CCIC Complex Challenges Innovative Cities Best Practice Description Template This version is suitable for printing. Name of person filling Position René Bartels Project Manager ISE Municipality of Eindhoven Contact details This template is designed to guide you through the process of describing a local/regional innovation-related practice that you know either because of direct involvement, or through observation. Each CCIC partner (a local or regional authority, or subsidiary of one) is requested to complete 4 such templates. The summarized information will be used in thematic group discussions, as well as to increase partners awareness of good innovation practices across the different regions. No question requires lengthy input. Focus on description, not on analysis. Be concise and clear, and check if your answer really matches the question(s) asked. You are advised to answer all of the questions in order to guarantee a complete description. Where you do not have the required information, try to identify a reliable and credible source, who could provide the missing details, and quote that in the description of the practice. Every time you rely on a source, please specify at least their position and/or organization. Names, or other personally identifiable information, are not necessary. Under question 15 you may add any other relevant information that you consider important, but missing from the rest of the questions. Question 1. Name of the practice (can be a one-sentence description, to be used for future referrals). Also include a web link, if available 2. In which of the four thematic groups would this practice fit the best? What other policy areas, if any, are related? Please write any other policy area that you find to be influenced by the particular innovation. No further details are necessary. Answer Campus International School Eindhoven (ISE) DBFMO tender (Design, Build, Finance, Maintain and Operate). Innovative financial instruments Public Procurement and Innovation Page of 6 1
CCIC Complex Challenges Innovative Cities Best Practice Description Template This version is suitable for printing. Question 3. What is it that makes your organisation believe this practice represents an innovation? Please state reasons why the practice represents an innovation, according to your organisation Answer This DBFMO tender procedure (Design, Build, Finance, Maintain and Operate) is innovative within Public Private Partnerships (PPP) for local authorities and innovative with regard to school buildings (this is the 2 nd School in the Netherlands). With an exploitation period of 30 years, a lot of innovation is required in design and building. This necessity for innovation is in this form not only required by the client (in this case BREEAM-NL), but it will also help to achieve to get all disciplines, from design to for example maintenance, catering or cleaning services, to sit together from the beginning, what will lead to shared creative and innovative solutions because of their own responsibilities for these 30 years of exploitation. The chosen innovative tender procedure with a focus on competitive dialogue enables you to attain together with the participating consortiums a high innovative level of the design. 4. What change in the external environment resulted from the innovation in question? What problem(s) did it address? What was the initial status of the problem(s) it addressed? Describe what changed (in terms of impact produced in the external environment) as a result of this practice try to specifically link a problem, and identify how this problem has been solved in terms of results achieved. The current locations of the two schools, primary and secondary education, where too old and too small. Furthermore, the municipality was in possession of an empty state-owned monumental barrack. Traditionally, this project was too expensive, but through PPP/DBFMO the project was affordable and realizable. Public-private partnerships are expected to help control the cost of construction projects and provide opportunities for innovation. Page of 6 2
CCIC Complex Challenges Innovative Cities Best Practice Description Template This version is suitable for printing. Question 5. What were the main motivations behind proposing the innovation? Share briefly what factors motivated the implementation of the particular innovation external pressure, political decision, economic/social analysis, NGO proposals or demands, management reorganization, any inefficiencies, etc. 6. Which organisation initiated the innovation process? Was it initiated by an actor from outside or from inside the organisation? Who were the innovations champions inside the organisation? How did they interact with champions from other organisations involved, if there were any? Describe whether the innovation was conceived internally within the organization or prompted from an external actor. Mention all those who worked to promote the innovation within the organization ( champions ). Answer Besides the financial reasons mentioned before, there were many challenges within this project which made an integrated approach necessary: new constructions, renovation (preservation of monuments), urban renewal, detection of bombs and ammunition, fauna and flora An integrated approach is the keyword for DBFMO tenders. DBFMO is the core of public-private partnerships. The DBFMO model covers the entire process, from the production of a design to a fully operational building with all the associated services. The idea behind this integrated approach is that better and most likely cheaper housing can be developed when the consequences of a particular design are thoroughly examined in the early stages of the development process. Lifecycle costs can be reduced when investment and exploitation costs are brought in line with one another. The municipality of Eindhoven together with the Foundation Primary and Secondary Education Southern Netherlands (Stichting Primair en Voortgezet Onderwijs Zuid-Nederland). Both organizations first tried to carry the project out the traditional way, but decided afterwards to publish a DBFMO tender. Page of 6 3
