Charles Mills, chair of the Constructing Excellence Procurement theme group, and programme manager at TfL, on what happens to public sector tendering in the wake of Brexit.
This article was first published on the Constructing Excellence website.
The government has announced a working group to review the impact of Brexit on our sector. Issues such as free movement of labour and the effect of currency devaluation on the cost of materials have been widely debated.
But another important way in which the EU affects our sector is through the OJEU procurement rules which govern how the public sector must procure construction services, consultants and contractors.
The OJEU regulations generate a degree of transparency to the procurement process and have served to broaden the supplier pool from which the client can draw. The regulations have also driven the client community towards the greater use of frameworks which, when well conceived and managed, have delivered major savings for the public purse.
We therefore believe that it is helpful to have such a high-level process in place. Similarly, other regulations, such as the Social Value Act, which require consideration of social value and environmental impact, are also desirable. Nor need the regulations be a barrier to innovation.
"Projects such as Dudley College Advance II, which is trialling the Integrated Project Insurance new model of procurement, have been able to work comfortably within the rules whilst still appointing an integrated team on the basis of quality alone without a design to price."
For example, leading-edge projects such as Dudley College Advance II, which is trialling the Integrated Project Insurance new model of procurement, have been able to work comfortably within the rules whilst still appointing an integrated team on the basis of quality alone without a design to price.
Therefore, we believe that Brexit should not trigger an abandonment of these value-adding processes.
This is not to say that there is not room for improvement in the regulations. For example, the time period allowed for the prequalification questionnaire phase (PQQ) is 35 days, but only 25 days is allowed for Invitation to Tender (ITT), yet it is the latter where all the project-specific, value-adding detail needs to be developed. As a minimum it makes clear sense to swap these two periods.
There is also a view that some of the financial limits above which the regulations apply are too low – but we envisage these would be easily amendable by “secondary instrument” in future. But it is surely preferable to improve the existing model rather that embarking upon wholesale time-consuming and expensive process reinvention? In a sector that already suffers from a surfeit of uncertainty, such procedural reform would be unwelcome.
We did debate the extent to which the regulations have actually enriched the supply chain for clients. Have they, for instance, facilitated access for SMEs and new talent, or in practice does the client frustrate the diversifying intent of the regulations by creating frameworks from which they can choose their old favourite suppliers despite the presence on the list of newcomers?
Many public sector bodies do not understand how good procurement (NOT “buying”) adds value for the client, and the supply chain. Perhaps the problem is that the current regulations apply to all sectors – but construction is quite different, and certainly its procurement is far more complicated, so if more radical change is to be contemplated then a high-level generic set of regulations for all sectors with subsidiary detail for different sectors might be a more productive approach.
What would definitely not be helpful would be different regulations for the devolved nations (Scotland, Wales) – non-standard procurement approaches in different jurisdictions add cost for the supply chain particularly for those firms in all nations who wish to work cross borders. PAS91 should be adopted as standard by the whole of the public sector – and suppliers should be more vociferous when encountering procurers who are not using it.
These are just some opening thoughts. We would like to have a wider engagement with all parts of the industry on this subject. Input from public sector clients, contractors, suppliers and lawyers would be particularly welcome.
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OJEU procurement blocks public sector clients from using discussion and interview selection processes in favour of impersonal and quantified objective selection. I understand the objective, but most clients (and industry) might prefer some of more ‘natural’ methods of deciding how to work together. OJEU also deters new industry entrants with little opportunity to give new entrants a ‘start’.
Your CPD article about ‘aircrete blocks’ was very interesting. However its assertion that as a thin strong mortar bed is used, the blocks can be laid a full story height in one session and that the inner leaf of block can now be constructed independently of the outer leaf, is wrong and dangerous.
There would be a significant risk of collapse by wind loading and this, not bed thickness is why both walls are constructed together.