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Procurement

Procurement needs a gold standard

Pagabo executive chairman Gerard Toplass discusses the need for a new ‘gold standard’ for frameworks – ensuring the public sector and communities benefit from the best procurement processes possible.

Pagabo executive chairman Gerard Toplass.

 

Recent government reports have pinpointed the procurement sector as a key driver to support the construction industry and solve the public sector challenges. 

What is evident from recent legislation, including the National Infrastructure Strategy and The Construction Playbook, is the need to support public sector partners in their bid to create the very best buildings. 

Focussing on procuring for value is a big step in the right direction, with the government trying to get purchasers to understand the whole life cost of schemes, rather than just the upfront costs. This means educating purchasers on what ‘best value’ and ‘whole life value’ actually is – it’s not just about monetary cost, and we need to work with public sector organisations to define this. 

Frameworks will be central here. They’re an efficient method to procure public works – but many clients also use frameworks in order to get the best possible outcomes. This is where the creation of a ‘gold standard’ would be of great benefit; local authorities would get the best out of the process and achieve strong social value outcomes. Indeed, this is something that is detailed in The Construction Playbook.

It’s clear that the government expects that use of frameworks is going to grow and recommends their use, which will lead to more frameworks and potentially more providers, so having an industry standard will be crucial in enabling the public sector to reap the benefits. It will mean providers must provide simple, affordable and accessible solutions, but they must also be transparent about costs and compliance.

We’d urge the government to consider setting out a kitemark approach so that public sector procurement professionals can feel assured that they’re working with the right framework provider – and ultimately that they can rely on the organisation they are procuring works through. 

However, with a radical change in the procurement process, as well as the public sector itself undergoing changes, there’s a need for providing consultancy and training. This has to happen so that both the wider construction sector and procurement can effectively work together, and at the same pace.

A big challenge is also going to be how procurement professionals will be trained on what’s needed. The use of technology will to be important to help remove red tape and bureaucracy. Digital technology and digitally enabled procurement and delivery could be enormously helpful in ensuring that the rest of the principles are achieved in practice.

A prime example of this is modern methods of construction (MMC) and its widening use. Our view is that MMC isn’t a separate function, rather one of construction overall – and where it can be used, it should be. We want public sector organisations to look at a scheme and be able to not only procure the expertise but also the best delivery methods – which will drive better social return – on a scheme-by-scheme basis.

Pagabo is working with Social Profit Calculator on the creation of a ‘Smart Construction Calculator’ which aims to use historical data on MMC projects to build a baseline measurement for social value – this will allow a client to look at the social impact of a scheme built with traditional methods and compare this to the use of MMC for the same scheme. 

Most importantly, we need to work towards talent density within procurement, properly set up frameworks with good coverage of suppliers, lots and geographies, and the use of digital technology – all wrapped up in compliant practice with social value at its heart.

Ultimately, if stakeholders adopt what has been outlined in recent government reports and play by those rules, then it will get the traction it needs. Mavericks will adopt the practices outlined early on, and there may be some criticism to the changes, but then will come widespread adoption. But it all starts with ensuring these rules are widely understood by everyone in the industry, from public sector bodies, to procurement professionals and the wider construction sector.

Gerard Toplass is executive chairman of framework specialists Pagabo.

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