CCIC Complex Challenges Innovative Cities Best Practice Description Template This version is suitable for printing. Question 7. Which institutions, organisations and social groups would be considered stakeholders (that benefit from the implementation of this innovation)? What are their respective stakes? Identify stakeholders involved both internal (such as a Department Head) and external (businesses, national political institution, citizens organisations or groups), as well as how benefits from the innovation are distributed across them. Answer The International School Eindhoven (ISE) is a project that on the one hand looks after an upgrading of education. The project takes care of an excellent model of international education, complying with the highest international standards. On the other hand, ISE is an impulse for the regional economy. The ISE will increase the power of attraction of the region for knowledge workers (expats) and it will also bring up an international community for this group of people. Besides the municipality of Eindhoven and the Foundation Primary and Secondary Education Southern Netherlands there are several other organizations that contribute to this project: - Campus municipalities Veldhoven, Helmond and Best (three border municipalities of Eindhoven); - Regional businesses - The Cityregion Eindhoven (SRE) - The province of North-Brabant - The Ministry of Economic Affairs and Finance - The consortium Van Straten Groep/Complan: this consortium has been selected through a European tender and is responsible for the Design, the Building, Finance, Maintenance and Operation of the ISE for a period of 30 years. This consortium consists of 17 parties. 8. How was politicalsupport built, and why was it necessary (or why was it not)? What challenges had to be resolved? How was the public involved? Attempt to define the political factors influencing the realization of the innovation, as well as why was it necessary if at all to seek political support. Mention if citizens were involved as a political actor (i.e. to demonstrate public demand) and how. The role of political support was necessary to express the emergency of this project and with that obtain the needed financial issues. There was no role for the citizens, although the neighbours of the historical monument where the campus is being developed have been involved in the project since the start. Page of 6 4
CCIC Complex Challenges Innovative Cities Best Practice Description Template This version is suitable for printing. Question 9. What lessons were learned during the innovation planning phase? Try to address specific knowledge acquired while planning the innovation with regard to local systems, stakeholder relationships, political pressures, etc. Elaborate specific policy conclusions with regard to the innovation planning phase. 10. What changes, if any, were introduced in the organisationas a result? Were different policies adopted (to sustain the innovation)? Were structural changes made? Describe specifically if the implementation of this practice also resulted in internal changes within the organization, and what prompted them. Address both structural/management and internal policy changes, if any. 11. What could have been done differently to strengthen the accomplishments of the innovation? Give specific examples what makes the innovation success, and think specifically about what could have been done differently to strengthen that success, i.e earlier start, involvement of other stakeholders, different communication strategy, etc. 12. What procedures have been used for the evaluation of the innovation's impact, if any? If none were used, why? Comment on how the practice has been evaluated, if at all (i.e. through surveys, interviews, benchmarking, etc.; was there an external consultant involved or was it done only in house). If it were not formally evaluated, comment on how and who determined if the practice is a success, and in what terms. Answer The DBFMO tender procedure is an integrated approach and it s important to involve as many parties as possible at the front side in order to avoid damaging factors during the process. Mostly the financial part of DBFMO is a difficult component. There have been some changes for issues like the comprehensiveness of the project, the contract management and the way of working on the project. Mainly with regard to the contract management and in response to the 30 years of exploitation, a structural embedding within the municipal organization is needed. In the case of ISE this process has been started and it needs to be finished before the delivery of the ISE in August 2013. Start with appointing and involving all the parties earlier in the process. The evaluation is taking place in this moment. In any case, a PPP contract revolves around responsibility: the responsibility of a private sector party that promises to provide the agreed services and is held to account for its performance. In a PPP contract, payments are made on the basis of the services that have actually been provided. A discount applies if the performance is not up to par. This ensures a high quality of the delivery. Page of 6 5
CCIC Complex Challenges Innovative Cities Best Practice Description Template This version is suitable for printing. Question 13. Has the innovation been recognised externally by an independent entity (one that has not been involved in the planning and/or implementation phases), by means of, for example, a public award or a detailed media publication? Mention any form of formal recognition about the innovative status of this practice that you are aware of. Especially relevant are acts of recognition coming from an NGO or a reputable international organization. 14. Has the idea for the innovation been borrowed from another successfully implemented experience? If yes, how did the adopting institution learn about it? If this was an original idea, has there been interest from other parties/entities (besides CCIC) about its application? In case you are aware, please comment if this practice was transferred from another source and how was knowledge about it shared. 15. Other comments Please include any other information, which you consider relevant and important for this practice, but has not been already covered by previous questions. Answer A certification will take place soon in case of the ISE project with regard to BREEAM-NL, an official scheme for labeling buildings. Besides that, the project has received a lot of attention in the press and there have been made several publications on the project. Furthermore, the topic has also been discussed at many conferences and seminars on PPP. This is a pilot project. The first school in the Netherlands that used the DBFMO tender process was the Montaigne School in The Hague, but there has not yet been published much information on their experiences. DBFMO is actually an initiative of the Central Government, the Government Buildings Agency, and Centre for Water Management of the Government, and was mostly used in infrastructural works. In this moment, there is a lot of interest in the ISE from other organizations. http://www.rgd.nl/english/public-private-partnership-ppp/ Page of 6 6
Thematic group meeting 2 Public Procurement and Innovation 13 th February 2013 Warsaw, Poland
DBFMO Campus International School Eindhoven (ISE) DBFMO is a tender procedure used within Public Private Partnerships (PPP). DBFMO = Design, Build, Finance, Maintain & Operate. A Public procurement process where: 1. Private party finances design and realisation of the object, 2. And receives a performance dependent compensation for facility management and maintenance of the object.
