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Sir Robert McAlpine, Morgan Sindall and Wates have all joined a ‘ground-breaking’ new framework devised by Legal & General’s retirement business Guild Living aimed at boosting construction quality and sharing risk.
The Guild Living Alliance Framework is designed to ensure
that key contractors, who will work together initially on Guild Living’s first four
developments in Bath, Epsom, Uxbridge and Walton-on-Thames, deliver schemes of
a higher quality while minimising delays, and ensure work is fair, transparent
and “dispute free”.
Legal & General said it wanted to overcome problems associated with traditional forms of procurement, which it said were “too often focused on achieving the lowest price for contracts and which see risks transferred between parties, rather than being shared”. Such an approach can lead to delays and disputes, with parties protecting their own interests rather than working in the best interests of the project as a whole, it warned.
The framework, which also involves architectural practice
Marchese Partners, has been facilitated by specialist construction consultancy
Cast and supported by law practice Eversheds Sutherland.
One of the key principles is to include contractors at an early stage of the design process, before architects have produced detailed designs. Under the framework, risks that can occur during the development process are assessed and allocated to the party who is best placed to manage them. Where no party is best placed to manage the risk, for example, in the event of a pandemic like covid-19, the risk is shared.
‘Fixed and appropriate’ margins
The framework also sets “fixed and appropriate” profit
margins from the outset, alongside a commitment to produce best value and a
consistent pipeline of work for all framework partners.
Meanwhile the framework aims to set higher standards on
health and safety and build quality, and a commitment to ensure that Guild
Living retirement communities are committed to net zero carbon emissions.
Phil Bayliss, CEO of later living at Legal & General and
chairman of Guild Living, said: “It’s time to change the way we contract to
build. This is about creating the right behaviours, investing in the future,
and seeking out efficiencies in the way we build and manage a major project. As
long-term investors it is vital that we’re able to embed principles in the way
we work with our supply chain partners that help us to achieve the highest
standards of delivery. This agreement aligns the interests of our partners in a
fair and transparent way and puts in place an exceptional team to deliver our
first four Guild Living schemes.”
Lilly Gallafent, director and chief operating officer of Cast, said: “Cast has been at the forefront of challenging the construction industry to ‘modernise or die’ since the business was founded in 2016. As part of that, we recognise that more innovative and collaborative approaches to procurement are a critical factor in breaking with the past and allowing supply chains to deliver in a more integrated way.
“We are thrilled to have been able to assist Guild Living in
realising their ambition to bring more fairness and transparency to the
procurement process. This Alliance will promote fresh thinking in both design
and delivery and increase the certainty of project outcomes across their
portfolio of unique and exciting later living projects.”
Paul Chandler, executive managing director of Wates
Construction Group, said: “We look forward to working with Guild Living,
aligning ourselves with other supply chain partners to deliver the best developments
possible and help foster a culture of collaboration and transparency between
Sean Bradley, managing director of Morgan Sindall
Construction’s London and Home Counties business, said: “This is an exciting
and innovative partnership model, which makes the most of the insight and
experience each contractor can bring to all stages of the development lifecycle
from design to delivery.”
Grant Findlay, director of business development and work
winning at Sir Robert McAlpine, said: “We applaud Legal & General and Guild
Living taking a leadership role in the development of a new approach to project
delivery in the commercial sector. We are delighted to be in partnership with
them and fellow contractors in this ground-breaking alliance.”