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DINAH MOHD JERAN 09011582 Southmead Hospital in Bristol, United Kingdom 1.

Project Profile

1.1 Background From the historical development, Bristol health specialist services are scattered over 4 sites in the greater Bristol area which are Frenchay Hospital, Southmead Hospital, The Bristol Royal Infirmary and Weston General Hospital. The objective of the distribution of these services turned out ineffective to patient, difficulty in distance, limited services and dissatisfaction of hospitality. Moreover, the lack of coherent and concentration in providing the best services resulting the healthcares to be inefficient and ineffective in value for money. Thus, it is clearly shows that 4 separated healthcares services do not benefit sustainability in a long term time and that makes the North Bristol NHS Trust to focus on a new healthcare with better facilities, complete services and good value for money. At the beginning of the discussion, there were two options of site that been proposed; Frenchay Hospital and Southmead Hospital. The proposal came out with a redevelopment project of Southmead Hospital by acute the services at Southmead and Frenchay hospitals on to a single acute site at Southmead. A thorough site analysis and business case of Southmead Hospital had been made to achieve a successful healthcare project. The issues of the current Southmead Hospital are (i) poor configuration of services on site, (ii) poor access for patients, (iii) poor environment, (iv) difficulty in responding to Regional and National Requirements.

DINAH MOHD JERAN 09011582 1.2 Objective The objectives of the project are (i) concentrate acute and specialist services in North Bristol and South Gloucestershire on a single site and improve the safety and sustainability of care, (ii) improve the efficiency and effectiveness of services by harmonising primary care, social care and local hospital services to avoid gaps in provision, delays and duplication of effort, (iii) improve accessibility of care to patients and reduce the amount of unnecessary journeys, (iv) improve the very poor patient environment and working conditions in the old hospitals and provide buildings fit for purpose, (v) contribute to neighbourhood renewal and regeneration.

1.3 Proposal Redevelopment of Southmead Hospital is a large project of North Bristol NHS Trust with 115,000m2 size area of 7 floors building in the northern suburbs of Bristol, England. North Bristol NHS Trust is working with Carillion with the PFI procurement of 430million project for 30 years concession period. The project covers 6 departments zoning according to their use of over time, 800 acute beds with 75% of single room, 28 operating theatre suites, extensive demolitions, 2 multi-storey car parks, advanced technology of medical equipments, concourse with retail shops and restaurant, helipad and most importantly the sustainable design of both building design and landscape layout. The main construction started at 2010 and expected to be completed at 2015.

2. Procurement 2.1 Procurement strategy Procurement is the acquisition of materials, supplies, services that a company or project requires in order achieving a successful operation of project. Procurement strategy is an approach of cost-effectively in purchasing supplies, consideration of procurement time line, project risk, constraint and the funding and budget. To develop an effective procurement strategy, it is necessary to sit down to assess the details of the project task. These details will include the projects objectives, the resources of supplies, budget and timeline. All these tasks will be carried out by a group of team that responsible in establish the project goals and make sure the plan is well structured and agreed by others. Hence, procurement strategy is discussed conducted at the very early stage; business case and maintained throughout the project life cycle. 2

DINAH MOHD JERAN 09011582 From the OGC Achieving Excellence Guide 6 shows procurement strategy requires (i) key objectives of the project, (ii) constraint of the project, (iii) funding mechanism and (iv) risk allocation. Two main objectives of redevelopment of Southmead Hospital are to modernise health services and hospital facilities in Bristol, North Somerset and South Gloucestershire and to get an absolute sustainable healthcare. The aim is to produce a low energy consumption healthcare that being realized by having a sustainable building design that considers wind and sun direction, in term of material used, maximize the usage of natural breeze and lighting, proposed green travel surrounds the hospital outside area and sustainable in value for money. On the other hand, constraints occur when the construction started to commence. Major challenge has to do with the fact that the new building is going to be built in the same location as the existing hospital. The difficult part is the existing hospital must continue operate while construction is ongoing. Constraints in terms of temporary transfer of departments and traffic at the Dorian Way since it is proposed to be the main route for construction deliveries and at the same time it is the everyday route for staff used. Another challenge is the noise and air quality impact to the neighbourhood. Since the site is surrounded by housing area, the noise and air pollution are hard to mitigate. However, these two issues are a short term constraint and can be mitigated with hours of operations, off-site manufacture and good neighbourly practices. In terms of funding mechanism, the project is a PPP basis with a collaboration of North Bristol NHS Trust and PFI scheme from Carillion. Below is the PPP distribution of the project.