What s innovative about DBFMO? DBFMO so far mostly at national level. Only few local contracts, and only one school (The Hague). With an exploitation period of 20-30 years, innovation is required in design and building. Contractors have a shared responsibility for up to 30 years. This forces them take account of the full life cycle of the object, leading to greater care as they will be confronted with the consequences of their decisions. DBFMO, should realise better buildings at a lower cost. Private financing
Challenge addressed Eindhoven wanted an international campus at an empty state-owned monumental army barrack. Using a traditional approach, this project would have been too expensive. PPP/DBFMO made the project affordable and realizable. Public-private partnerships are expected to help control the cost of construction projects, avoid unexpected surprises and provide opportunities for innovation.
Internal External and factors that motivated DBFMO in Eindhoven Challenges requiring an integrated approach: Existing monumental location in protected area Project combining renovation and new construction Flexibility needed due to uncertain development of pupil numbers Housing of different types of schools Different interests School and City Keyword of DBFMO = integrated approach. It covers the entire process, from the production of a design to a fully operational building with all the associated services. Integrated approach for better and cheaper housing because the consequences of a particular design are thoroughly examined in the early stages of the development process. Reduction of lifecycle costs when investment and exploitation costs are brought in line with one another.
Stakeholders and Involvement of the public Stakeholders: Municipality of Eindhoven The Foundation Primary and Secondary Education Southern Netherlands and Campus municipalities Veldhoven, Helmond and Best (three border municipalities of Eindhoven); Regional businesses The City-region Eindhoven (SRE) The province of North-Brabant The Ministry of Economic Affairs and Finance The consortium Van Straten Groep/Complan: consortium selected through a European tender and is responsible for the DBFMO of the ISE for a period of 30 years. This consortium consists of 17 parties. International businesses in the region due to expat children using the ISE Public involvement: There was no role for the citizens, only those living in neighbourhood of ISE were informed.
Political support building The role of political support was necessary: The project is politically crucial in line with the character of Eindhoven as innovative, high tech region. To be able to attract knowledge workers for local industry globally, an attractive educational option is essential. To highlight the necessity of this project for the continued economic success of the region; To ensure the necessary financial means in a climate that has drastically changed in recent years.
Critical issues The spatial development plan is the Bible. Ensure that the framework is clear from the start. Involve all relevant parties at the earliest possible stage, in order to avoid damaging factors during the process. Mostly the financial and risk sharing elements of DBFMO remain difficult components. Questions remain concerning the democratic responsibility of government vis-à-vis the outsourcing of service delivery
Positive DBFMO is cheaper Shift from investment to life cycle thinking All parties included in development from the start Competitive dialogue and 30 yr exploitation, cause more creativity, quality and innovation in the design Commercial exploitation financial benefits Take better account of future developments Good quality ensured due to fact that payment depends on delivery of high level of service Certainty about cost aspects in long term due to set contract.
But take care DBFMO includes higher VAT cost, because consortium takes up VAT free tasks of the school Interest rates applied to local government is not equal to market interests Business and financial sector have little experience with the F - in DBFMO and are likely to charge for the unkowns In the implementation phase there ust be room for adaptation, certainly in the case of renovation of a monument Business still thinks rather tradional in the implementation phase
Impact of the project to the organisation The City administration as well as the school board had to change their frame of mind to think along the DBFMO approach. And we thought we had it sorted after signing the contract. How wrong we were ;-) A project organisation remains needed. Mainly with regard to the contract management and in response to the 30 years of exploitation, a structural embedding within the municipal organization is needed.
