Procurement Efficiencies: Monitoring and Evaluation of Devanha Phase 2

9 Quality and Standards

9.1 Annual data capture forms, workshops and interviews were used to collect data and explore the issues of housing and quality standards. The data forms from 45 projects were received and included information on SAP ratings, mix of housing type, brownfield or greenfield status, approaches to Modern Methods of Construction (MMC) and use of Renewables. The interviews and workshops allowed the stakeholders (client, consultants and contractors) to explore these issues, and a range of topics, including specification and bulk procurement in more detail.

9.2 The Devanha Offer of Grant required the following:

• Improvements in environmental performance, sustainability and reductions in environmental impact, and;
• Improvements in quality, productivity and value for money through the use of continued improvement activity.

9.3 The Core Group and the Performance Improvement Group including development directors/managers, project managers, contractors, and architects explored the issues of Housing Quality and the integration of Modern Methods of Construction (MMC) within the Devanha programme. They were effective in providing an opportunity for sharing learning across schemes and connecting separate organisations that were party to the Devanha agreement. The research team examined Specification documents and minutes from the Performance Improvement Group and the Core Group.

Environmental Performance and Sustainability

9.4 Devanha were committed to developing a range of housing units that had a low environmental impact in operational terms and made use of renewable material and renewable energy sources.

9.5 The Devanha agreement stated that all scheme developments achieve a SAP2001 rating of no less than 100 or equivalent. During the programme some schemes were evaluated using SAP2005. These schemes required a rating of 80 to comply with the Devanha agreement. Two early Section 75 schemes which pre-dated the Devanha agreement failed to meet this standard. These projects did not use the Devanha specification and were designed according to developers' specifications. Only four section 75 schemes exceeded SAP targets, contrasting sharply with the schemes delivered through the Devanha framework where 28 schemes exceeded the SAP targets, the remaining four meeting the target.

9.6 The introduction and use of renewable materials and alternative energy sources was embedded in the agreement for Devanha housing and quality standards. A wide range of approaches were adopted across the schemes to achieve this aim. While lots of positive steps were taken to address the sourcing of materials, products and components, the opportunity to maximise the potential of cross programme procurement was not achieved. This was because the Devanha agreement was signed at a stage when a large proportion of detailed design work had been completed.

9.7 Many schemes were constructed using timber frame, developed and fabricated by local contractors. As Devanha progressed, the contractors evolved their approach to building timber frames, with the introduction of cassette units and refined panel systems. This provided opportunities for good control of quality in the build. This is evident in a number of schemes achieving better levels of air tightness than anticipated. However, the approaches taken by the three framework contractors were different and so this benefit was not evident in all schemes.

9.8 The focus on renewable materials and alternative energy appears to be on the improvement of the building fabric of the units to reduce energy consumption. A wide range of approaches is adopted across the forty five schemes. The following range of issues characterise the Devanha schemes:

• Waste Management strategies employed by the contractors to reduce the amount of material waste on site.
• Local sourcing of material, particularly concrete block, has been specified in a number of schemes. This reduces the transport cost and associated energy with moving materials large distances.
• Timber frame construction utilising locally sourced timber has been adopted to provide units by one contractor.
• Management of fill material between sites has optimised the re-use of site material. This was attributed to an individual contractor operating more than one site for the client.
• Some of the schemes have been 'super-insulated' which means that no central heating system is required, and in theory the occupants will not require to heat their homes at all.
• Air source heat pumps are being installed on a few schemes which will provide a low cost heating system for the units. (These were mostly framework schemes but they were also installed as part of the non-framework MVPI.)
• A number of schemes have high efficiency boilers and low energy lighting.
• One scheme has a central heating plant with underfloor heating, which will provide low-cost heating to tenants.

9.9 The ambitious SAP rating levels across the majority of Devanha schemes is the dominant cross programme achievement in relation to environmental performance and sustainability. This target has been instrumental in improving the performance of the units and leads to reduced heating costs and associated fuel poverty.

Devanha Standard Specification and Modern Methods of Construction

9.10 Devanha Phase 2 was committed to the promotion of building in higher quality as standard and within the agreed "target costs". The aim of improving quality while reducing costs was seen as a significant challenge by stakeholders in Devanha. It is generally perceived by client, contractors, project manager and architect that the quality of housing has improved through the delivery programme. No data on tenant satisfaction was available from completed schemes to provide an occupant viewpoint although this again is perceived to be largely positive by Devanha on the basis of informal feedback from tenants.

9.11 A Devanha specification was adopted early in the process, and this was used for all 45 schemes that were evaluated. The Devanha specification is based on the standard specification previously developed by Grampian Housing Association. This specification is based on working practices that have been used by the RSL and their consultants in previous projects. However, interpretation of the specification for individual Devanha schemes has resulted in a large number of variations across the programme. The causes of this are diverse, and include individual site constraints, planning considerations, RSL Development managers' preferences, Maintenance staff preferences, Contractor working methods, and supply chain issues. The ability to be flexible in applying the specification to schemes is clearly important for a programme of diverse projects, such as Devanha Phase 2. However, the inconsistent approach has made bulk procurement, standardised specifications and quality control more difficult to achieve. There is scope for greater standardisation and potential savings than was achieved in Devanha.

