- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 12 Jan 2017
Two stage open book procurement in construction
The Government Construction Strategy published in May 2011 stated an intention to reduce the cost of public sector construction by up to 20% by the end of the parliament, and to stimulate growth in construction.
The Government Construction Strategy: Final Report of the Procurement/Lean Client Task Group, published in July 2012, developed three potential new strategies to help achieve this aim:
All three of these strategies propose early contractor involvement, integration and transparency. They are expected to achieve cost reductions, enhanced project programming, improve working relations and reduce project risks.
In the two-stage, open-book bidding process, an outline bid and benchmark cost are provided to prospective project teams. Following the first stage, the project teams work with the client to develop the proposal and the contract is then awarded at this second stage. This allows the client to work at an early stage with a single, integrated team and allows faster mobilisation.
Two-stage, open-book can be used on single projects or a programme of works.
The flow chart from the Kings College publication (on behalf of the Cabinet Office), summarises the two-stage, open-book process.
There are ten fundamental requirements for the two-stage, open-book process (ref Cabinet Office, 2014):
- Client commitment to the early creation of an integrated team.
- Demonstrable benefits of the processes to all those involved.
- EU compliance.
- Agreed activities for the client, contractor, consultants and suppliers.
- Governance and continuity from the client and project team.
- Collaborative culture.
- Conditional contracts based on the agreed budgets, meeting the brief and any other agreed preconditions.
- Open book costs which include the agreement of fees, profit and overheads.
- Guidance and case studies.
- Cost savings of up to 20%.
- Cost competition and control.
- Improved design.
- Risk management.
- Time management.
- Extended warranties.
- Sustainable solutions.
- Stakeholder consultation.
- Appointment of small and medium sized enterprises (SMEs) and local/regional businesses.
- Employment and skills commitments.
 Trial projects
A number of trial projects were established to assess the two-stage, open-book method.
- Ministry of Justice, Cookham Wood – achieved a 20% cost saving.
- Surrey County Council, Project Horizon – achieved a 17.4% average saving over 5 years.
- Hackney Homes and Homes for Haringey – achieved a 14% cost saving.
This article contains public sector information licensed under the Open Government Licence v2.0. Ref Government Construction Strategy: Final Report of the Procurement/Lean Client Task Group. July 2012.
 Related articles on Designing Buildings Wiki.
- Collaborative working.
- Construction 2025.
- Cost Led Procurement.
- Early contractor involvement.
- Government Construction Strategy.
- Integrated Project Insurance.
- Open-book accounting.
- Two-stage tender.
 External references
- Government Construction Strategy.
- Government Construction Task Group Report.
- Hackney Homes and Homes for Haringey case study.
- Ministry of Justice, Cookham Wood case study.
- New Models of Construction Procurement.
- Project Procurement and Delivery Guidance, Using Two Stage Open Book and Supply Chain Collaboration.
- Surrey County Council, Project Horizon case study.
Featured articles and news
Timber is a natural carbon sink, but it must not end up in landfill at the end of its useful life.
BSRIA has collaborated with the Department of Health on research into air permeability in isolation rooms.
New step-by-step route maps for implementing effective surface water management measures are published.
GMP is an agreement with a contractor that the contract sum will not exceed a specified maximum. Read more here.
The BREEAM Sustainability Champion is changing to the Advisory Professional - here's what you need to know.
A fresh round of job-cuts takes the total number of redundancies to over 1,000.
Read our introductory article to the completion date in construction contracts.
Almost 90% of freight in London is moved by road. The River Thames could add much needed extra capacity.
National Infrastructure Commission warn that large infrastructure projects are at risk of falling behind.
The quality of Cambridge owes as much to its open spaces as to its architectural uniqueness.