Was the project a success? An independent third party has been following and will evaluate the project. In March/April 2013 a review with the general evaluation will published.
Thank you for your attention! Any questions????
Thematic group meeting 2 Public Procurement and Innovation 13 th February 2013 Warsaw, Poland
DBFMO Campus International School Eindhoven (ISE) DBFMO is a tender procedure used within Public Private Partnerships (PPP). DBFMO = Design, Build, Finance, Maintain & Operate. A Public procurement process where: 1. Private party finances design and realisation of the object, 2. And receives a performance dependent compensation for facility management and maintenance of the object.
What s innovative about DBFMO? DBFMO so far mostly at national level. Only few local contracts, and only one school (The Hague). With an exploitation period of 20-30 years, innovation is required in design and building. Contractors have a shared responsibility for up to 30 years. This forces them take account of the full life cycle of the object, leading to greater care as they will be confronted with the consequences of their decisions. DBFMO, should realise better buildings at a lower cost. Private financing
Challenge addressed Eindhoven wanted an international campus at an empty state-owned monumental army barrack. Using a traditional approach, this project would have been too expensive. PPP/DBFMO made the project affordable and realizable. Public-private partnerships are expected to help control the cost of construction projects, avoid unexpected surprises and provide opportunities for innovation.
Internal External and factors that motivated DBFMO in Eindhoven Challenges requiring an integrated approach: Existing monumental location in protected area Project combining renovation and new construction Flexibility needed due to uncertain development of pupil numbers Housing of different types of schools Different interests School and City Keyword of DBFMO = integrated approach. It covers the entire process, from the production of a design to a fully operational building with all the associated services. Integrated approach for better and cheaper housing because the consequences of a particular design are thoroughly examined in the early stages of the development process. Reduction of lifecycle costs when investment and exploitation costs are brought in line with one another.
Stakeholders and Involvement of the public Stakeholders: Municipality of Eindhoven The Foundation Primary and Secondary Education Southern Netherlands and Campus municipalities Veldhoven, Helmond and Best (three border municipalities of Eindhoven); Regional businesses The City-region Eindhoven (SRE) The province of North-Brabant The Ministry of Economic Affairs and Finance The consortium Van Straten Groep/Complan: consortium selected through a European tender and is responsible for the DBFMO of the ISE for a period of 30 years. This consortium consists of 17 parties. International businesses in the region due to expat children using the ISE Public involvement: There was no role for the citizens, only those living in neighbourhood of ISE were informed.
Political support building The role of political support was necessary: The project is politically crucial in line with the character of Eindhoven as innovative, high tech region. To be able to attract knowledge workers for local industry globally, an attractive educational option is essential. To highlight the necessity of this project for the continued economic success of the region; To ensure the necessary financial means in a climate that has drastically changed in recent years.
Critical issues The spatial development plan is the Bible. Ensure that the framework is clear from the start. Involve all relevant parties at the earliest possible stage, in order to avoid damaging factors during the process. Mostly the financial and risk sharing elements of DBFMO remain difficult components. Questions remain concerning the democratic responsibility of government vis-à-vis the outsourcing of service delivery
Positive DBFMO is cheaper Shift from investment to life cycle thinking All parties included in development from the start Competitive dialogue and 30 yr exploitation, cause more creativity, quality and innovation in the design Commercial exploitation financial benefits Take better account of future developments Good quality ensured due to fact that payment depends on delivery of high level of service Certainty about cost aspects in long term due to set contract.
But take care DBFMO includes higher VAT cost, because consortium takes up VAT free tasks of the school Interest rates applied to local government is not equal to market interests Business and financial sector have little experience with the F - in DBFMO and are likely to charge for the unkowns In the implementation phase there ust be room for adaptation, certainly in the case of renovation of a monument Business still thinks rather tradional in the implementation phase
Impact of the project to the organisation The City administration as well as the school board had to change their frame of mind to think along the DBFMO approach. And we thought we had it sorted after signing the contract. How wrong we were ;-) A project organisation remains needed. Mainly with regard to the contract management and in response to the 30 years of exploitation, a structural embedding within the municipal organization is needed.
Was the project a success? An independent third party has been following and will evaluate the project. In March/April 2013 a review with the general evaluation will published.
Thank you for your attention! Any questions????