On 23rd March, during our monthly procurement group meeting, Rebecca Rees, the Head of Public Procurement from Trowers & Hamlins presented us with a detailed assessment of the current state of procurement for building safety.
Many reports have been issued on the topic of procuring for building safety recently, such as the ‘Constructing the Gold Standard – An Independent Review of Public Sector Construction Frameworks’ published by the Cabinet Office on 16th December in collaboration with Professor David Mosey, and the ‘Guidance on Collaborative Procurement for Design and Construction to Support Building Safety’ published by DLUHC and announced in Parliament by Secretary of State Michael Gove, in collaboration with Professor David Mosey and Russell Poynter-Brown, the Chief Executive for On-Pole Limited. However, having these documents is not enough. We need to understand the difficulties and challenges to push for better procurement for building safety, to avoid tragedies recurring.
What is the role of procurement?
Procurement sets the tone direction of contractual relations. Currently, the way procurement is often managed reduces the likelihood of buildings being safe. Issues like inadequate specification, focus on low cost, and adversarial contracting, are counterproductive to producing a safe building. The aim of procurement should be to obtain the best value, rather than the lowest cost.
-An understanding of what you’re procuring and the cost:
Parties should devise contracts that specifically state that safety requirements must not be compromised for cost reduction
-Rigour in the procurement process:
Tenders should set out how the proposed solution will produce safe building outcomes – approaching the building as a system, and clients should use a “tender review process” to test whether this is the case
-Data and contract management is critical:
Information in the contract documents relating to all safety aspects should be included in the digital record for the building
MHCLG has decided that the procurement recommendations in Chapter 9 are not going to form part of the legislation, and instead guidance will be given on the topic. The DLUHC Procurement Advisory Group was put in place to assist in the reviewing of these guidances. Currently, the Technical Guidance for procurement was meant to be one of three outputs, but the other two haven’t been published.
The aim of the guidance is to support clients and the industry in adopting and implementing procurement practices that will deliver safer buildings. It examines evidence of ways in which collaborative procurement can lead to safer, better-quality outcomes, and explains how clients and their project teams can use collaborating procurement in practice. As collaborative approaches have been proven to reduce risks and improve value on construction projects in the public and private sectors, they should be adopted on all building projects. The guidance does not prescribe a particular form of contract or procurement model. Still, it does assume that the procurement will be connected with the commercial and delivery imperatives instead of vague or idealistic concepts. These guidance documents will need to be addressed and backed by the government to make themselves useful as part of the gateway process of transformation, or they will become ignored by the industry.
Key points of the guidance:
- Selection by value that avoids a race to the bottom
- Early supply chain involvement that improves safety and reduces risks
- Collaborative relationships that improve commitments and involve residents
- A golden thread of information that integrates design, construction, and operation
- What system sustains and enhances a collaborative culture
- How strategic collaboration can embed improved safety
- How collaborative procurement enables public and private sector clients and their teams to achieve other improvements in economic, social and environmental value in addition to improved safety and quality.
Collaborative procurement can avoid:
- Gambling on lowest price bids without joint review of detailed cost
- Focusing primarily on transferring risk down the supply chain and preparing the ground for potential claims and disputes.
Collaborative procurement encourages:
- Preserving reasonable legal and commercial protections
- Early planning
- Clear roles
- Full consultation and accurate information to reduce the potential failures, errors, misunderstandings and disputes
Responses from the group:
- The industry’s current concern regarding procurement documents is that statutory guidance should be given to the bills to help the industry understand the importance of these procurement documents.
- The MHCLG has a biased focus on impacting the private sector, due to the assumption of “private sector bad, public sector good”.
- There is an urgent need for the construction industry to understand collaboration, make sure the various stakeholders involved are held accountable for their own responsibilities, and work together to create safe buildings for people.
- There is an appetite for change in procurement in the public sector, but the organisations are struggling to achieve it. From the consultants’ perspective, currently, the tenders are often so restricted that consultants don’t get the opportunities to offer more advice to support the organisations.
- CE should promote collaborative procurement with a focus on local authorities, using CE’s existing network to reach out and educate them.
For the procurement group meetings in the future, we can look forward to the launch of the Value Toolkit, a government-backed initiative designed to change the way the construction industry thinks about and measures value. The launch will take place in June, and we will have more exciting discussions about how can the Value Toolkit benefit the construction industry.
Our next procurement meeting will take place online on Wednesday 11th May at 9:30 am. Please register below: