Adherence to Standing Financial Instructions.

From the outset, the importance of cost and programme was recognised by the board and their advisors and the selection of the procurement route and form of contract were based upon the ability to minimise the risks of over run. The form of contract being utilised; NEC 3 Option C, is an industry standard form which is promoted for use by the Office of Government Commerce and is also the main stay of NHSScotland''s Frameworks Scotland national construction framework.

The NEC3 Contract is centred on collaborative working practices, but also contains a maximum price within which the contractor must deliver the board''s requirements. This contract provides for an incentivised pain/gain share approach, whereby the performance of the contractor in many respects including time and cost is incentivised to deliver within cost and on time parameters. Management of the works is focused on programme delivery with a requirement on the contractor to provide detailed monthly updates and early warning notices on any cost or programme implications. Details of the NEC3 contract can be found at http://www.neccontract.com/

The treatment of risk in the project is also important and has been, and will continue to be, addressed and managed in several interconnected ways.

Overarching the process has been an active risk register that has highlighted and categorised risks to the scheme, provided owners for risks and noted actions and mitigation where relevant.

Regular Project Team meetings reviewed the risk register as a live management tool, as well as discussing, organising, planning and managing the procurement of the scheme, with the Project Team reporting into the overall management and governance structure put in place by the board as covered earlier.

Prior to issue of the tender package to bidders, and an aspect of the overall governance and risk review and assessment of the procurement, stringent validation of the readiness to go to market and assessment of the scheme by third parties was carried out and completed.

The procurement process and engagement with bidders addressed risk in the Competitive Dialogue period and up to bid submission in several ways, including:

Discussing and evolving risk registers with each bidder at the Commercial Dialogue as well as preparing a master risk register that identifies the owner (Board or Contractor) project risks (e.g. Planning, Ground Conditions etc);

Identification of responsibility for physical and technical matters (and therefore risks) through the Contract Data (Employer''s Requirements), and

Incorporation and identification of the rights and obligations of the parties in relation to risk included in the Contract.

As the project moves forwards into the design development and construction phase there are a number of activities that support proactive risk management of the process. These include:

The continuation of the governance structure established by the board to manage and oversee the project;

Separate, but parallel risk registers covering

- Board Retained Risk

- Contractor Risk.

Regular Project Team meetings, including review and updating the project risk registers;

The use of a contract and process that provides for an Early Warning approach to risk, this allows potential risks (of whatever nature) to be highlighted, tabled, discussed, managed and resolved by the parties which will either avoid their occurrence or manage and mitigate the event that has occurred;

The clarity provided with regard to the risk profile of both the Board and the Contractor due to the establishment and agreement of the risk registers relating to project risks (e.g. Planning, Ground Conditions etc);

A partnership approach, not only in the use of the Early Warning system, but in the establishment of a joint executive team to liaise and manage matters that are escalated;

Live monitoring and review of the construction programme as a management tool as a feature of the contract;

An incentivised contract with an established commercial position with regard to pain/gain mechanisms between the board and the contractor.

This arrangement provides for the contract to be awarded following evaluation of the bids which were submitted on 11 September 2009. Post contract award, concurrent activities of the contractor are commencing the design and build of the laboratories element of the project, whilst undertaking design development of the hospitals element of the project. The (design development) culminates in the full business case compilation and approvals (October/November 2010): this forming an essential gateway which must be achieved to allow the commencement of the construction of the new hospitals element of the project.

The terms of the contract awarded (including the overall target/maximum price for the works and programme dates and activity schedule milestones) are based on the preferred contractor''s final tender response at the end of the competitive dialogue process. As is noted above, specific gateway criteria (including necessary business case approvals) are incorporated into the design development, programme and activity schedule in the contract through to the commencement of construction of the adult and children''s hospital.

In 2008, the board considered the time and cost implications of the bidding market in its procurement strategy and considered that the route adopted should reflect the market requirements and the commercial drivers of bidding a scheme of this size, nature and type: this was supported by the market sounding and engagement process that took place with potential bidders during third quarter 2008.

In summary, the stages of the procurement can be summarised in outline as follows:

This contract is based on the standard template NEC3 “ Engineering and Construction Contract Option C Target Contract with Secondary Option Clauses as stated in Contract Data. Fuller details of this contract are available at http://www.neccontract.com/.

Brookfield have completed over 12 hospitals worldwide. Brookfield''s health personnel allocated to this project have been responsible for other significant health developments that include the new Norfolk and Norwich University Hospital, the Addenbrooke''s Hospital Elective Care Centre, the redevelopment of Colchester Hospital and extensions to the Stoke Mandeville Hospital.

Current projects in which Brookfield are involved currently is the completion of a state-of-the-art new 612 bed acute hospital in Peterborough worth £350 million. The acute hospital will be opened next year and is currently three months ahead of schedule, The Mental Health Unit and the City Care Centre, part of this PPP project, have both been completed on programme.

Globally Brookfield is delivering the design and construction of the $1.76 billion (AUS) Fiona Stanley Hospital at Murdoch, Australia. The 643-bed hospital includes acute and medical surgical services, cancer services, emergency department, paediatrics and radiology services. Completion is expected in late 2013.

The key supply chain involved in the South Glasgow project have been selected based largely upon their ability to deliver complex healthcare projects in a collaborative environment.

The evaluation of the bids was undertaken by a team with the appropriate skills, relevant knowledge and expertise to undertake the review and evaluation of technical and commercial submissions on a complex healthcare project. The board''s team comprised technical, legal, financial, clinical and non-clinical representatives with a total of 36 people being involved. The evaluation scoring of the bids was by consensus against compliance with the board''s requirements set out in their Invitation To Participate in Dialogue documentation.

Four groups undertook selective evaluation of each of the bids against the board''s requirements in the areas of:

Design

Logistics

Laboratories

Commercial.

The evaluation process was over viewed by the commercial team which acted in a governance capacity to ensure due process was complied with and scoring activities were applied fairly across all bids. The overall procurement process was overseen by the board''s head of procurement.