Professional Services Contract (PSC) for Consultants Selection Process for NHS Clients
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1 Professional Services Contract (PSC) for Consultants Selection Process for NHS Clients December 2008
2 Contents Page Contents...2 Introduction...3 The Process Flowchart...4 Project Registration: Step High-Level Information Pack: Step Expression of Interest: Step Example of /Letter to PSCs PSC Submission: Step PSC Shortlisting Step Invitation to Interview: Step Example of Interview Invitation Letter...10 NHS Client Interview Selection Panel: Step Example of Letter of Regret for Unsuccessful PSCs...13 PSC Appointment: Step Example of Letter of Appointment...15 Appendix 1 PSC Appointment Options Summary...18 Disclaimer The contents of this document are provided by way of general guidance only at the time of its publication. Any party making any use thereof or placing any reliance thereon shall do so only upon exercise of that party s own judgement as to the adequacy of the contents in the particular circumstances of its use and application. No warranty is given as to the accuracy, relevance or completeness of the contents of this document and Health Facilities Scotland shall have no responsibility for any errors in or omissions therefrom, or any use made of, or reliance placed upon, any of the contents of this document. December 2008 Page 2 of 22
3 Introduction The purpose of this guidance is to set out a standardised process using consistent principles and criteria by which NHS Clients may select Professional Services Contract (PSC) Consultants from Frameworks Scotland for a particular project or range of projects. Frameworks Scotland is utilising the NEC Professional Service Contract (PSC) for the appointment of professional organisations to support NHS Boards in the delivery of major capital projects through the Frameworks Scotland initiative. There are PSC Frameworks for the following consultancy services: NEC3 Project Managers NEC3 Supervisors Cost Advisors Healthcare Planners CDM Coordinators Health Facilities Scotland (HFS), with support from representatives from NHS Boards and independent advisors, have gone through an intensive selection process to provide suitably qualified and experienced consultants that can quickly be selected and appointed to local projects. HFS will offer advice and support throughout their selection and must be contacted before entering into the selection process. The selection should take into account issues such as relevant experience, proposed members of the PSC team, planned approach and the availability of resources. This process is not intended to be a replay of the extensive selection process which each of the PSCs undertook for selection to Frameworks Scotland. December 2008 Page 3 of 22
4 The Process Flowchart The process is based around a simple flowchart as seen in Figure 1. This is not meant to be prescriptive to NHS Clients, whose specific requirements may require the process to be modified with the help of the Health Facilities Scotland (HFS) Capital Projects Manager/Advisor, who will be available at all stages of the process to assist with the selection of a preferred PSC should they be required. Further details on each step are provided in the latter sections of this document. Figure 1: Standard Selection Process Flowchart of a PSC Consultant by NHS Clients The following sections of this paper are set out against the steps outlined within the above flowchart and provide additional guidance to NHS Clients as to the expectations of all members involved in the process. December 2008 Page 4 of 22
5 Project Registration: Step 1 The NHS Client Project Director registers the scheme with an HFS Capital Projects Manager/Advisor who will be available to provide advice and guidance on the remainder of the process. The NHS Client will agree with the HFS Capital Projects Manager/Advisor which consultancy support roles are required for the project and when the scheme will be released to the PSC Consultants. It is important that any anticipated clashes with other projects are identified and measures taken to mitigate the potential of PSC Consultants being involved in multiple selection processes at any one time. The PSC frameworks have provision for three options of the NEC Professional Services Contract to be utilised and there is commentary on each of these Options A, C and E within Appendix 1 of this document. December 2008 Page 5 of 22
6 High-Level Information Pack: Step 2 The NHS Client is required to put together a High-Level Information Pack (HLIP) on the project which will ensure that the PSC Consultants are as fully informed as possible at this stage. The packs should be issued to the relevant PSC Consultant Key Account Managers (KAMs). Should any organisations not wish to progress at this stage then they should state the reasons for this decision in a formal response to the NHS Client and the HFS Capital Projects Manager/Advisor. The contents of the High-Level Information Pack may include some or all of the following: the name of the Scheme; an outline of the Scheme and its intended site; a summary of the Development Control Plan; the strategic service context of the project; description of the current stage of the scheme e.g. Pre-Initial Agreement, Initial Agreement (IA), Outline Business