Building Southmead PFI Acute Southmead Trust Residual Estate

Hard FM PFI

Soft FM Trust

IT Trust

Equipment PFI/Trust

Enabling Trust

PFI

Trust

Trust

Trust

NA

The risk allocation has been assessed from the earlier stages which is at the business case phase and it is provided by the appointment business case (ABC).The risk assessment is a thorough analysis of the procurement project life cycle and it is a crucial task to obtain a successful project.

DINAH MOHD JERAN 09011582 2.11 Procurement project life cycle: Business Case The OGC Achieving Excellence Guide 3 indicates the business case process requires 2 gateways; (i) Gateway 0 Strategic Assessment, (ii) Gateway 1 Business Justification.

SRO, PS, ICA, Stakeholders,VM, RM

Project evaluation

Possible need for project raised

Identify business case

Gateway 0 Strategic assessment

VM, RM

Prepare estimates (whole-life cost)

Project evaluation Set budget

Option to meet business needconfirm project required

Prepare high level business case (SOC)

Gateway 1 Business justification

The redevelopment of Southmead Hospital project begins with establishes an Appointment Business Case (ABC) between North Bristol NHS Trust (SRO), Advisor of the Projects (ICA&PS), Patient Involvement Group (PIG) and Project Board as the stakeholders. These ABC starts discussing the clients needs, objectives of the project and raised every possible issue that should be evaluated for achieving the best and effective business case. However, there is an outline called the Outline Business Case (OBC) that had been set up for the project. This Outline Business Case (OBC) was prepared by North Bristol Trust, South Gloucestershire PCT and Bristol North PCT and was approved by the Department of Health in February 2007. Due to this, the ABC execution business case plan must refer to the OBC in making any changes. Basically the OBC plan is fair enough for the project, but there are few issues and changes due circumstances. Reanalysis and reassessment of OBC scheme makes the ABC changes the number of bed provided for the hospital. The reason of the change in OBC is because an increase in growth assumptions by the Office of National Statistics. 4

DINAH MOHD JERAN 09011582 The implication that ABC made is reducing the number of bed in certain rooms. The intention is to achieve the project objective which is to control the average length of patients stay in the hospital and increases in daycase rates. The delivering of this objective obtains the aim to treat and assess patients within 18weeks. Other positive effect of this change is; by reducing the bed number, the hospital would have to decrease the number of warded patient and overcome it with applied the effective services and advanced technology equipments on day time treatment which consequently increase the business profit. Moreover, it also benefits in economy sectors by giving job opportunities to local people. Thus, this change introduced to a far more value for money procurement strategy. Before accomplish the Gateway 0 Strategic Assessment of OGC Guide, the ABC objectives is been reappraised in line with the ambitions in this SHA strategic framework and finally ABC gets a firm and effective project evaluation. The next step is ABC makes evaluation on value management, risk management, estimates the whole-life cost and set budget of the business case scheme. The ABC check on the options to meet business needs by evaluate the value for the case and point out risks by having a risk assessment schedule that prepared by an expert from ABC and eliminate the risks to achieve business needs. ABC prepares estimation for whole-life cost of the project and refers it with the OBC estimation whole-life cost. At this point, ABC analyses the rough financial context to get the picture of funding method. The ABC also makes the finance term that based on a bank deal in the current market to get the clear financial budget of the project. From overall analysis, ABC spots risks in finance situation and take action of it. Finally, the assessment of the business case will come out with a high level business case called as Strategic Outline Case (SRO) and it is done with Gateway 1 Business Justification. 2.2 Procurement route Procurement route is how the procurement strategy being delivered. It includes funding method and contract strategy that best meet the clients needs. An integrated procurement route ensures that design, construction, operation and maintenance are considered as a whole; it also ensures that the delivery teamwork together as an integrated project team. North Bristol NHS Trust is redeveloping a 430million PFI project on Southmead Hospital. This is one of the first health PFI schemes to use competitive dialogue. This project is also one of the first to apply HM Treasury and DoH guidance on a post 5

DINAH MOHD JERAN 09011582 preferred bidder funding competition with the use of shadow funder due diligence advisors to advise on funder issues for an ultimate funder during the competitive dialogue process. The project also involves complex phasing arrangements, a constrained site and the refurbishment of a number of existing/historic buildings across the site.

