CONSTRUCTION INDUSTRY FORUM FOR NORTHERN IRELAND THURSDAY 7 APRIL 2016

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1 CIFNI (16) P01 CONSTRUCTION INDUSTRY FORUM FOR NORTHERN IRELAND THURSDAY 7 APRIL 2016 Subject: Recommendation: Sustainability requirements and proposals to protect the delivery of BuySocialNI in Government construction contracts. That CIFNI members consider: the draft model sustainability clauses for implementing BuySocialNI; the draft template for the Contractor s Sustainability Report; and the proposals to protect the delivery of BuySocialNI in Government s construction contracts. Background: 1. The CIFNI Sustainability Working Group developed a revised set of sustainable construction requirements which were presented to CIFNI members at its meeting in December The proposals consist of a number of sustainability objectives grouped under the Social, Environmental and Economic pillars of sustainable development. Within each objective there are a number of requirements. In the majority of cases these requirements will be included in the NEC Engineering and Construction Contract under the Works Information. The social objectives include the BuySocialNI construction model. 2. At the last meeting members were advised that CPD in conjunction with the Sustainable Construction Task Group (SCG) would develop the following complementary proposals for future consideration by members: a revised set of Model Clauses for use by the CoPEs; and a standard template for the Contractor s Sustainability Report, for use by contractors and CoPEs as a single source of reporting for relevant construction contracts. 3. A draft of the Model Clauses to facilitate the implementation of the BuySocialNI construction model, in April 2016, is included at Annex A. The SCG is currently developing the remaining Economic, Social and Environmental clauses. 4. An explanation of the draft Microsoft Excel Template for the Contractor s Sustainability Report is attached at Annex B. The template itself is attached separately. These drafts are currently being considered with colleagues in the Strategic Investment Board. 1

2 CIFNI (16) P01 Proposals to protect the delivery of BuySocialNI in Government s construction contracts 6. The BuySocialNI construction model will create paid employment opportunities for new entrant trainees. While contractors will be required to price the delivery of BuySocialNI requirements in their tender, it is important that Government Clients have a mechanism to address non delivery of the Model s requirements during the contract. This is to ensure that: the spirit of the BuySocialNI model is protected; proper governance is adhered to in the expenditure of public funds; and a level playing field is created for all Contractors bidding for the contract at tender stage. 7. Members are asked to consider the proposals to protect the delivery of BuySocialNI outlined at Annex C. CPD proposes to implement the requirements described in Annex C via additional model clauses to those included at Annex A. Recommendation: 8. That CIFNI members consider: the proposed draft model sustainability clauses for implementing BuySocialNI; the draft template for the Contractor s Sustainability Report; and proposals to protect the delivery of BuySocialNI in Government s construction contracts. 2

3 Annex A - Model Clauses for BuySocialNI PROPOSALS FOR PROMOTING EQUALITY AND SUSTAINABLE DEVELOPMENT BY SUSTAINABLE PROCUREMENT IN CONSTRUCTION SUSTAINABILITY REQUIREMENTS, GUIDANCE & MODEL CONTRACT CLAUSES (April 2016) These requirements should be considered as minimum standards. However, it is recognised that Contracting Authorities have a degree of flexibility in setting their targets. This flexibility gives Contracting Authorities the discretion, depending upon the scope and nature of the project, to adjust the targets to reflect particular social or economic circumstances in relation to a specific project. Contents Page OVER-ARCHING REQUIREMENT...2 TO RECORD PROGRESS TOWARDS MEETING SUSTAINABILITY REQUIREMENTS...2 SOCIAL...5 TO PROMOTE SOCIAL INCLUSION AND EQUAL OPPORTUNITIES, INCLUDING THE PROGRESSION INTO THE WORKPLACE OF PEOPLE WHO ARE LONG TERM UNEMPLOYED AND THOSE LEAVING EDUCATION AND TRAINING AS A KEY WAY OF DELIVERING THE SOCIAL ELEMENTS OF SUSTAINABLE DEVELOPMENT