Case (OBC), or Full Business Case (FBC); the Executive Summary of the current business case, if available; output specifications to whatever detail they have been developed; an indication of the level of design completed e.g. Block drawings (included if completed), 1: 200, 1: 50 drawings, specifications, schedules etc; project budget as detailed in the IA/OBC/FBC together with any professional views if there is an affordability gap; planning position, constraints and risks; site constraints and risks; programme timescales together with any enabling, phasing or funding issues; client related stakeholders with a direct interest in the scheme; outline programme of the selection procedure and those involved; anticipated role of any current professional advisers (architects, cost advisors, M&E consultants, etc.) on the project; where other relevant information can be obtained, including contact points. December 2008 Page 6 of 22
7 Expression of Interest (EOI): Step 3 Example of Letter to PSCs To: PSCs [for discipline] (Contact details available from HFS Capital Projects Manager/Advisor) cc: HFS Capital Projects Manager/Advisor Subject: Request for an Expression of Interest XXXXXX Hospital, NHS XXXXX Board XXXX Project Dear. NHS XXXXXXXX Board has decided to adopt the Frameworks Scotland Framework strategy for the above project and wish to appoint a PSC Consultant [for discipline(s)] to work with us to achieve delivery of this project. The Board selection process shall take the following form: EOIs submitted to the Board XX/XX/XX Board review PSC submissions XX/XX/XX Interviews held with shortlisted PSCs XX/XX/XX PSC selected XX/XX/XX A High-Level Information Pack for the project is attached which includes a copy of the selection criteria that will be applied during the process. The pack should provide you with adequate information to enable you to submit your expression of interest (EOI), limited to 10 A4 pages to be returned by to the Board by XX/XX/XX. Your EOI should include the following information: General Experience XX% Specific experience of this type of project XX% Names and CVs of proposed staff XX% Clear statement of their availability XX% If you require any further information please do not hesitate to contact me. M A. Person XXXXXXX NHS Board In response to the invitation, the PSC Consultants submit Expressions of Interest (EOI) or decline stating the reasons and notify the HFS Capital Projects Manager / Advisor. EOIs must contain the information outlined in the letter issued to PSC Consultants. December 2008 Page 7 of 22
8 PSC Submission: Step 4 Each PSC Consultant should be asked to respond with a brief written submission within 10 working days. The submission should be limited to 10 A4 sheets (not less than 12 point font) covering details of their proposed team, relevant experience, personal profiles, best practice examples, etc. For guidance, the submission may include: e.g. Clear statement of available resources for the duration of the project - 30% Specific experience relative to the project - 40% Names and CVs of proposed staff - 30% The above headings and associated weightings are indicative and should be used as a guide and NHS Clients may wish to develop more project specific criteria. December 2008 Page 8 of 22
9 PSC Shortlisting: Step 5 This step is recommended for PSC Consultant disciplines with more than 4 consultants on the relevant framework. NHS Clients may wish to carry out a shortlisting process in order to reduce the number of consultants to be interviewed down to a more manageable number. PSC Consultants should be evaluated using the adopted shortlisting criteria and NHS Clients should provide feedback to the unsuccessful organisations at the same time as the successful candidates are informed that they have progressed to interview. December 2008 Page 9 of 22
10 Invitation to Interview: Step 6 The NHS Board invites the shortlisted PSC Consultants to Interview. The standard interview takes the form of a presentation by the Consultants as to their proposed approach to the project in response to the selection criteria defined by the Board followed by questions from the interview panel. The selection and number of personnel attending is left to the discretion of all parties permitting the maximum contribution by the team to be obtained. Example of Interview Invitation Letter PSC Key Account Manager PSC Limited Address Town City Post Code Dear PSC KAM re: XXXXX Hospital, NHS XXXXX Board; Title of Project Frameworks Scotland - Interview [insert interview date here] Corporate Services Division Estates Department XXXXXX Hospital XXXXXX Road XXXXXXXX Scotland AB1 xxx Telephone: XXXX Facsimile: XXXX XXX/XXXX Insert Date When we issued our letter [insert date when letter was issued] inviting Expressions of Interest for the above project, you were informed the Board was to hold an Interview Day whereby shortlisted companies would deliver to the Board thoughts and philosophy concerning the scheme. We are please to inform you that your company has been shortlisted for interview on [insert date when interview will be held 20XX and also insert relevant location details of interview and time]. This session will enable the Board to finalise the PSC Consultant [for discipline] with whom it wishes to develop and deliver the scheme. The session will last for one hour and you should time your presentation to last for no longer than 30 minutes. Following the presentation the remainder of the time will be taken up by a question/answer session and general discussions. December 2008 Page 10 of 22
