BUILDING OUR FUTURE: SCOTLAND'S SCHOOL ESTATE
2 KEY ISSUES
1. The starting point for developing the output specification is to be absolutely clear about the objectives for the project. These objectives should reflect the local authority's school estate management plan. This sets the purpose for the project and will be a useful framework in moving forward through the procurement stages.
2. Once the purpose of the project has been clearly established, the next stage is to develop a detailed project scope. This needs to define which schools will be included in the project, and what building and long term services are required.
Content - design, build, maintain
3. Before drafting the output specification, the local authority should have undertaken sufficient research and consultation to be able to confirm a clear scope of work for each school, agreed the project priorities, established in broad terms the facility and service standards to be achieved, and communicated these to all stakeholders. This level of shared understanding is essential for the development of an output specification which will accurately reflect essential requirements, identify scope for innovation and development, and allow the project team to make decisions which can deliver the optimum project outcome.
4. The accommodation requirements, including circulation space and external areas, will be the main driver for bidders in determining design, construction and facilities management proposals and costs. It is essential to start from a strategic perspective, rather than base accommodation requirements on the existing levels of space and patterns of use in project schools.
5. The local authority should consider the use of each space in detail covering issues such as, the range of activities taking place, the type and number of users, and the patterns and hours of use. As far as possible, this should also identify how the requirements might change over the life of the contract. The accommodation requirements should also identify relative priorities within each space, and any potential for shared use of space.
6. The accommodation requirements should also include information about the preferred location and relative adjacencies of spaces, for example to support linked learning and teaching, facilitate internal management, or address differing access arrangements of various user groups. This might be illustrated in a diagram and included as an exemplar in the output specification.
7. Where appropriate, the output specification should include an explanation of the reasoning behind the accommodation requirements, for example, outlining how curriculum analysis or capacity assessments were arrived at. This will assist bidders in taking an innovative approach to space planning.
8. If there are specific requirements for some spaces, such as the minimum size of a practical subject classroom, these should be stated in the room data sheets.
9. While many accommodation requirements are relatively easy to describe, some aspects are more difficult to quantify, and it is important for the local authority to highlight these issues in the output specification. Bidders should be requested to demonstrate how they would address the issues in their proposals and the output specification should set out the criteria which will be used in the assessment of the bids.
Architectural design quality
10. The quality of the design will be a key factor in ensuring that the local authority's objectives are fully delivered over the life of the project. The designs of new or refurbished schools need to take account of potential developments in education, and other services that might be delivered through schools. It is essential that the vision for the school, and how this relates to design quality, can be communicated within the output specification: this is most commonly covered within the output specification as part of a design quality statement.
11. Internal design workshops involving a range of stakeholders can be useful in promoting the importance of design in the project. The output from this type of workshop can help in the development of clarity and vision in the design briefs and can be provided as supplementary information to the output specification. A well developed statement regarding architectural quality, with stakeholder consensus, will encourage rather than restrict the quality and innovation of bidding consortia later down the line.
12. The factors contributing to sustainable design are wide ranging and can help to inform the whole procurement and design process: defining need, investigating options, design and specification, evaluation of bids, and management of facilities along ecologically sound principles throughout the duration of the contract. The Office for Government Commerce (OGC) has produced guidance on Green Public Private Partnerships3 which describes the steps which are needed to include environmental considerations within PPP projects.
13. The Output Specification should set out the local authority's requirements regarding sustainability issues, highlighting specific areas where bidders are expected to demonstrate good practice. A number of design issues, such as the orientation of new buildings, and the use of natural light and ventilation, can deliver a better educational environment as well as contribute to lower running costs. In PPP contracts, the long-term view and life cycle should be taken into consideration at the inception stage and there are significant benefits to the local authority to place such requirements on the bidders.
Flexibility for future use
14. Adaptability to change is an essential factor in being able to sustain value for money over the lifetime of an educational facility. While the new school building will meet the specific requirements of the current education service, equally important will be its ability to adapt economically over time to changes in, for example, the curriculum, the pupil roll, the school timetable, class and group size, technology, the level of community use, early years services, the delivery of multi-agency services through the school, and so on.