4 Annex A - Model Clauses for BuySocialNI OVER-ARCHING REQUIREMENT To record progress towards meeting sustainability requirements Contracts include a requirement for the Contractor to provide a monthly report on progress towards meeting the sustainability requirements included in the contract. Model Contract Clause (where applicable) Contractor s Sustainability Report The Contractor submits to the Project Manager:- Within two weeks of the starting date / contract award, a report on the delivery of sustainability requirements under the contract. The Contractor s Sustainability Report shall be in the form set out in the Works Information template (If the starting date is not specified in the Employer s Contract Data then the date of contract award is to be used); the Contractor s Sustainability Report includes: a Contractor s Buy Social Delivery Report ; - a Contractor s Subcontract Acceptance and Payment Report; - a Contractor s General Sustainability Report; and - a Contractor s Health and Safety Report (using the GCH&SOG reporting Template) a monthly update on the delivery of sustainability requirements under the contract using the Contractor s Sustainability Report. Progress on delivering sustainability requirements to be reviewed, by the Project Manager, under an agenda item on sustainability at each project meeting. The Contractor adds to the Sustainability Report as the project progresses and submits to the Project Manager a final Sustainability Report by the Completion Date as evidence that the requirements as set out in the Works Information have been complied with. The Contractor provides all information necessary and cooperates with the Project Manager to review its progress towards meeting the contract s sustainability requirements at the monthly site meetings. The Contractor s Sustainability Report is to be included as a template in the Works Information. 4

5 Annex A - Model Clauses for BuySocialNI SOCIAL 1 To promote social inclusion and equal opportunities, including the progression into the workforce of people who are long term unemployed and those leaving education and training, as a key way of delivering the social elements of Sustainable Development. Model Contract Clause (where applicable) Contracts to include Targeted Recruitment and Training (TR&T) Requirements that the Contractor either directly, or through the supply chain provides: Targeted Recruitment and Training (TR&T) Requirements for Construction Contracts Recruitment and Training Plan for the Project The Contractor submits a Recruitment and Training Plan to the Employer within two weeks of the starting date / contract award setting out:- For Building contracts estimated at 2M and above: 52 person weeks of paid employment for New Entrant Trainees for each 1M of contract value and pro-rata, Civil Engineering contracts estimated at 4M and above: 26 person weeks of paid employment for New Entrant Trainees for each 1M of contract value and pro-rata. - The numerical target, based on the above formula, must be written into the Works the Contractor s plans, procedures and programme for providing opportunities for New Entrant Trainees, including apprentices and students, and for Work Experience placements as set out in the Works Information. New Entrant Trainees The Contractor either directly, or through its supply chain, provides xx person-weeks of paid employment for New Entrant Trainees that have an apprenticeship, trainee or employment contract with the Contractor or a subcontractor. A person-week is the equivalent of one person working for 5 days either on site, or through a mix of on-site work and off-site training; A New Entrant Trainee is one of the following: a person that is leaving or has within the last 12 months left an educational establishment or a training provider (including paid student work placements); a person aged under 25 that has been registered as a job-seeker for more 5

6 Information under New Entrant Trainees. These requirements may be included in lower value contracts if required by the Employer. Annex A - Model Clauses for BuySocialNI than 26 weeks and is seeking employment that includes on-site training and assessment, or offsite training (or a mix of these); a person aged 25 or over that requires training and support and has been registered as a job-seeker for more than 52 weeks and is seeking employment that includes on-site training and assessment, or offsite training (or mix of these); or an existing New Entrant Trainee known to the Employer that is seeking a new position to complete their new entrant period, or another person accepted as a New Entrant Trainee by the Employer. The Contractor is to work with and notify all New Entrant Trainee vacancies to the Jobs and Benefits Offices and one or more organisations registered with the NICS Brokerage Portal [ and to other organisations named or otherwise agreed for this purpose by the Employer. Recruitment procedures should be avoided where applicants are mainly or wholly identified through the existing workforce or any other restricted group, and sufficient time must be allowed for information on vacancies to be made available and applications submitted. A New Entrant Trainee can be one of the following: an apprentice who is undertaking a paid apprenticeship, registered within the ApprenticeshipsNI programme or an equivalent scheme (e.g. Level 2 framework apprentices or Level 3 framework apprentices or a similar scheme for construction trade apprentices), who can be counted as a new entrant for up to 104 weeks; a professional trainee (post primary degree or equivalent) that is registered with an appropriate professional body who can be counted as a new entrant for up to 104 weeks; an undergraduate student (or equivalent) working towards a primary degree and required by a university or college to undertake a placement in industry that can be counted as a new entrant for up to 52 weeks; or 6

