About CEPP

1. Mission

‘to be the preferred consortium for Midlands housing clients for collaborative procurement unlocking the potential of the construction industry to deliver improved value for money and sustainability’

2. Objectives

• improve the efficiency and value for money of decent homes and other repairs, maintenance and construction programmes by an average of 20% by 2010
• grow to 20 the members across Midlands by 2008.
• achieve annual turnover level of £100m and total of £450m by 2010
• convert members existing contracts and processes to CEPP standards
• recover up to 1.5% of framework costs to pay for ongoing CEPP supplier procurement and development
• improve neighbourhoods and sustainable communities, for example by incorporating effective security and environmental works on estates and local training and employment initiatives.

3. Overview

Over £1 billion pa is to be invested in improving housing stock in the Midlands to decent homes standard by 2010.  Such a programme has the capability to deliver considerably better value as a coordinated programme than as stand-alone projects.  The Central England Procurement Partnership (CEPP) concept aims to assist Midlands housing clients to take advantage of advanced procurement and collaborative management practices to secure high and continuously improving value, both in the quality of the houses and in capital costs. CEPP brings together the main recent advances in procurement and construction processes to achieve cumulative advantages in the long-term Midlands housing improvement programme.

Jason Cannon, LHA Head of Property Services, said: “The members of the consortium are committed to change and bringing about, within our own organisations and the group, new methodologies and cultures which will deliver long term improvements. It’s all about adding value, reducing cost and improving performance.”

4. CEPP, A Midlands Centre of Excellence for Housing

CEPP is a Centre of Excellence where competing members in framework agreements cooperate to pool experience and development work for the sake of the overall programme. It is modelled on the Tesco ‘Centre of Excellence’ programme which has driven down the timescale and cost of new stores remarkably, whilst increasing store competitiveness.

CEPP is establishing framework agreements with selected contractors, consultants, and clusters of trade suppliers. The framework members will support the CEPP Centre of Excellence for their own benefit and to stay in the framework. There will be an Executive Director and a Delivery Team of the Centre of Excellence, responsible for procurement, keeper of performance data, training, enabling collective learning and improvement and setting benchmarks to become targets for subsequent projects.

Menu of cepp delivery team support services for clients 

CEPP has set up a small Delivery Team including experts from member organisations and external support to provide a range of services to help members deliver efficiency improvements.

The CEPP Approach

5. Target Cost Working with Modern Commercial Arrangements

We propose that each CEPP member uses TCW as its method. This approach is proven to reduce costs without compromising quality goals and is derived from successful use in other industries. The project objectives are shared with the selected team with the question: “This is the performance we want and these are the resources. How do we get there?” The resource target is drawn from benchmarks of previous similar work. Framework members are incentivised to contribute radical thinking by having their expected profit from the work protected even as they cut or eliminate their otherwise expected workload during the design workshops. The final, signed-off solution is then converted to a risk-transferred contract to be delivered, with pain/gain-sharing to help promote further cost reduction. The final outturn then becomes a new benchmark.

CEPP recommends a partnering style of contract, with project incentives for group problem solving and dispute avoidance. The customer is protected from exploitation by the open-book style of working needed and by the desire of all suppliers to remain in the programme.
 

6. The CEPP Process once Established

The flow of Planned and Response projects is proposed on this sequential basis:

• CEPP client members initiate a project, using CEPP Delivery Team advisors to establish the brief, feasibility and target cost
• The CEPP Delivery Team supports the client and works on a Target Cost basis, with open books, to reach the agreed value proposition. Risk is then transferred.
• Partner contactor and suppliers deliver schemes supplying project performance and cost feedback to the CEPP Centre of Excellence
• C of E keeper works to establish flow of projects and improve ‘leanness’ of the process

7. Development work to start

A funded development process is underway before the steady-state can emerge.

• The goals, players and programme are agreed
• The CEPP Centre of Excellence infrastructure is being established, with procurement of framework suppliers, ICT, knowledge management and training regimes.
• Organisations interested in participating are selected: clients and their existing partner contractors, advisors, suppliers. 
• CEPP Client Members are ‘converted’ through a programme of support & training to the CEPP model of best practice commercial arrangements and performance improvement.
• CEPP frameworks are established and a pool of partners appointed for delivering decent homes work to members.  Partners are chosen for comprehension, empathy and capability, and inducted into the programme
• CEPP specification catalogues will be devised for the initial stage, with plans for later development

8. CEPP Business Plan