2.21 Procurement and Contract strategies Competitive Dialogue

According to the OGC Guide 6, procurement goes up to 2 gateways which are Gateway 2 - Procurement Strategy and Gateway 3 Investment Decision. Gateway 2 requires (i) prepare OBC, (ii) determine procurement route, (iii) produce output based specification, and (iv) criteria for selection and award. Carry on to gateway 3, (i) competitive tendering leading to contract award for integrated supply team: Full Business Case. The redevelopment of Southmead Hospital project had made the discussion and assessment regarding the OBC and determining the procurement route at the funding PFI phase in the Gateway 1 - Business Case. Then it goes to North Bristol NHS Trust developed strategy that has included (i) preparation of documentation, (ii) detailed design specifications, (iii) open process with bidders, (iv) mandatory requirements for funding competition, and (v) a 3:2:1 process of bidding. These strategies cover the third and forth process in gateway 2 which are the produce output documentation and criteria of award selection. Proceed to the next process which is in gateway 3, the project flows to open tender and select the preferred bidders for next competitive dialogue bidding. The strategy is having three bidders with interims and eliminates one at the early stage of open dialogue. The two most preferred bidder of redevelopment of Southmead Hospital project are Carillion and Skanska. Carillion and Skanska have to go through competitive dialogues, interim evaluation that comprises (i) compliance checks for overall response to the deliverables, (ii) evaluation and scoring of bids, (iii) financial analysis, and (iv) value for money assessment and final presentation with client; North Bristol NHS Trust and stakeholders. North Bristol NHS Trust count up and combines the bidders score and presents it to the Project Board as a rating for each bidder with explanatory reports covering each subject. The Project Board reviewed the ratings, explored the rationale for the scores with the individual project leads and arrived at a recommendation for the Trust Board. The Trust Board will review this recommendation and decide on a bidder it is minded to appoint. all in all the ompetitive dialogue method is one way

DINAH MOHD JERAN 09011582 In having a quality and value for money for a big project like redevelopment of Southmead Hospital project

Conclusion In summary, the redevelopment of Southmead Hospital project is evaluated to be highly satisfactory. The procurement for this project most likely procured in accordance to the procurement guideline of the OGC Achieving Excellence Guide. The ABC really made a thorough analysis and assessment on business case. The reassessment and changes made in some parts like number of bed, clinical strategy, change programme, workforce and specialist services benefit in value for money. It also gives the better quality of the project and saves in cost. The thorough analysis in business case advantaged the hospital in long term time. On the other hand, it is so much easier for competitive dialogue process to have the OGC Achieving Excellence Guide to refer to. By having the OGC Achieving Excellence Guide, it automatically saves in time and gets proper strategy in bidding process which results in best quality of preferred bidder. Another advantage of using competitive dialogue is the project can choose which proposal is better in quality, time, cost and worth in value for money. Overall, the OGC Achieving Excellence Guide makes it a very useful guide to refer by any other project. The OGC Achieving Excellence Guide guide the redevelopment of Southmead Hospital to an efficient and effective project plan in achieving the business objectives and needs.

DINAH MOHD JERAN 09011582 References

Books and Reports Fewings P (2010); Construction Project Management: an integrated approach, Taylor & Francis. Turner A (1997); Building Procurement, Macmillan Press. Office of Government Commerce (2007), Achieving Excellence in Construction Procurement Guide 3: Project procurement lifecycle the integrated process, Project Procurement Lifecycle and 6: Procurement and Contract Strategies, OGC London, accessible from OGC archive and module website on Blackboard North Bristol NHS Trust (2008), Executive Summary, (available from online: http://www.sglos-pct.nhs.uk/Agenda300708/6-1-NBT-Business-Case-appendix-2.pdf) Carillion (2009), Southmead Hospital Redevelopment Project: Environmental Statement: Non Technical Summary, (available from online: http://e2edocs.bristol.gov.uk/WAM/doc/Report533378.pdf?extension=.pdf&id=533378&appid=&location=VOLUME1&contentType=appli cation/pdf&pageCount=1)

Article North Bristol NHS Trust, Frequently Asked Questions, (available from online: http://www.superhospitalforbristol.nhs.uk/Questions.php) North Bristol NHS Trust, Healthcare In Bristol, (available from online: http://www.superhospitalforbristol.nhs.uk/Hospital.php) Bevan Brittan, Health Projects, (available from online: http://www.bevanbrittan.com/services/constructionengineering/Pages/healthprojects.aspx) Government online, Private Patient Unit at Southmead Hospital, (available from online: http://www.government-online.net/private-patient-unit-at-southmead-hospital-bristol/) Staff writer, How to do things: How to Develop an Effective Procurement Strategy (available from online: http://www.howtodothings.com/business/how-to-develop-aneffective-procurement-strategy) 8

DINAH MOHD JERAN 09011582 Appendices

SRO Senior Responsible Owner ICA Independent Client Advisor PS Project Sponsor VM Value Management RM Risk Management SOC Strategic Outline Case PIG Patient Involvement Group ABC Appointment Business Case OBC Outline Business Case