7 Annex A - Model Clauses for BuySocialNI an other trainee, including but not limited to operatives, service and administrative roles, who can be counted as a new entrant for up to 52 weeks. The Contractor is to ensure that: no more than 50% of the New Entrant Trainee person-weeks will be provided by apprentices, students and professional trainees; at least 25% of the New Entrant Trainee person-weeks will be provided by apprentices; at least 50% of these apprentice and professional trainee person-weeks will be delivered by people that are newly-recruited to work on the contract - other people may be transferred on a permanent basis from other contracts or through a shared apprentice scheme. For each New Entrant Trainee the Contractor is to: provide them with the opportunity to obtain training and accreditation relevant to the tasks they are expected to perform; ask them if they would like to receive support with numeracy, literacy and information technology, and those that do must be put in contact with sources of training and accreditation for these essential skills; support them in undertaking training e.g. through flexible working arrangements, where practicable; and agree a training plan with the beneficiary and their training organisation within 4 weeks of the beneficiary commencing work on the contract. The Contractor is to pay the cost of training and accreditation/registration for all New Entrant Trainees either directly or through availing of public or industry sources that they identify. To help retention and broaden experience a New Entrant Trainee may, with the Employer's agreement, be utilised on sites other than that to which this contract relates for up to 20% of their New Entrant Trainee period. They can only be counted towards the outputs of one contract at a time. 7

8 Business in Education Annex A - Model Clauses for BuySocialNI Contracts to contain a requirement to support the development of people under the age of 25. Contracts to include a requirement that the Contractor either directly, or through the supply chain provides 2 person weeks of unpaid Work Experience, for each 1M of contract and pro-rata. Contracts to include a requirement that employment vacancies are widely notified to facilitate applications from skilled/ experienced workers who may be economically inactive. The Contractor works, and ensures that subcontractors work, as required, with education, training and job-search providers to support the development of people aged under 25. This includes but is not limited to: vocational talks; supporting the curriculum; workplace visits; unwaged Work Experience; and [Client Advisor / Project Manager is to add any additional/specific Employer requirements] Unpaid Work Experience The Contractor is to provide 2 weeks of unwaged placement opportunities per 1m in contract value (pro rata). The Contractor is to provide participants with meaningful work experience, training and development which will enhance their opportunities for future employment. Opportunities for skilled/ experienced workers The Contractor is to notify every employment vacancy, including those with subcontractors, to the Jobs and Benefits Offices in Northern Ireland and one or more organisations registered with the NICS Brokerage Portal [ and other organisations named or otherwise agreed for this purpose by the Employer. The Contractor is to ensure that its recruitment procedures and those of subcontractors should be avoided where applicants are mainly or wholly identified through the existing workforce or any other restricted group. The Contractor is to ensure that it and its subcontractors allow sufficient time for information on vacancies to be made available and applications submitted. 8