15. In order to achieve the optimum value for money, local authorities should attempt to identify and quantify as best they can the specific extent to which future flexibility is likely to be required in their new schools, and to describe these possible scenarios in the output specification.
16. Providing an accessible environment for school building users requires more than access for those with physical disabilities. While reference is likely to be made to the local authority's accessibility strategy and any Disability Discrimination Act audit information contained in the data room, it is unlikely that bidders will be able to anticipate from this alone what the specific requirements and priorities of individual schools will be. Local authorities should therefore highlight specific issues in the output specification, such as the particular requirements of those with hearing or visual impairments or of students with social, emotional and behavioural difficulties, and request that bidders demonstrate how they would address these issues in their bid proposals.
External environment and school grounds
17. School grounds can be an important resource providing opportunities for both formal and informal learning and for both curricular and extra curricular activities. It is important to ensure that bidders recognise that the external environment requires similar care to the internal environment in terms of the facilities available and the quality of finishes provided. External spaces should not be considered in isolation, and the relationship of external spaces to internal spaces, and to patterns of circulation, should be included in design concepts. To emphasise this, room data sheets, scheduled areas and spatial relationship diagrams could also be used to describe the external environment.
18. Early consultation with stakeholders and advice from specialists such as Grounds for Learning 4 can stimulate imaginative approaches and assist in being more specific in highlighting the local authority's requirements in the output specification.
Reference scheme and design exemplars
19. Local authorities should set out to achieve real design competition between bidders, requiring them to submit robust, well considered design solutions which are project specific. The primary purpose of a reference scheme is to establish a quality benchmark which communicates the level of design aspiration and, from this, to build up a realistic cost model. A reference scheme is an illustration of a potential solution: it is not a template, but should act as a catalyst for similarly innovative approaches by bidders. A reference scheme can be used to illustrate the overall character and impact of the building. It also demonstrates the local authority's commitment to procure inspiring design.
20. In addition to full reference schemes, the local authority may wish to reference design exemplars to illustrate general or specialist requirements and to amplify particular aspects of the output specification. Examples may include architectural plans or layouts, room relationship diagrams and room layout diagrams.
21. Local authorities may also undertake pre-ITN design work to assist in dealing with outline planning permission, to inform stakeholder discussion, to test the feasibility of challenging sites, and to test alternative strategies.
22. Careful consideration should be given to the way in which reference schemes or design exemplars are likely to be interpreted by bidders, and the output specification should be explicit about the extent to which they are expected to influence bidders' proposals.
New build and refurbishment
23. The local authority should have carried out an option appraisal for the project based on a range of scenarios, options and priorities for the schools. 5 This will have investigated the costs and benefits of adopting the different options including the do-nothing option, and will have resulted in the choosing of a preferred option for each school.
24. The output specification should be sufficiently flexible to enable the bidders to evaluate for themselves the best method to deliver the local authority's requirements and to demonstrate any alternative approaches through innovation which may emerge after considering in more detail, the risks, whole lifecycle costs, site constraints and best value. These considerations will also encompass the variations between new build, refurbishment and combined new build/refurbishment proposals.
Standard and variant bids
25. The main bid responses to the ITN will be based on the local authority's preferred option - usually referred to as the standard bid. Local authorities may also wish to invite alternative proposals through the process of variant bids. There is a resource implication - in time and costs - for both bidders and the local authority in dealing with mandatory variant bids and the local authority needs to be sure there are clear benefits in seeking any variants.
26. The local authority may also invite bidders to submit non-mandatory variant bids. The requirement for these may be proposed by the local authority, or left open for bidders to propose alternatives.
Hours of use
27. The number of days and hours when the local authority and the wider community will require access to the project schools should be carefully considered during the development of the output specification. These will have a major impact on the design, functional relationships and use of the spaces, as well as the unitary charge. They will impact on access, security, zoning and services arrangements. Consideration should also be given to how changes in the future might impact on the hours of use and future operation of the schools.
28. Some parts of the school will be used outside school hours, and appropriate allowance should be made for community use, also taking account of future potential requirements. The local authority may also propose that the consortium should be able to make the school available to third parties, for example, allowing local clubs to hire sports facilities, provided that this does not impact on the service to the local authority.
