1. Framework Benchmarking – Hampshire’s Approach NHT Performance Benchmarking Group Members Meeting 20th June 2012 David Ryder

2. Contents An Introduction to the Frameworks we operate in HCC What we measure on each and how this provides incentives for better project performance by partners: KPI (Quantitative Measures) KSI (Qualitative Measures) Where EContrack helps Future Developments : Improvements proposed in collecting KPI and KSI Measures within Hampshire Questions

3. Historically, HCC have operated frameworks for: Specialist Design/ Supervision IESE Professional Services Contract (PSC) Contractor Procurement: HCC Term Highways Contract (Ongoing) HCC Improvement Framework 1 (2008 – 2012) – Straightforward Works HCC Improvement Framework 2 (2008 – 2012) – Complex Highway and Structural Works HCC have now embarked on wider-ranging contractor procurement frameworks that span the South East of England (SE7) for 2012 - 2016 SE7 Sub-Regional Framework – Straightforward Highways Works SE7 Regional Framework – Complex Highway and Structural Works Measures have evolved as each new framework has been put in place. An Introduction to the Frameworks we operate

4. Each contract feeds into an incentive-based KPI system Better performance = advantage in tendering -10% decrease in tendered price (GREEN ZONE) Average Performance = no advantage/ disadvantage – 0% gain (AMBER ZONE) Poor performance = disadvantage in tendering – 10% increase in tendered price (RED ZONE) Zones are evaluated quarterly based on that quarter’s performance i.e. end of Q1 for Q1 Evaluated Zones used for the next performance quarter to evaluate tenders i.e. Q2 Potential for a badly performing contractor/ designer to be at a very big disadvantage to a well performing supplier for the whole of the next quarter. It is therefore important to keep performance high to ensure continuing workload Why measure performance?

5. There are a range of KPI and KSi indicators that we measure: Contractual KPI Measures Non-Contractual KPI Measures Non-Contractual KSI Score Link Measures It is only the Contractual KPI measures that define Zones. The rest are used for feedback for active project management purposes What we measure (1)

6. Contractual KPIs What we measure (2) TitleDefinition Minimum KPI value Stretching KPI value Right First Time Percentage of Work Packages completed without the need for a return to Site after the date of Completion and any associated defect correction period. 50%100% Predictability of time Average percentage variance between agreed Work Package start/end dates and actual start/end dates 25%5% Accuracy of payment submission Average percentage of the Supplier ’ s claims for payment that are ultimately agreed by the Employer within ±5% of the initially claimed amount 70%100% Site Health & Safety Inspections Performance Average score by the Supplier for the standard site Health and Safety Inspections 25100 Site Health & Safety Inspections Rate Percentage of required Heath and Safety Inspections undertaken 80%100% Response to Health & Safety Issues Percentage of required Health and Safety Action Reports received within stipulated timeframe 80%100% Framework Management Reporting Percentage of KPI data required of the Supplier that is provided within the stipulated timescales 80%100%

7. All of the Contractual KPI feature ‘Minimum’ and ‘Stretching’ values on their scales Actual KPI values will be converted to a ‘Standardised’ 0 – 100 scale and averaged across the board. Total score then dictates Zone: 0 - 24 - RED 25 - 74 - AMBER 75 and above - GREEN Note: Scores are also adjusted by a “sensitivity factor” depending on number of KPIs taken: Less scorecards - more highly sensitive to erroneous measures– evaluated no lower than AMBER More scorecards – more accurate – full range utilised What we measure (3)

8. Non-Contractual KPIs The performance of the Employer and the Contractor against the non-contractual KPI has no effect on the calculation of the Performance Level. Performance against these KPI shall be reviewed by the Framework Board. What we measure (4) Title DescriptionTarget KPI score Employer Responsiveness to payments Percentage of Contractor payments made by the Employer within 28 days of signing of the Certificate of Payment 100 Contractor Satisfaction Level of the Contractor ’ s satisfaction with the performance of the Employer 80 Employer Satisfaction Level of the Employer ’ s satisfaction with the quality of product, service and health and safety delivered by the Contractor 75

9. The range of KSI measures include: Satisfaction of Product – How appropriate is the solution? Does the project deliver it’s outcomes? How well built is it? Is it suitable for purpose? Satisfaction of Service – 360 degree measure of performance of all parties to a scheme i.e. Employer, Site Staff, Designer, Contractor Health and Safety – How important is the H&S culture in the team? Traffic Management suitability. Effective Pedestrian Management? KSIs are measured using Scorelinks at appropriate times during the project. This info should be no surprise, however will enable parties to respond to keep project on track What we measure (5) ProfessionalismCreativityResponsiveness ManagementKnowledgePR Management ClarityAttitudePro-activeness

10. Capture : Contractual KPIs and KSIs are input to the database using recognised clearly defined measures by the relevant team Automation: Originally Zone Calculations were done manually – Now done automatically by the EContrack database, so no ambiguity Visibility :Background data and results are reported to each individual company via bespoke company report via e-link Action : Web-portals fed by EContrack used by both Client and Suppliers - information and performance discussed at quarterly meetings and expected to be acted upon Where EContrack helps

11. Whilst measures are being successfully collected on a contractual basis from the frameworks, internal team benchmarking is not so robust despite being linked to individual staff performance reviewing Data is sometimes not reported in a timely manner at end of key project stages. A lot of time is spent chasing for information and is therefore resource intensive and there is no ownership. Limited data or lack of data drives lack of feedback to teams Lack of feedback is resulting in lack of enthusiasm in respect to design KPI measurement – seen as an extra rather than an essential to drive better performance It is a cycle we are keen to break! Current Benchmarking Issues

12. There is a proposal to export KPIs and KSIs to the Econtrack database via Project Management Software (ProjectVision & Confirm) thereby lightening reporting workload for managers. Timely data collection would be auto-triggered by project stage achievement. Expansion and review of measurement metric scope to ensure data is relevant and drives improvement. What isn’t relevant would be removed, what is relevant would be kept and new measures defined that aid in improvement. The NHT Network is there to help in all the above, and as an ongoing group member, we are keen to maximise our involvement to help in this process Future Developments

13. Questions?