11 Client Representatives will include: M xxxxx M xxxxx M xxxxx M xxxxx M xxxxx M xxxxx Chief Executive Project Director Clinical Lead Estates Development Manager Non-Executive Director HFS Capital Projects Manager/Advisor [Those above are shown as examples, others can be included as deemed appropriate] The interview selection criteria will take the following form: [the following is based on the requirements set down in the Framework Agreement for each PSC - Criteria headings in bold text should be applied for all projects with response/presentation requirements indicated on a project specific basis] Criteria [Note: The ranking and weighting within the defined ranges to be at the discretion of the NHS Board s Panel]. Proposed personnel for the scheme The proposed team. The resources you have available to assist the NHS Board. Weighted Score Framework range % Experience relevant to the scheme How will your team deliver added value. What experience you have of similar work, which you can bring to bear on this scheme. Approach to the scheme What activities you would undertake in the first 6 weeks following appointment to assist effective mobilisation of the scheme. Performance of the PSC in relation to other schemes (without limitation) performance against the KPI s and performance under this agreement or Scheme Contracts N/A for early projects Applicable fees and rates of PSC as set out in this Agreement Framework range % Framework range % Framework range % Framework range % [You may decide to limit the number of members from the PSC attending the Interview] I trust that the information contained in this letter and previously distributed is sufficient for your needs but should you require further details then please do not hesitate to contact me on 01xxx I would ask that you confirm your intention to attend the interview on the date and time previously mentioned. Yours sincerely M A Person Estates Director / Project Director / Facilities Director Encs. December 2008 Page 11 of 22
12 NHS Client Interview Selection Panel: Step 7 In order for the NHS Client to produce interview selection criteria, give weightings and develop an agenda for the Interview Day, an Interview Selection Panel will need to be formed. This Interview Selection Panel will need to initially evaluate the responses to the shortlist selection criteria, be at the interviews and score each PSC Consultant against the weighted criteria as a result of the interview. The Output will be a recommendation on which PSC Consultant should be selected and an auditable report on how and why this decision was arrived at. Feedback to tell each PSC of how they scored against the selection criteria together with any helpful comments as to how they might improve their performance in future. December 2008 Page 12 of 22
13 Example of Letter of Regret for Unsuccessful PSC Consultants XXXX/XXX Corporate Services Division Estates Department XXXXXl Hospital XXXXXX Road XXXXXXX Scotland AB1 xxx Insert Date PSC Key Account Manager PSC Limited Address Town Post Code Dear PSC KAM Re: Frameworks Scotland - Selection Process I wish to inform you that you were unsuccessful in being selected as PSC Consultant [for discipline] for NHS XXXXX Board as a result of the selection interviews held on XX/XX/XX. For your information I also enclose a copy of the scoring matrix completed on the interview day so that you can judge your overall performance compared with the other Consultants involved, which I hope you will consider as useful feedback. I wish to thank you for all of your considerable effort through the selection process and wish you continued success in all future projects you will complete for the NHSScotland under the Frameworks Scotland initiative. Yours sincerely M A Person Estates Director / Project Director / Facilities Director Encs. December 2008 Page 13 of 22
14 PSC Appointment: Step 8 Having chosen your preferred consultant you are now in a position to issue a formal Letter of Appointment covering the initial four to eight weeks prior to contract, allowing the PSC to draw up and submit their activity schedule and fee proposal for the relevant stages of the works. December 2008 Page 14 of 22
15 Example of Letter of Appointment Note: The following is an example only and NHS Clients should contact HFS when selecting and appointing PSCs for the first time, in order to obtain the relevant letter for the PSC discipline and NEC option appropriate to their project. *Insert NHS Health Board Name and Address *Insert Consultant Name and Address Date : *Insert date Reference :*Insert reference Dear Sirs,. (*Insert Name) RE: [*NAME OF SCHEME] Appointment of Project Manager Further to your expression of interest and our meeting on [*insert date] at [*insert place] please accept this letter as notification of your appointment as Project Manager for the above named scheme and that you are instructed to proceed as follows: The appointment is in accordance with the Frameworks Scotland Agreement and incorporates the Template for the Scheme Contract (NEC3; Professional Services Contract (PSC) Option C Target