Procurement, Social Value & Responsible Sourcing: Constructing Excellence Members Forum January 2018

Forty Constructing Excellence members gathered at the London offices of Burges Salmon to take an in-depth look at the relationship between Procurement, Social Value & Responsible Sourcing.

Charles Mills, Chair of the Constructing Excellence Procurement Theme Group, provided an overview of the importance of procurement in influencing every aspect of project delivery.  He identified some areas where procurement can make a real difference, including placing value ahead of cost, ensuring effective project management, and effectively procuring innovation.  He outlined the importance of learning from other industries, particularly in how they engage down their supply chains.  As Charles said ‘not all golf clubs suit all situations’ and the same is true for procurement where there it is important to select the correct procurement strategy for the particular project.

Don Ward outlined some of the work that Constructing Excellence has done on new models of procurement, in particular the Cabinet Office Trial Projects.

Rob Wolfe, Chair of the Social Value sub-Group, provided an overview of the group’s work on a Constructing Excellence Social Value Roadmap. The group has analysed much information around social value and how it relates to the built environment and practical guidance for how it can be applied in the built environment.  The tool kit is currently being finalised and Constructing Excellence should launch the roadmap in Spring 2018.

36% of participants thought their organisations delivered social value, while a further 23% felt they understood social value but didn’t what their organisation was doing about it.  When asked which Sustainable Development Goals the industry should prioritise, the overwhelming response was decent work and economic growth, followed by good health and wellbeing, sustainable cities and communities and responsible consumption and production.  On who should be responsible  for social value, participants firmly believed that the Client should shoulder the main responsibility.  Most of the participants (58%) confirmed they were collecting social value data but not managing it.

Responsible Sourcing

Jacqui Glass from Loughborough University, provided an overview of APRES (the Action Programme for Responsible & Ethical Sourcing) which recently integrated with Constructing Excellence at BRE.  The programme was originally set up by Loughborough University through EPSRC funding and has gained momentum to be influential in raising awareness of the issues surrounding responsible sourcing in the built environment.  Most recently APRES launched a white paper on Eight pathways to best practice.

The majority of the audience (83%) agreed that responsible sourcing was a good thing because it improves reputation/brand, it helps manage sustainability and it reduces risks in supply chains. There was a more mixed response around the reasons why responsible sourcing was difficult, with the audience split around whether the impact of costs, lack of corporate leadership and lack of customer demand were holding back responsible sourcing or not.  The audience solidly agreed (78%) that clients, contractors and designers need to know more about responsible sourcing.

Bringing it together

Participants then split into groups to look at:

What are the common themes emerging across procurement, social value & responsible sourcing? What approach could Constructing Excellence use to maximise the synergies?

The group felt that clients and investors were needed to drive change, including with the insurance sector. The group proposed a toolkit looking at 3 core areas:

  • Best practice employers’ requirements
  • Resources and how these impact on areas such as operational issues and risks as well as business resilience
  • Knowledge – learning from other sectors e.g. retail, and for Constructing Excellence to be seen as a ‘centre of gravity’

How do we systematically collect and report data and make it open?
This group identified 3 areas where data could be used to advance social value and responsible sourcing:

  • Reinvigorate benchmarking
  • Standardisation of metrics and data reporting
  • ‘BREEAM’ for social value – i.e. publish, market, educate, engage, reward & recognise

How do we overcome issues of cost and move towards value?
This group developed the concept of a matrix that would enable projects to achieve a balance between reducing costs and increasing value in order to unlock further value through procurement.  The concept was around truly understanding what value meant for each client and being smarter around how to communicate value to them.

Next steps

A combined group will reconvene in March to discuss how these discussions should be advanced into a tangible and coherent programme of activities.  Email helpdesk@constructingexcellence.org.uk to get involved.

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