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McAlpine, Morgan Sindall and Wates in ‘ground-breaking’ L&G framework

2 September 2020
Artist’s impression of Guild Living’s Walton-on-Thames development

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 all.”

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.”

Comments

I look forward to seeing the results from the innovative alliance partnership, which seems to be correctly based, sharing risk.

Alan Edwards, 4 September 2020

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