9 Contracts to include a requirement that the Contractor:- - Provides as a part of the first Buy Social Delivery Report its proposals for meeting the Targeted Recruitment and Training Requirements based on the Contractor s programme (see Table X of the Contractor s Sustainability Report Part X); and - Reports, at monthly intervals, on the number of Targeted Recruitment and Training person weeks actually delivered (see Table X of Contractor s Sustainability Report Part X). - Reports, at monthly intervals, on the number of work experience placements actually delivered; - Provides information on the numbers of individuals that have worked on the site (cumulative) that have a home post code matching that written into the KPI requirement, including New Entrant Trainees. The Contractor s Buy Social Delivery Report 9 Annex A - Model Clauses for BuySocialNI The Contractor provides within two weeks of the starting date / contract award, and each month thereafter a completed Buy Social Delivery Report to the Employer, using Table x within the Contractor s Sustainability Report Part x. The first such report should include the completion of the target spend profile and target programme for the delivery of New Entrant Trainee person-weeks, each to be agreed with the Employer's Project Manager. 5 days prior to each site meeting or contract review meeting the Contractor provides to the Employer a report setting out information for the following Key Performance Indicators (KPIs): the value of works invoiced to date; the total number of New Entrant Trainee person-weeks that have been delivered to date and the percentage this represents of the total required in accordance with the first Buy Social Delivery Report; the total number of unwaged work-experience weeks that have been delivered and a comparison with the maximum number required for the value of works invoiced; the number of people working on the project that have a home address (not a temporary accommodation address) in the [ ] post code area; and information on any special factors that have influenced the delivery of the New Entrant Trainee person-weeks, the work experience person-weeks; the vacancies being filled from the named sources, and the Business in Education contributions, and actions being undertaken to address any problems identified. The Contractor provides all information necessary, including obtaining it from subcontractors and agencies, and cooperates with the Project Manager to review progress on delivering the requirements for New Entrant Trainees and Business in Education.

10 Annex A - Model Clauses for BuySocialNI Progress on delivering the Targeted Recruitment and Training (TR&T) Requirements to be reviewed, by the Project Manager, under an agenda item on sustainability at each site meeting. Government Construction Client to work with the NICS Department or broker organisation to verify the eligibility of New Entrant Trainees and monitor delivery of unpaid work experience opportunities. Employer s right to check and verify information provided by the Contractor in relation to Targeted Recruitment and Training Requirements The Employer may check and verify the information provided by the Contractor in its Buy Social Delivery Report, which may include a request to meet with each beneficiary. The Contractor co-operates with and provides all information, including obtaining it from subcontractors and agencies, required by the Employer to carry out checking and verification of the Targeted Recruitment and Training requirements in the Contract. The Project Manager is to arrange for random checks to be carried out on the information supplied by the Contractor in its Buy Social Delivery Report. The purpose is to verify that the persons claimed as New Entrant Trainees can be confirmed as such by the relevant broker organisation, university or further education college. Note that Primary and Secondary Data Protection Agreements are required to facilitate checking and verification pro-formas are available and are to be included in the Works Information. 10

11 Annex A - Model Clauses for BuySocialNI Contracts to include the following requirements that are applicable to all New Entrant Trainees and those participating in unpaid Work Experience placements. General Health and safety and welfare of unemployed participants, apprentices, students and trainees. It is the responsibility of the Contractor to ensure that persons recruited or otherwise visiting the Site in relation to the Targeted Recruitment and Training Requirements has, or is supported to, obtain the necessary health and safety accreditation and appropriate personal protective equipment. The Contractor cooperates with suppliers and other agencies to inform the supplier s/agencies Health and Safety Risk Assessments. The Contractor provides all New Entrant Trainees, Work Experience participants and others visiting the Site in relation to Targeted Recruitment and Training and Work Experience with :- health and safety training in accordance with legislation and Buildsafe-NI ; personal protective equipment; insurance cover; include cover for people aged 16 and over; staff from employment and training organisations; and all other contractual and legislative requirements. Security clearance The Contractor arranges security clearance for all New Entrant Trainees and unpaid Work Experience/training participants to the same standard as all other personnel involved in the contract in accordance with the Works Information. 11