9.12 The Core Group and the Performance Improvement Group considered specification issues at regular intervals throughout Devanha, with the aim of identifying processes, and components that could be adopted across the programme. These groups explored the use of alternative methods of construction and standardisation of component specification. This included the following: Windows; Doors; Ironmongery; Sanitary Ware; Kitchen Units; and Boilers. This has resulted in cross programme efficiencies in procuring key repetitive components. There was also clear development of standard house types, one of the key successes of the framework, which were used through most of the later framework schemes. A few schemes unable to adopt standard house types were influenced by site or planning constraints. In general the standard house type has been accepted as a positive benefit in achieving quality improvements; connected to reduced design time, and the ability to use standard approaches and repetition in building the houses. This has advantages in terms of improving contractor processes on each unit and scheme, and enabling learning to be passed from one scheme to the next.

9.13 There has been a focus on achieving best quality within the budget in the selection of these components, which is a benefit of the scale of the development programme. One example of this is the reduction in the price of aluminium clad windows to the equivalent price of timber only windows, experienced in the delivery of the Devanha programme. This has resulted in the higher specification window being used as standard. This offers an increase in quality and potential savings of £10k per annum in maintenance costs to the RSL. However, this advantage has not been shared across the whole programme where four or five different window types are used.

9.14 The economic conditions that Devanha experienced resulted in highly competitive prices for some components. Where prices had been fixed this advantage was reduced. However, price certainty meant that Devanha could forecast spending more effectively. There does not appear to be a consistent pattern on the cost savings offered by bulk procurement and the framework agreement. Some cross programme advantages have been available due to the scale of Devanha, primarily associated with continuity of work for suppliers and sub-contractors. Specifications were different between RSLs, architects and contractors on individual schemes, and while efforts were made to consolidate specification to a programme level, this was often after schemes had been designed to a detailed level.

9.15 Significant learning from the specification development was shared by the Core and Performance Improvement groups throughout Devanha. It is recognised that putting this learning into practice has been affected by the timing of scheme delivery. Some difficulties arose in negotiating with some of the suppliers. These difficulties include: failure to achieve a good price; continuity of supply from smaller sub-contractors; quality of components.

9.16 The Devanha Specification was used across the whole programme. The schemes evaluated in 2008 all used the standard specification without any significant changes. There is evidence of some significant changes being made to specification in the new schemes from 2009 onward. All schemes used the Devanha specification for the basis of the design during validation stage. Six schemes made significant changes to the specification. In three cases this was due to the location or type of unit: Timmermarket is providing flats above a medical centre; Mintlaw 2 Sheltered and Holland Street both had special tenant requirements. The other three schemes that had significant differences to the Devanha specification were making use of innovative methods of construction. Two of the schemes have been super-insulated which removes the need for central heating. The other scheme has been insulated to a very high standard.

9.17 The final scheme to be delivered by Devanha is the large Donside project. This scheme is currently under development and incorporates a range of innovative features. It is anticipated that this scheme will incorporate learning from earlier schemes. However, ambitious design solutions have resulted in complexities in the delivery of the scheme. The difficult nature of the site (contaminated industrial land; flooding; access) has created further problems, although this would have been the case regardless of how the project was procured. This scheme was seen as the flagship project. Due to a range of factors it may not offer the benefits aspired to by working in a framework agreement.

9.18 Devanha committed to explore the potential for new innovation and modern methods of construction. The focus of activity was on the development of off-site timber frame construction, resulting in the adoption of a number of innovations in the use of timber. This included cassette floor panels, closed-panel wall construction and refining of the timber frame products. While these are not unusual or particularly large step changes, they offered opportunities for process improvement, and quality improvements in the housing. The contractors who were involved in developing improved timber components and frames benefitted from this process in terms of increasing expertise and market advantage that this potentially offers. This had an immediate reciprocal benefit to Devanha in the quality of the housing being offered.

9.19 Incorporation of bathroom 'Pods' into the construction, and their costing were explored extensively. This included site visits to manufacturers and investigation into the delivery of 'Pods' by a framework contractor. However, it was concluded that 'Pods' were not likely to offer any significant cost savings. Difficulties were also identified with co-ordination of the 'Pods' into the overall construction and if any later adaptations were required by tenants.

9.20 Off-site fabrication of large scale timber frame panels was utilised on a number of schemes. While cost savings are not evident, it is anticipated that improved quality for the same cost as on-site construction will be the main benefit for Devanha adopting this approach.

Conclusions

9.21 The housing and quality standards achieved by Devanha have generally been very good. The approach to improving quality has been driven by a commitment by the stakeholders to achieving a high standard of housing. The focus of the Devanha programme has been on the reduction of cost, as per the agreed targets. This has made the target of increasing quality extremely challenging. Nevertheless, this has been achieved in many ways across the programme. These range from improved quality in window specification to whole timber frames, and have generally been achieved by a consistent and determined approach by all stakeholders to improving the quality of the housing.

9.22 Where this has been less successful is the timing of improvement initiatives (workshops; sharing of lessons learned) occurring after significant design decisions have been made. This would have been improved by agreement at a very early stage in the framework on key cross programme quality and specification issues. The pressure of reducing costs has removed some of the opportunity to explore innovative approaches, like pod-construction, due to a concern over cost risk. This has possibly reduced the uptake of innovative approaches and products at programme level that may have offered quality and cost benefits.