contract with activity schedule) that details the contract obligations, payment and other processes. The PSC processes including programme and are to be entered into from commencement of work associated with this appointment The Contract Date is: The date of acceptance of the appointment by the Consultant entered in the Confirmation of acceptance of appointment as Consultant appended to this letter for return to the NHSScotland Health Board at the above address. As Consultant you are not authorised to commence work until the Confirmation of acceptance of appointment as Project Manager has been received and acknowledged by the NHSScotland Health Board at [the above address]. It is confirmed that the scope of work is as detailed in the scheme pack issued by the NHSScotland Health Board for registration of expression of interest by the Consultant [ *insert brief description of Project Specific Scheme Contract]. The limit of authorised expenditure by the Consultant in the period prior to submission of the Consultant s Entry Form of Proposal and signing of the Form of Agreement for the Scheme Contract by the NHSScotland Health Board and the Consultant is: [. Words (excluding VAT)] December 2008 Page 15 of 22
16 For avoidance of doubt; there are no contract payments in excess of the stated limit prior to signing of the Form of Agreement by the Parties except that the limit is changed by the Employer where the Parties have complied with the contract procedures. The period for providing the Form of Proposal and entering into the Form of Agreement between the Parties during which the authorised expenditure is discharged is [Insert number of weeks.] I/We confirm your entry into the scheme is at the *[pre-ia] [IA] [OBC] [FBC] phase. The pre-start meeting for this scheme *is to be arranged/*has been arranged for:- [*Insert date and time] at [*Insert location] In the meantime the Project Director with whom you may communicate on any matter concerning the contract is. [*Insert name] [*insert location] [*insert tel no], Please note the person named is the only person authorised to give instructions in accordance with the contract on behalf of the NHSScotland Health Board. I/We look forward to a successful working relationship and if you have any queries please do not hesitate to contact [*me/*the undersigned/*other stated person]. Yours sincerely NHSScotland (Health Board authorised signatory). Date December 2008 Page 16 of 22
17 Headed note paper of Consultant to *Insert NHSScotland Health Board Name and Address Dear Sirs, RE: [*NAME OF SCHEME] Appointment of Project Manager Confirmation of acceptance of appointment as Consultant I/We confirm acceptance of the appointment and entry into the first stage of the contract with limitations as stated in the letter of appointment.. The Consultant (Appointed signatory) Date of acceptance December 2008 Page 17 of 22
18 Appendix 1 PSC - Appointment Options Summary The following notes on this page are based on the NEC3 Professional Services Contract Guidance Notes. (These guidance notes do not form part of the engrossed contract options) There are three types of payment mechanism available through the main options under Frameworks Scotland. a Option A Priced contract with activity schedule b Option C Target contract c Option E Time based contract These options provide different allocations of risk between the Employer (the NHS Client) and the Consultant and use different arrangements for payment to the Consultant. Option A - lump sum priced contract in which the risks of being able to Provide the Services at agreed prices in the Activity schedule are largely borne by the Consultant. An Activity schedule is a list of the activities which the Consultant expects to carry out in providing the services. The lump sum for each activity is the price to be paid by the employer for that activity. Option C - is a target contract in which the financial risks are shared by the Employer and Consultant in agreed proportions. A priced activity schedule is the basis for agreeing a target price for the provision of the Consultant s services. The Consultant is paid the Time Charge for relevant staff levels as defined in the workbooks to the Framework Agreement. Option E - A Time based contract where the Consultant forecasts the Time and value for the service and should be used when the Employer cannot accurately define requirements for a lump sum to be quoted. The risks are largely borne by the Employer and the Consultant s costs are paid in line with the Time Charge for relevant staff levels as defined in the workbooks to the Framework Agreement. December 2008 Page 18 of 22