12 Annex A - Model Clauses for BuySocialNI Failure to deliver opportunities for the unemployed, apprentices, students and trainees. If the Contractor fails to deliver the requirements for New Entrant Trainees and the economically inactive set out in the Works Information this may result in the application of the protocol for dealing with poor contractor performance set out in Procurement Guidance Note 01/12 Contract Management Principles and Procedures This protocol takes a graduated approach to addressing poor performance affording the Contractor two opportunities to address serious delivery failure. However, in recognition of the potential consequences of repeated failure on behalf of contractors Departments, when considering grounds for exclusion in future contracts, may regard such repeated failure as evidence of significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract. This may amount to grounds for exclusion from future contracts. This could lead to the Contractor being excluded from all procurement competitions being undertaken by Centres of Procurement Expertise on behalf of bodies covered by the Northern Ireland Procurement Policy for a period of between twelve months and 3 years. Data Protection Agreement The Contractor, at contract award, is to enter into a Primary Data Protection Agreement with the Employer. This is to enable the sharing of personal information (provided in the Recruitment and Training Plan) from New Entrant Trainees and persons undertaking Work Experience for the purposes of checking and verification. The Contractor enters into a Secondary Data Protection Agreement, to the Primary Agreement, with all parties that it shares the information in its Training and Recruitment Plan. The Employer enters into a Secondary Data Protection Agreement, to the Primary Agreement, with all parties that it shares the information in the Contractor s Training 12

13 and Recruitment Plan. Annex A - Model Clauses for BuySocialNI If the Employer is to compile statistics using the information relating to Targeted Recruitment and Training and Work Experience placements supplied by the Contractor, no personal information is to be included in these reports. 13

14 CIFNI (2016)P01 ANNEX B Contractor s Sustainability Report (CSR) 1. The Contractor s Sustainability Report (CSR) is a standard spreadsheet template for the use by contractors and the CoPEs as a single source of reporting for each relevant construction contract. It will be submitted by the Contractor monthly and will incorporate the following sections as separate worksheets: A Project Details Worksheet The Contractor s Recruitment and Training Plan as required by the BuySocialNI construction model; A revised general report outlining progress implementation against the sustainability objectives; The Contractor s subcontractor report incorporating prompt payment information; The Government Construction Clients monthly Health and Safety Report; An etendersni Worksheet which contains a table of information which is automatically populated with relevant information from the other worksheets and represents the information that is to be carried forward to the etendersni Reporting Module; and A Control Worksheet which will be editable by the CoPE but remain hidden from the Contractor. 2. The report is context sensitive so that only those sustainability requirements relevant to the particular construction sector and cost thresholds set by the CoPE, in the Control Worksheet, are presented to the Contractor for consideration. This is controlled by the values entered into cells, C9, C10, C14 and C15, on the Project Details Worksheet under the headings named below: Contract Value Project Type Contract Award Date Contract Duration 3. The CSR is attached separately. 14

15 ANNEX C PROPOSALS TO PROTECT THE DELIVERY OF BUYSOCIALNI IN GOVERNMENT S CONSTRUCTION CONTRACTS 1.0 INTRODUCTION 1.1 The BuySocialNI model includes the provision of paid employment opportunities for new entrant trainees in construction contracts which have a value above 2m and civil engineering contracts which have a value above 4m. It also includes requirements for: unpaid work experience placements; notification of opportunities to Jobs and Benefits Offices for skilled/experienced workers; and contractors to work with education, training and job-search providers to support the development of people aged under The purpose of this paper is to provide a proposal as to how the cost to the Employer of the BuySocialNI requirements can be valued. This is so that a mechanism can be included within tender documentation so that a Contractor s failure to deliver the model s requirements can result in a proportionate reduction in the amount paid to it. 2.0 THE BUYSOCIALNI MODEL AND CONTRACTOR COSTS 2.1 The BuySocialNI model currently includes a proposal that each Contractor, as part of the procurement process, would provide a breakdown of its costs resulting from the application of the model. 3.0 APPLICATION OF THE UK NATIONAL MINIMUM WAGE RATES 3.1 Detail of the UK s National Minimum Wage (NMW) is provided in Table 1 below. The wage varies depending on the individual s age and whether or not the individual is an apprentice. 3.2 Table 1 UK s National Minimum Wage Rates 2015 / 2016 Year 21 and over Under 18 Apprentice* 2015 / 16 (current rate) *This rate is for apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age. The rates are usually updated every October - the current rates apply from October The NMW rates make no allowance for Employer s National Insurance or Pension Contributions. In order to estimate the true cost of employment to the Contractor, an uplift needs to be included for these along with an allowance for 15

