During the meeting in Treviso 2019 we talked about tendering and commissioning of construction. The discussion aimed to examine the differences among EU countries, taking into account the specific situation of the social housing sector.
Across EU countries there are different commissioning processes. Sometimes even in the same country there are many different approaches depending on local regulation.
Generally, the price is the main driver taken into account in the commissioning process while in most cases sustainability standards are less considered or not mandatory.
There is a contract code for choosing the construction company. In the latest version of the Contract Code for tendering under 5,548 million € there are two different operating modes:
- Tendering < 200.000 € trade method with offers from 3 or more companies;
- Tendering > 200.000 € open method with public announcement.
In both cases offers with abnormal low price are excluded. The company that offers the lowest price wins.
For tendering under 40.000 € public companies can entrust the work directly to a construction company.
There are mandatory standards for energy saving for new or renovated building, due to national energy code, not specific for tendering. There aren’t mandatory standards for sustainability during the construction site.
Each Italian Region has its own rules. In Lombardy the only sustainability restriction concern energy performance and the storage of rainwater for reuse. In seismic areas there is the obligation to verify the response of the building to the predictable seismic stresses. Planning rules are increasingly focusing on reducing land use.
Social Housing Companies don’t have an in-house building company, but they contract the works to external companies. In most cases they are provided with an internal technical office, but in some projects they entrust to external experts the whole planning or part of it.
Except in special projects the only design standards concern energy performance, but normally sustainability requirements are not established in the decision of contract award.
Works are controlled by the internal works management of the companies. The construction management checks the supplies of the materials, the correct installation and the execution times. Checks are in accordance with ISO 9001.
After 2019 the national building standard is 85 kWh/m2year, given to primal energy source and region. This standard includes heating, hot water and electric power for real estate. There are different standards for different temperate areas. VarbergsBostad newbuild standard is 50 kWh/m2year.
There is a Swedish public procurement act. The planning process starts from the analysis of documentation, then bidding end exclusion process. In the procurement phase, after some preliminary checks, there is the decision of contract award and after the allocation. After contract starts the monitoring phase.
Some municipalities have requirements in the detailed planning on energy performance. In VarbergBostad there are some requirement on newbuilding in the detailed plans and in retrofit project they look at energy efficiency by doing LCC analysis. Individual metering systems are installed or prepared in retrofit projects where it is possible and in newbuildings on hot and cold water to try to encourage tenants to use less energy. In this way tenants can control the rent amount the cost of rent adjusting the quantity of hot water consumed.
VarbergsBostad doesn’t have an own construction company and haven’t internal architects, but they have project management and energy engineering competence. The key is cooperation between architects, constructor, contractors and other project participants to reach the requirement that they have in each project and to determinate these on an early stage. VarbergsBostad made frame agreements with key consultants such as architects to enable a good and productive cooperation. They tried different ways to contract entrepreneurs, with more controlled procurement and a lot of documents, to a more open way with partnering where the entrepreneurs are involved at an early stage. They fixed price for architects, construction works and all involved subject, in this way there is competition without influence on different prices.
Swedish approach is based on three different stages:
- Stage 1 – Programming stage: basic decisions are taken regarding the size of the building, the technical standards and design.
- Stage 2 –Design development stage: technical systems, materials and requirements of the project are determinate; the documentation provides a summary of the planned building, its constructive design and its technical installation systems; the environmental plan and work environmental plan are fixed at this stage. This is the most common stage for contracting.
- Stage 3 – Construction document: building documents present detailed designs.
After the third stage the physical production of the project’s buildings and facilities takes place.
Talking about sustainability there are some design standards considered. The size of windows and other enclosing areas of the building is considered in the design process; requirements on all enclosed area an approximate u-value of 0,4 W/ m2, K (on windows 0,8 W/m2K ). Indoor temperature is regulated to 20-26°C. VarbergsBostad has documented all environmental requirement (national, local and own) in one document called “Environmental Program” that is customized to each project and enclosed with the procurement documents.
VarbergsBostad uses a sustainability standard called FEBY which has a requirement of 50 kWh/m2year. There are also requirements on acoustics, daylight, temperature and measurement on energy efficiency.Requirements are usually none optional and not evaluated separately.
Talking about monitoring they involved surveyors in each category on an early stage and let them review the building documents and do early inspections to try and prevent mistakes and faults. After two years they do an energy declaration of the building to follow up the results.
There are different procedures for public and private companies. Private companies have to regard rules for tendering procedure that are defined in “Verdingungsordnungfür das Bauwesen”(VOB), the number of companies that can ask for a bid is limited and bids can be negotiated. Public companies have to regard the stricter “Vergabeverordnung des Bundes”, tendering procedure are very formal and negotiation is not possible.
In tendering process 60% of the criteria is the price, but this lead to the choice of the cheapest company that could lead to less quality. Most of the time the cheapest price wins, because public companies have to justify the choice.
There is no regulation for sustainability-levels in private bidding. Public tenders have to regard “LeitfadennachhaltigesBauen” although advices offered are not mandatory. On regional level regulation for sustainable construction can be more elaborated. The City of Bremen for example demands higher standards in energy efficiency for public buildings and want to put a stricter directive for sustainable construction into place (e.g. green roofs).
The Social Housing Company approach for tendering try to gather experiences with design and build schemes for new construction, but usually it’s build only tenders with external architects. In retrofit projects there are only build tenders. Gewoba doesn’t have an in-house construction team, this is very uncommon for German housing company.
