The search for improved procurement methods seems perennial. But there are better ways
Embedded use of inappropriate inflexible and generic procedures stops effective procurement delivering best value and quality. Evidence shows this is leading to increasing UK market aggregation, a decline in the number of public architects and the profession losing market share and access.
For example, 49% of architectural public sector opportunities are now in ‘hidden’ architecture notices which, though referencing architectural or building design outputs, do not directly call for an architectural appointment. The facilitator, developer or contractor is asked to provide design services; the architect, if there is one, is employed as a subcontractor. Between 2008 and 2015 the top 10 firms, comprising 0.24% of the market by number, captured 8.17% of awards, an average 127 each.
In the UK these embedded methodologies are evidently expensive and inefficient, with call-off procedures from frameworks attracting further economic costs. Data from across the EU also shows that UK procurement is significantly one of the most inefficient, offering poor market access.
In the five years to 2014, eight UK design contests (0.8% of the architectural market) were held, but only two were open calls (in Germany the figure was 13%, Austria 33%, France 26%). In the UK negotiated procedures, which accounted for 2% of the market (Germany 83%, Austria 34%, France 15%), are evidentially the most economical appointment procedure.
Comparative studies of UK procurement support unjustifiable skews towards the use of the two stage restricted procedure and a lack of procedural diversity for appropriately delivering efficiencies, effectiveness and better quality.
Design contests and negotiation
As well as design contests, which are separate for the appointment of architects, the EU directive provides six basic procurement procedures. Of these, four are rarely recommended for architectural appointments.
Public authorities commissioning architecture don’t often embed appropriate procurement procedures because they have little insight into the wider impacts, or how best to effect change. There has also been a dearth of knowledge and information available to support and lobby for change.
In 2013 Project Compass CIC was founded as a social enterprise to provide a sector specific procurement intelligence service for clients and architects. This free open access web portal service provides guidance for clients and architects on the directive and public contract regulations, publishes architectural OJEU notices and comprehensive real time analytics (including data about clients and their procurement histories) and offers multiple other resources. Project Compass also publishes reports on construction procurement trends and guidance for clients.
Future framework procurements?
My research and work into Project Compass shows that framework procurements also need reform as despite their benefits, many of their aspects are deeply flawed.
Lessons can be learnt from London’s ‘Silicon Roundabout’, which has become the focus of enormous growth in the UK IT sector where emergent IT SME start-ups have succeeded in breaking into new UK markets, leading to new product innovations and gaining global reach.
This has not been by chance. In 2012 the UK government changed the sector’s procurement regime to improve access and competition for public contracts by a targeted opening of the market to enable SMEs to gain greater market share of public contracts. This was done to precipitate growth – increasing SME access, reducing cost and improving transparency by using innovative digital procurement.
It’s called G Cloud, or the digital marketplace. It is widely acknowledged as a notable success of the last parliamentary session.
G Cloud is a single national digital framework for IT services to which all the public sector has access, with regular calls. It works in conjunction with the ‘digital first’ policy, by which the public sector are required in the first instance to purchase digitally, and only from those on the framework (wherever the service is provided there). Entry criteria to the G Cloud framework are set deliberately low, in order to open up the market, with easy minimal criteria and simple procedures. Reliance is placed on the information on G Cloud being digitally transparent and accessible to clients. Call-offs from the framework are directly shortlisted for negotiation; with candidates evaluated against the recorded criteria of the tender, its brief and objectives.
This renders traditional restricted framework procedures, followed by call-offs, effectively obsolete; reducing the first stage for all appointments by having a single framework appointment by a single bid with only two stages.
Replication of a construction sector specific G Cloud for the acquisition of professional services offers a huge potential opportunity that requires urgent evaluation and exploration for future framework procurement.
Walter Menteth’s Pathways to Construction Procurement Reform has been shortlisted for the President’s Medal for Practice-located Research