16 16 DF1/15/ Government Procurement Services Meetings Construction Industry Forum NI Papers 2015 ANNEX C the Contractor s management, training and administration costs associated with the development of the new entrant trainee. 3.4 The following uplifts to the NMW rates are proposed to take account of these factors: Employer s National Insurance Contributions - 14% Employer s pension contributions - 5% Employer s management, training and admin - 10% Total uplift 29% 3.5 The revised NMW rates are shown in Table 2 below: Table 2 UK s National Minimum Wage Rates 2015 / 2016 Year 21 and over Under 18 Apprentice* 2015 / (current rate) NI uplift (14%) Pension Uplift (5%) Admin uplift (10%) Total It is proposed that these rates would be used when estimating the cost of BuySocialNI to the Contractor. They would also be used as a basis to determine a proportionate reduction in the amount paid to the Contractor if it fails to deliver its Recruitment and Training Plan. 4.0 APPLICATION TO A CONSTRUCTION CONTRACT 4.1 Using the BuySocialNI model, the Employer will be able to calculate the total number of paid employment weeks that should be delivered under the contract. For example, in a 10m building, 520 weeks of paid employment for new entrant trainees will be required (i.e. 52 weeks per million). 4.2 The Employer then includes a requirement for the delivery of 520 weeks of paid employment in its tender documentation, which each Contractor would be required to price. A schedule of rates for paid employment would be linked to this requirement within the NEC Contract s Works Information. These would be based on the uplifted NMW rates and would allow the Employer to treat failure to deliver this requirement as a defect. In accepting the defect the Employer could deduct an appropriate sum from the Contractor for each person week of paid employment that it fails to deliver. The contract would be structured so that this could be implemented even if the Contractor included zero cost for the delivery of paid employment opportunities in its tender.

17 ANNEX C 4.3 The schedule of rates would be as per Table 3 below. It is assumed that a person week equates to 7.4 hours per day in a 5 day week totalling 37 hours. Table 3 SCHEDULE OF RATES FOR NON DELIVERY OF BUYSOCIALNI Year 21 and over Under 18 Apprentice Uplifted / 16 NMW hourly rate Daily rate Weekly rate For example, if a Contractor committed to delivering 78 weeks of paid employment for an individual aged over 25, but actually only delivered 30 weeks, a sum of 14,532 (= 48 weeks x ) would be deducted from the amount due to it. This approach incentivises the Contractor to deliver its contractual requirements in respect of BuySocialNI and creates a level playing field for all Contractors tendering for the project. 5.0 CERTIFICATE OF DEFICIENT PERFORMANCE 5.1 If a Contractor fails to deliver its proposed Recruitment and Training Plan an additional sanction to the deduction of payment described above would also be applied. The Public Contracts Regulations 2015 permits a Contractor to be excluded from future procurements for a period of 3 years if it has shown significant or persistent deficiencies in the performance of a prior public contract. 5.2 A Contractor s failure to deliver its Recruitment and Training Plan would be treated as a significant deficiency. CPD is currently developing proposals for the introduction of a Certificate of Deficient Performance. This would compliment the existing Certificate of Unsatisfactory Performance. Receipt of the latter Certificate currently results in automatic exclusion of the Contractor from Government procurements for a period of 12 months. Whereas receipt of the Certificate of Deficient Performance would be considered by Government Clients in future procurements and may result in the exclusion of that Contractor, at the discretion of the relevant CoPE. 5.3 It is intended that a Contractor who fails to deliver its Recruitment and Training Plan would have payment deducted from it in accordance with the amounts described in Table 3. It would also receive a Certificate of Deficient Performance. 17 DF1/15/ Government Procurement Services Meetings Construction Industry Forum NI Papers 2015

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