29. The local authority needs to assess critical elements of the project which have a significant impact on successful delivery, such as school relocation, merger and catchment area change. If these issues are not fully addressed before the project goes to market, there is a significant risk that the scope and programme may have to be adjusted during the procurement or that elements of the project are included in the contract on a contingency basis. Both of these situations is likely to involve additional time and cost for the local authority and bidders. It is therefore essential that these issues are identified and managed closely from the start of the project, and that the risks are addressed in developing the output specification and ITN documentation.
30. Appropriate allocation of risk between the local authorities and consortium is an essential element of a PPP project. The local authority should identify risks and responsibilities at the option appraisal stage: this might be done through a range of mechanisms, such as a risk workshop with stakeholders.
31. The local authority needs to ensure that the risk allocation in the financial model is accurately translated into the output specification. Risk issues will feature heavily in contract negotiations and local authorities may wish to take specialist advice and consult with their external advisors. They should also refer to guidance such as The Green Book.6
32. The local authority will need to consider which risks it will retain, and which should fall to the consortium. In doing so, it will need to assess the costs associated with each risk and who is best placed to manage the risk. In some cases the allocation of risk may be quite detailed, for example, the local authority may take responsibility for vandalism to school buildings during school hours when it can maintain management control, with risk during other hours falling to the consortium.
33. Care is required in drafting the output specification in order to transfer risk without incurring a disproportionate cost penalty. For example, where a local authority is proposing refurbishment of existing school buildings, some survey information about the condition of the buildings, such as the presence of asbestos, may not be available. In this case, it is likely that bidders would be unhappy about taking on the risk, and would cost their proposals accordingly. To manage this, the local authority should make clear in the output specification that the full risk would not be passed over until the successful bidder had carried out a full survey during the construction phase.
34. In some areas, it may be difficult for the local authority to determine whether risk should be retained. This could be tested through a mandatory variant bid. For example, where school rolls are forecast to change during the life of the contract, the local authority might consider asking bidders to price an option for accepting the risk of future reconfiguring. The extra cost for asking the contractor to take on this risk could then be compared with the standard bid and the risk premium be quantified and evaluated.
Interface issues for FM services
35. In many cases, the ability of the facilities management contractor to deliver a service will be closely related to the operational management practices of the school. For example, out of hours access arrangements for school staff are likely to have an impact on the security responsibilities of the contractor. The local authority should identify where there are likely to be operational interface issues between the two organisations and ensure that the output specification describes the necessary arrangements adequately. The local authority must also recognise the related requirements in the Staffing Protocol, 7 Scottish Trades Union Council (STUC) guidance.
36. The project must be affordable and deliver value for money for the local authority. A detailed assessment of the project's affordability for the local authority, through the preparation and development of a shadow financial model, should have been carried out as part of the work to develop the outline business case. This model should have included an estimate of all the project costs, including the development, design and construction costs, the annual operating costs, the whole life cycle maintenance costs, and risk transfer costs. It should also take account of all the associated funding, such as the existing local authority revenue budgets to be transferred to the project, level playing field support, any capital receipts and other funding contributions to the project.
37. The shadow model should be reviewed and updated as necessary throughout the project to maintain an accurate reflection of the current project's affordability. This should take account of any changes and refinements made to the project scope, programme and other assumptions made in terms of costs and funding. In particular, it is important that there is a robust relationship between the expected performance standards in the output specification and the cost assumptions in the shadow financial model. Where affordability becomes a challenging issue, the local authority needs to be clear about its priorities and strike a balance between content, specification and affordability.
38. The project will be delivered in partnership with the successful bidder. The output specification is not an end in itself but the beginning of implementation of the project. In developing the output specification it is important to consider who might be interested in delivering the project and whether factors such as timing or detailed content might be adjusted to maximise the prospects of high quality bids. Early market consultation provides the opportunity to explore whether the project is viable and realistic and to gain an understanding of the market. An on-going dialogue with potential bidders will help the local authority to refine the project scope and provide confidence that the project will attract a positive response from the market when the ITN is issued.
Communicating a clear output specification
39. When drafting the output specification, it is important for the project team to establish and agree a set of terms and descriptions from the outset, so that a degree of consistency is developed throughout the text of the document. This will make cross referencing items within the output specification much easier for the local authority in their development of the document. It will also facilitate bidders in their understanding and analysis of the document which is likely to lead to fewer requests for clarification.
