Industry News: public sector construction procurement

 

For any contractor or supplier involved in the design, construction or maintenance of public buildings or infrastructure, a series of announcements and reports over recent months on procurement issues will be of interest. Together, they set out the direction of travel for procurement and the use of frameworks, particularly in England, and will filter changes through from central to local government projects.

One of the first documents to make waves before Christmas was the government’s official response to a consultation on its 2020 green paper on ‘Transforming Public Procurement’.

The government’s stated goal is to speed up and simplify procurement processes, place value for money at their heart, and unleash opportunities for small businesses, charities and social enterprises to innovate in public service delivery. Consequently, the consultation response sets out a clear intention to move to more consistent, transparent, and socially-led frameworks.

While relevant to all procurement, not just that linked to housing, construction or infrastructure, the government’s thinking does have significant ramifications for our sector. For example, it delivers a fundamental change in the evaluation criteria for bids, from the ‘Most Economically Advantageous Tender’ to ‘Most Advantageous Tender’. This reinforces the message from numerous Cabinet Office procurement policy notes over the past few years that contracting authorities need to take a more holistic approach to evaluation. This change has particular resonance for construction work post-Grenfell, given the industry’s plea for clients to stop the scourge of ‘value engineering’ that encourages a race to the bottom and drives everything down to lowest cost.

The proposed reforms are still a work in progress, requiring further consideration and detail, but they propose slashing 350+ regulations governing public procurement and integrating the current regulations into a single, uniform framework. If this can be achieved, it should spell many benefits for SMEs in particular who are otherwise put off by the complexity and confusion of bidding for public sector work.

At the end of the last year another pivotal report was published. Professor David Mosey, a legal expert at King’s College London, published his independent report and recommendations on the future of public sector construction frameworks.

Constructing the Gold Standard’ was the result of many discussions with clients, suppliers, advisers and procurement specialists. Commissioned by the Cabinet Office, the report’s 24 recommendations look at how construction frameworks can be better run and more efficient. And given that, according to Build UK, an average of 40 per cent of its members’ income had come from frameworks over the past five years, with the figure rising to 75 per cent in some cases, it’s clear that these changes could make quite an impact on the industry.

Most important of all, Mosey calls upon all parties – including framework providers, clients, contractors and the whole supply chain – to “work together to tackle waste, secure value for money and drive innovation to achieve better, faster, safer and greener outcomes.” Early supply chain involvement is crucial, along with new forms of contracts that encourage collaboration.

A similar theme is repeated in Mosey’s most recent report, on collaborative procurement for design and construction to support building safety. Written on behalf of another government department (DLUHC), this report gives an overview of the ways in which collaborative procurement can lead to safer, better-quality outcomes, and it explains how clients and their project teams can use collaborative procurement in practice.

As it explains: “Collaborative approaches have been proven to succeed in reducing risks and improving value on construction projects in the public sector and the private sector. These approaches should be adopted on all construction projects, and the Guidance shows why it is essential to adopt them on projects that are ‘in-scope’ of the new regulatory regime that will be introduced through the government’s Building Safety Bill...”

The guidance shows how collaborative procurement preserves reasonable legal and commercial protections while using early planning, clear roles, full consultation and accurate information to reduce the potential for failures, errors, misunderstandings and disputes.

According to government statements, such improved procurement practices are needed to deliver better, faster and greener solutions that support our recovery from the COVID-19 pandemic and to build the economy of the future while improving building and workplace safety.

Expect to see these themes reflected in a project coming your way soon.

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