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After decades of under investment, the NHS is aiming to bring its facilities in line with the needs of the 21st century. If the ambitious targets are met, by next year at least a quarter of the £3.1 billion maintenance backlog accumulated over the last 20 years will be cleared. By 2010, 40% of the value of the NHS estate will be under 15 years old.

Not all of this refurbishment and new build programme can be funded by the Private Finance Initiative (PFI). The Chancellor is prepared to reach into public funding for much of the capital programme – this is where Procure 21 fits into the plan.

Procure 21 is the route through which NHS Estates intends NHS Trusts in England to procure all their capital works projects over £1 million outside of PFI arrangements. This is expected to amount to around £1·4 billion of spend each year for the next five years. Plus, depending what is left of the concurrent Diagnostic Treatment Centre programme, another £200 million could be spent before 2005. It has been recommended to the Government that Procure 21 should be mandatory. If this is accepted, the Trusts will not be able to use traditional procurement techniques.

Procure 21 was piloted in the Midlands and North West regions of England in 2002. The beginning of 2003 saw the start of the process to select the teams for the national programme roll-out.

The same process is being used to choose the teams for the parallel Diagnostic Treatment Centre (DTC) programme, although it has recently been reported that two-thirds of the original 30 proposed DTCs will be privately financed outside of the Procure 21 framework.

Procure 21 – the aims
The objective of the Procure 21 programme is to deliver better capital procurement for the NHS in England. Adopting the principles of Sir John Egan's reports and the Treasury's Achieving excellence recommendations, the programme will consist of partnering frameworks intended to provide better value for money, improved quality and increased performance in time and productivity.

The principal supply chain partners will work under target cost contracts and be motivated by opportunities for sharing gain as well as 'pain'. It is anticipated that by partnering with consistent integrated supply chains over the five-year framework periods, the teams will develop and continuously improve best practice for the delivery of health care facilities.

For the principal supply chain partners and their teams, the incentive is the opportunity to gain experience in a partnering environment that is expected to become the hallmark of public sector construction. As well as opportunities for developing supply chain partnering skills, the frameworks should offer greater commercial certainty during each stage of selection, design and build. Although there are no guarantees of work for the various supply chains or their team members, the current economic climate makes this share of the public sector spend very attractive.

The implications
The final teams selected are likely to be, in the main, the larger building contractors or consortia assembled to ensure sufficient resource with full national coverage.

Each principal supply chain partner had to declare a supply chain with core members – dubbed principal supply chain members – covering the disciplines of architecture, health care planning, construction, cost management, fm, m&e services design and installation.

All include several m&e contractors in their supply chains and these organisations will be expected to work in partnership to contribute to the continuous improvement of the entire team. While a large part of the pre-qualification process concerns detailing partnering experience across the supply chains, working together to complete the pre-qualification questionnaires is a practical example of teamwork in itself.

Pre-qualification details were submitted entirely online and consisted of two sets of questions. Scored questions were completed by the principal partners after consultation with their members, while information questions were completed by those members directly. This was done over a NHS web site with password access being given to all team members by the majority of principal partners. This process itself illustrates two very important characteristics of Procure 21.

First, the importance of IT and collaboration systems. From the start of the process, IT has been at the fore. The scored questions contain several references to how IT will benefit projects and be integrated across the supply chain. The Memorandum of information for Procure 21 also states: "Successful partners will undertake to guarantee to NHS Estates that within two years of the start of the Framework Agreement they will commit to total electronic trading. They will further undertake that within one year of this date they will ensure the whole supply chain will trade electronically."

Second, the openness of the information questions highlights the spirit of partnering that will be expected throughout the programme. Each member of a supply chain can see all of the details put forward by the other supply chain members. This could be seen as a foretaste of things to come with sharing of best practice ideas across and between supply chains.

The benefits
To benefit from the work, m&e contractors must embrace the cultural changes required to openly share best practice and innovative ideas with competitors through the framework winning process and the life of the framework.

This is in a kind of parallel universe to the one in which all are competing as hard as ever for traditional work. Innovation will be a key issue, with NHS Estates expecting to benefit from standardisation, prefabrication and modular solutions wherever appropriate. Experience has demonstrated how early collaboration and mutual goals bring project programme, quality and value benefits to clients.

Successful m&e contractors will have to handle broader issues than design, installation and commissioning. The open book process followed by Procure 21 projects will put a demanding administrative load on partners. Some effort will also be expended on the comprehensive benchmarking and KPI systems being assembled by NHS Estates, which are designed to measure effectiveness of partnering as well as project performance.

Although the integration of the supply chain is designed to produce leaner construction and design out inefficiency, NHS Estates believe that m&e contractors can expect the principal partners to take on some of the administrative load.

To achieve success in Procure 21, a m&e contractor must have a thorough understanding of the needs of the modern NHS and be able to demonstrate in-depth experience of meeting those needs. A history of introducing project delivery improvements through partnering and innovation is also important to securing a framework place. To effectively contribute to the team, contractors must be able to harness the resources of their own supply chains.

All in all, the prospect of a regular stream of work along with the opportunity to benefit from continuous improvement while working with a client committed to a 'Best Client' philosophy, makes Procure 21 a coveted goal for any major industry player.