An evaluation of performance improvement within public sector construction framework agreements

Context of this research: The construction industry has a history of client dissatisfaction in the UK. In response, framework agreements have been developed to create relationships between suppliers and clients in order to improve project performance. This research aims to assess whether use of framework agreements can result in significant improvement for performance outcomes without a significant increase in costs when compared with traditional discrete methods, and if so, develop a procurement performance model for realisation and continuous improvement in performance. Research methodology: A literal review of UK Government reports with economic and performance management theories precede a case study set within Hampshire County Council, a major public sector authority, allowing analysis of data from 164 highway maintenance projects by independent samples t-tests. Projects are divided into discrete and framework groups using critical success factors to measure performance differences. In addition to project outcomes, a review of economic performance was undertaken to advance a current ‘gap in professional knowledge’ concerning cost effectiveness of framework agreements. A performance management model is proposed representing impact of operational measures and sociological behaviour factors on suppliers’ performance, tested by qualitative views of experienced practitioners collected through a questionnaire survey and in-depth interviews. Key findings: Independent-samples t-tests proved that there were significant improvements in performance with use of framework agreements, but that no significant additional costs were incurred. Factor analysis and central tendency statistics from questionnaires and node values from interview transcripts confirmed long-term relationships, financial and non–financial incentives and stronger communication were sociological behaviour factors driving performance for framework agreements. Conclusions from the evidence and findings: As framework agreements can achieve significant performance improvements without a significant increase in costs, this study supports use of framework agreements for Hampshire County Council and professional practice. Value of this research is recognised by both central government and case study organisation alike. In respect of the latter context, case study findings have been included within a regional framework for use by South East authorities until 2016. It is recommended further studies should be conducted on civil and building projects in wider public and private sectors so that construction clients can make informed decisions based upon generalised findings