OGC gateway review 3

The Office of Government Commerce (OGC) has now been absorbed into the Efficiency and Reform Group (ERG) within the Cabinet Office.

When it existed, the OGC produced a great deal of guidance about best practice in procurement and project management. This OGC guidance has now been archived, however, it is still cited in the new Government Construction Strategy and the revised Common Minimum Standards (to become the 'Construction Standards') and links are still provided from government websites such as the Major Projects Authority. The OGC gateway review process still provides one of the best and most comprehensive sets of guidance for public projects. It is for this reason that the project plan for public projects within Designing Buildings Wiki follows the OGC gateway review process. See Public project: outline work plan.

The procurement routes preferred by the Government Construction Strategy and described by the OGC gateway review process are private finance initiative (PFI), prime contracting and design and build (see OGC Achieving Excellence Guide 6:Procurement and contract strategies). The Government Construction Strategy states that traditional procurement routes that separate design from construction should not be used unless it can be demonstrated that they offer better value for money.

The three preferred routes involve appointing a single integrated supply team (including designers, contractors, suppliers and perhaps facilities managers) after the project brief has been prepared, before design commences. This means that the main decision to invest (i.e. to appoint the integrated supply team), takes place before any designs have been prepared.

The OGC Gateway Review process offers a structure for projects following these procurement routes, based around a series of independent peer reviews carried out at key stages to verify that projects should be allowed to progress to the next stage.

These peer reviews, or 'gateway reviews' are commissioned on a confidential basis by the Senior Responsible Owner:

• OGC gateway review 0: strategic assessment.
• OGC gateway review 1: business justification
• OGC gateway review 2: delivery strategy (or procurement strategy)
• OGC gateway review 3: investment decision
• OGC gateway review 4: readiness for service
• OGC gateway review 5: operations review & benefits realisation (or benefits evaluation)

There are also two additional decision points specific to building projects:

• OGC decision point 1: outline design.
• OGC decision point 2: detailed design.

In practice, some of the design work leading up to these decision points is likely to be carried out during the tender process (or bidding process on PFI projects).

OGC state that the purpose of gateway review 3: investment decision is to...

• Confirm the Full Business Case and Benefits Plan now that the relevant information has been 'confirmed from potential suppliers and/or delivery partners.
• Confirm that the objectives and desired outputs of the project are still aligned with the programme 'to which it contributes and/or the wider organisation’s business strategy.
• Check that all the necessary statutory and procedural requirements were followed throughout the 'procurement/evaluation process.
• Confirm that the recommended contract decision, if properly executed within a standard lawful 'agreement (where appropriate), is likely to deliver the specified outputs/outcomes on time, 'within budget and provide value for money.
• Ensure that management controls are in place to manage the project through to completion, 'including contract management aspects.
• Ensure there is continuing support for the project.
• Confirm that the approved delivery strategy has been followed.
• Confirm that the development and implementation plans of both the client and the supplier or 'partner are sound and achievable.
• Check that the business has prepared for the development (where there are new processes), 'implementation, transition and operation of new services/facilities, and that all relevant staff are 'being (or will be) prepared for the business change involved.
• Confirm that there are plans for risk management, issue management and change management '(technical and business), and that these plans are shared with suppliers and/or delivery partners.
• Confirm that the technical implications, such as ‘buildability’ for construction projects; and for 'IT-enabled projects, information assurance and security, the impact of e-government frameworks '(such as e-GIF, e-business and external infrastructure) have been addressed.
• Evaluation of actions taken to implement recommendations made in any earlier assessment 'of deliverability.

Ref OGC gateway process review 3: investment decision.

According to OGC, the tasks that should be undertaken prior to gateway review 3: investment decision are:

• Adopt standard form of contract where possible. Ensure allocation of risks to parties best able to manage them and arrangements to monitor risk allocation over the project lifecycle, including the extent to which risk is transferred. Consider use of incentives. Confirm contract documentation reflects business needs. Compare revised estimate against budget.
• Where an integrated supply team is not already in place (on a prime contract, a single integrated supply team may have been pre-selected for all contracts of a particular nature), determine and apply selection and award criteria, minimum quality thresholds, quality/whole-life cost mechanisms. Consider use of incentives. Prepare long list, select suitable bidders on basis of quality, select short list and agree a tender list. Prepare pre-tender estimate (or target cost).
• Where integrated supply team is not already in place, issue invitation to tender/negotiate, evaluate bids on basis of whole-life cost and quality.
• Completion of Full Business Case, including tender assessment (where integrated supply team is not already in place) and comparison of proposed contract value with approved budget and pre-tender estimate. Where integrated supply team is in place, confirm the target price in line with existing agreement.
• Review approval for investment decision. Review business case benefits realisation. Review procurement route. Review stakeholder support.

ref OGC: Achieving Excellence Guide 3 - Project Procurement Lifecycle P14 and 15.

The client should also confirm the availability of funds before committing to proceed.

For a detailed description of the sequence of tasks necessary on public projects, see the free work plan available from Designing Buildings Wiki: Public project: outline work plan. Gateway review 3 takes place at the end of the work stage: Public project: tender or on PFI projects: Public project: PFI tender .

[edit] Related articles on Designing Buildings Wiki

• Design and build.
• Gateways.
• Government Construction Strategy.
• OGC.
• OGC decision point 1.
• OGC decision point 2.
• Output based specification.
• Private Finance Initiative.
• Prime contract.
• Public procurement.
• Major Projects Authority.

[edit] External references

• OGC Gateway Process: Review 3: Investment decision.
• OGC: What is OGC gateway review?
• OGC: Achieving Excellence Guide 3 - Project Procurement Lifecycle.