19 Option A Option C Option E Option A requires the NHS Client to be very specific in the scope of responsibilities and the programme for the service as the Consultant is appointed on a Lump Sum cost basis The NHS Client has little or no say in the amount of risk/ contingency the Consultant includes in the Prices 1. The Option A contract is primarily a lump sum price route. 2. The Prices are based on a Client s scope for engagement of a Consultant. 3. The NHS Client is effectively required to provide a definitive programme against which the Consultant allocates their Prices 4. The scope is subject to compensation events for any change in service including programme. 5. In the early stages of a scheme the Employer s requirements may be liable to constant Option C allows the NHS Client to engage a Consultant at varying levels of service. Responsibilities placed on the Consultant can be increased exponentially or more conservatively if necessary. The NHS Client and Consultant negotiate and agree the resources and amount of risk included in the Prices 1. The Option C contract is a shared risk route. 2. The Prices are in the form of an activity schedule and are based on a Client s scope for engagement of a Consultant. 3. The NHS Client should provide a definitive programme against which the Consultant allocates their Prices 4. The scope is subject to compensation events for any change in service including programme. Option E allows the NHS Client to engage a Consultant on the basis of the Prices being a forecast total Time Charge. The NHS Client and Consultant agree the resources to be included in the forecast total Time Charge. 1. The Option E contract is an Employer s risk route. 2. The Prices are in the form of a forecast and are based on a Client s scope for engagement of a Consultant. 3. The NHS Client should provide a programme against which the Consultant would forecast their Price, the total Time Charge. 4. The scope can be fairly wide to reduce the effect of change requiring compensation events. December 2008 Page 19 of 22
20 change in respect of meetings attendance and workstreams required.. Administration of an Option A service; This requires a similar input to a traditional appointment using RICS, RIBA, MICE and Procode conditions and also a competent knowledge of the NEC PSC process and conditions. Administration of an Option C service; This can be more time consuming and requires competent knowledge of the NEC PSC process and conditions. 1. To operate effectively a target should be agreed for each Stage of the service. 2. To avoid an unacceptable number of compensation events, the NHS Client and Consultant can negotiate an individual target for each Stage. 3. Targets are controlled by compensation events. 4. The NHS Client accepts programmes and revised forecasts each month. Administration of an Option E service; This will still require competent knowledge of the NEC PSC process and conditions. A scope and programme are required but the contract can be modified so that the NHS Client does not respond to programme and forecast submissions by the Consultant unless they result in increased Time or cost. 1. To operate effectively a total forecast for the work should be agreed/identified at the start of the service and apportioned for each Stage. 2. Compensation events would still apply for changes in scope or programme 3. The NHS Client accepts programmes and revised forecasts each month. 4. If the Stage gateway approach is adopted, then time and resources from both Parties has to be expended reaching December 2008 Page 20 of 22
21 5. If the Stage gateway approach is adopted, then time and resources from both Parties has to be expended reaching the Agreement. the Agreement. 5. Thereafter change is subject to a compensation event. Conclusion; A full Option A contract requires; A definitive scope and programme supplied by the Client for Pricing Changes to the scope and programme require negotiation of Price effect where the Client will have little opportunity to affect the allocation of risk within the Prices. In the framework environment where change can be expected in the pre construction stages of a scheme this option can require considerable inputs by both Parties to effectively administer the contract. 6. Thereafter change is subject to a compensation event. Conclusion; A full Option C contract requires; A definitive scope and programme supplied by the Client for Pricing Changes to the scope and programme require negotiation of Price effect. In the framework environment where change can be expected in the pre construction stages of a scheme this option can require considerable effort by both Parties to effectively administer the contract. Conclusion; An Option E contract requires; A definitive scope and programme supplied by the Client for Pricing Changes to the scope and programme require negotiation of Price effect. Additional payment provisions for this contract option are included in the Template Contract as Z Clauses to provide additional control over invoicing for time based on the Consultant s agreed cash flow forecast for the Services. Use of Option A, C or E depends on the Client s perception of apportionment and costing of risk. Option A should only be used where there is a low expectation of change. Use of Option C generally requires more administration than Option E. The Client should weigh that against use of Option E, accepting that the Prices may change with circumstance but with a focus on final cost through regular December 2008 Page 21 of 22
22 cost forecasting by the Consultant and a cap on increase to the initial forecast without agreement. Note: Consultants are appointed on a discipline by discipline basis off the PSC Frameworks and there is no scope for multi-disciplinary appointments even where single organisations can provide this. This will potentially result in NHS Clients having to administer several appointments for advisors on projects. December 2008 Page 22 of 22
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