Regarding design standard Gewoba is incorporating the NaWoh certification process into its planning process. This is a smaller version of DGNB adjusted to the needs of housing. DGNB is the main big sustainability certificate in Germany. NaWoh criteria define the design standards of Gewoba. When it comes to biding Gewoba demands the use of building materials that comply with “Blauer Engel”, a seal that guarantees that materials are emission-free.
In normal construction projects the significance of sustainability is rather low compared to cost and other factors.
Gewoba usually uses external quality manager to ensure the quality of construction.
The tendering procedure starts from an open tendering, where any company can submit a tender, the response is very broad. Then there is a selective tendering from a list of approved contractors, who have proven record of work in that sector. There is a negotiated tendering with a single supplier for very specialist types of work. Serial tenders based upon a Bill of Quantity of Schedule of Works allows multiple letting of contracts without the need for retendering. Framework tendering allows for multiple works to be tendered and then let on a call off basis. There are single stage tenders when all information regarding the contract is available prior to tendering. Two stage tenders are for complex large projects, where the initial bid allows the placement of an order subject to the final release of information which is developed during the second tender stage. There are public procurement for publicly subsidized project. All procurement must be OJEU compliant.
The only currency standard is building regulation, for both newbuilding and retrofit, without a specific sustainability standard. However the energy efficiency requirements in building regulation have improved over time (currently 96kWh/m2year for newbuild).
In England there is Building Regulation Part L that provides guidance on sustainability; Wales, Scotland and Northern Ireland have some variations.
Local authorities planning department have some powers to require Sustainability measures which go beyond building regulation e.g. “Merton Rule” which can require 10% of primary energy consumption to come from renewable energy sources, leading to the installation of PV panels on some homes.
Regarding the tendering company approach, Accord tenders their own new build and retrofit work to an approved select list of contractors, but also tenders for other housing association new build work on a negotiated basis. Syha tenders new build to the open market, but usually work with an approved select list of contactors for retrofit; for large contracts would be tendered to the open market through their e-procurement portal.
Accord has an in house architectural team to design. Syha previously had own architects, but now they stipulate design and build contracts.
Syha doesn’t have an in house construction team. In Accord Construction Services is the in house delivery arm of 60% of company’s work and LoCal Homes is the off-site manufacturing arm for Accord’s developments.
Regarding sustainability standards Syha follows current regulation, but aims to have better standards. There are few little employer’s requirements that includes measures such as LED lighting, the requirement for natural cross ventilation and outside clothes drying areas.
Accord strive to design above the current building regulation, making their own project more affordable homes to live in. Accord expect their supply chain to hold or comply with the standards set out in ISO14001. Small/Medium contractors must be supported by Accord in delivering to these standards as they may be too onerous to achieve in their own right.
Syha doesn’t have a particular design standard for homes, but currently takes into account the “Home Quality Market”. In the decision of contract award sustainability is not very high on the list, but is gaining prominence. Cost remain the primary driver.
Accord has own design standards such as: end user affordability, reduce maintenance, design quality, buildability, off site construction whenever practical. Sustainability supports affordable homes and therefore factors highly in our financial decisions when setting budgets and awarding contracts.
Both Accord and Syha employ Clerk of Works to monitor build quality.
European open tendering procedure is effective for any project which cost is above 5 millions €, there is an adapted procedure proper to each company in smaller projects (local open tendering, local or restrictive competitive bidding etc.).
The national standard for new building is built on three pillars: building efficiency (considering lighting, cooling and heating), energy consumption of the building and cooling estimated efficiency during summer. There aren’t any standards for retrofitting, but fund granters ask for al less C or D CEP consumption level as a minimum.
Until the first April 2019 in France they have been referring to one of the two regulations tendering available in the social housing sector, but now those two regulations have been merged, called the CCP for “Code de la CommandePublique” a kind of public commissioning of construction. The standard for newbuild is currently under review and there are many of experimental project develop according to the E plus C minus standard that foreshadows the next thermal regulation RT2020 ; this regulation in addition to fix a lower energy consumption will focus to the CO2 consumption during the life cycle of the building including CO2 consumption to build and demolish the building.
There are local regulations at regional and city levels; at city-council level there are localization rules related by proximity to public transport, school, local density etc. Local regulations for newbuilding and retrofitting encourage the use of bio-sourced or low ecological footprint materials, but generally sustainability standards are under construction and there might be sometimes problems with construction insurance coverage to use some specific technology or materials.
FSM tenders for architects and designers in biggest project or most sensible projects, they don’t have an in-house design or construction team. After the recruiting of architects and engineering team, they give them the general program for construction which specifies the minimum performance to reach.
National and local rules are incorporated in the projects, moreover FSM incorporates national quality certification (Qualitel). In addition to that they take stock especially on the materials life cycle or bio-sourced materials employment and decide what can be incorporated in the construction. The cost of some bio sourced material is very high because of the supply-chain so the company can’t afford them without national, local or European subsidies.
FSM works on its own quality standard design, looking forward to September 2019, to earn an own Quality Specifications process and additionally an in-progress checking tool.
The importance of sustainability in the decision of contract award is growing through quality aspects in relation with sustainability. It could grow more through the next 2021 national regulation taking Carbon Footprint into account.
FSM has 2 clerks of work for new building constructions and 1 dedicated to refurbishments. They have to monitor that the company specifications are properly integrated in the building during the construction process. The company will be able to present a “FSM specifications checking tool” for design and construction process” soon (September-December 2019).