40. The local authority's project team must take care in the extent of changes allowed to the output specification after it has been issued in the ITN. It is important to retain bidders' confidence in the project, and changes post-ITN will have more serious cost and time implications as bidders will need to re-model their proposals. If changes are required, these must be consistently applied across all project documentation.
Inputs and outputs
41. It is a key feature of the output specification that the local authority's requirements should be presented, wherever possible, in output terms - focusing on the desired end result rather than the process or means by which this is achieved. It addresses 'what' has to be provided in a service rather than 'how'. Outputs for schools are therefore based on the service, such as education or community health, rather than the infrastructure or facility needed to meet this goal. Defining outputs requires a degree of creative insight and looking ahead. The optimum balance should be sought between being too vague in stating an output and in being too prescriptive or input-focused. Once the outputs are decided, the bidder's task is to determine the inputs required, including infrastructure and skills, to achieve this end result.
42. Ideally, all aspects of the client's requirements should be framed in terms of outputs - the services to be provided. However, both bidders and clients have noted that it can be advantageous to frame some aspects of the output specification in terms of inputs, for example, specific layouts for practical classrooms, which have been refined through local authority experience and meet the current and anticipated future needs well, might be specified.
43. If the project includes a number of separate school developments, the output specification will have to clarify requirements that are common across the project, and those that are specific to an individual school. These individual requirement are likely to be influenced by local need or other specific factors, such as the layout of the site.
44. These variations will need to be reflected in the output specification: one way of doing this is to set out the common requirements and provide as appendices separate school-specific schedules detailing the extra-ordinary requirements. This approach should minimise unnecessary repetition and reduce the risk of misinterpretation arising from omissions.
45. The local authority needs to clearly define required performance standards for facilities and services. Such standards may be developed from the local authority's policies, formal and informal standards, benchmarks and good practice.
46. Standards need to be carefully referenced where there is some choice, for example, how widely to implement current standards to pre-existing buildings; where specific facilities and services to meet statutory requirements will be influenced by local management arrangements, for example on workplace regulations; and where the standard is to be exceeded. The output specification should clarify the local authority's requirements to minimise the risk of misinterpretation and possible over or under provision of facilities and services.
47. Providing bidders with access to well organised, relevant background information will support the development of good quality bids. A data room containing relevant information, such as data on the existing school estate, education and other service policies, title information, site and floor plans, investigative surveys, maintenance data, and details of existing contracts, should be set up. Some of this information may be provided in hard copy, but it may be helpful to create an on-line resource that will allow bidders access from remote locations.
Operational aspects for schools during the construction phase
48. The local authority should consider the impact of the project on the existing school estate, for example how the impact of construction activities or a move to a new building will be managed. The local authority must decide which transitional elements should be delivered by the private sector partner and set this out clearly in the output specification.
49. The authority should consider the proposed services commencement date for the PPP project and establish whether all its schools need to be available simultaneously. In the case of a phased services commencement, where school projects are completed as part of an overall programme, the authority may wish the consortium to start taking on some or all the facilities management responsibilities for the existing project schools after financial close or from the first interim services commencement date, prior to refurbishment or remodelling. This agreement is often termed an 'interim services period' and, as the contractor is unlikely to be able to meet the full facility and service requirements until the initial capital work is complete, the arrangements will have to be carefully set out in the output specification. In new build projects it may be necessary to construct the school on the playing fields and to complete the sports and external works thereafter. Interim services would be delivered up to full services commencement.
A good output specification should:
1. make clear the local authority's objectives
2. reflect the requirements of the school communities
3. be clear, concise and unambiguous
4. give bidders sufficient information to decide and cost the facilities and services they will offer
5. identify those service areas which are most critical and will be given most weight in the payment structure and performance monitoring
6. highlight any constraints which are essential to defining a deliverable project
7. accommodate the need for compliance with statutory requirements and policies
8. ensure coordination between design, operation and lifecycle
9. permit contractors proposals to be evaluated against defined criteria
10. only contain requirements that can be afforded and are deliverable