News

There’s a lot happening with procurement right now, which is opening opportunities for a more strategic approach by public clients.

The recent launch of the National Procurement Policy Statement and the Construction Leadership Council’s public sector procurement guidance, ‘Potential solutions to common evaluation issues faced by Clients in the built environment sector”, and the passing of the Procurement Act, are opening up opportunities for a more strategic approach to procurement by public clients.

This month, Martyn Jones examines how this fresh guidance and legislation provides the opportunity for clients to take a more strategic approach to procurement in delivering their policy objectives.

In essence, the intention is to encourage and support public clients to assemble more strategically aligned supply chains to deliver more innovative, valuable, predictable, and sustainable outcomes.

This more strategic approach to procurement can also be seen as addressing the deep-seated problem in construction – the all-to-often misalignment between the strategies of clients and their suppliers, supply chain relationships and operational practices.

The National Procurement Policy Statement recognises public procurement as a “key lever in achieving the Government’s missions by sourcing goods and services that deliver value for money, including social and economic value across the commercial lifecycle that drives sustainable economic growth and benefits local communities, raising living standards in every part of the United Kingdom”.

The Procurement Act aims to simplify and modernise public sector procurement, promoting efficiency, transparency, and fairness, while encouraging SME and social enterprise participation.

It aims to ensure that public money is spent effectively, promoting economic growth, and delivering social value in line with the government’s 5 missions to deliver a decade of national renewal.

Its key objectives include adopting a simpler and more flexible commercial system with a more streamlined and flexible approach to procurement, making it easier for suppliers to engage with the public sector.

It calls for greater transparency in procurement, ensuring that public spending is transparent and subject to proper scrutiny focusing on value for money, economic growth, and social value.

Then there’s capability – supporting investment in innovation, skills, digital, offsite, quality, and the whole-life performance of built assets, especially in relation to environmental performance and safety.

Also offering a new “competitive flexible” procedure allowing contracting authorities to use more flexible approaches to procurement.

This means public clients can effectively interact with the market and supply chain assets, deploying early market engagement – the process of engaging with suppliers before buying.

What are the benefits of early engagement? Well, it can help generate more innovative and targeted value solutions through a greater understanding of the capabilities and maturity of potential suppliers, as well as revealing the risks and challenges.

It also presents opportunities to not only identify the skills, knowledge, and experience of tenderers but also their behaviours and collaborative capabilities against criteria such as: The maturity of their relationship management approach; their depth and scope of learning and innovation; their leadership; their customer focus; and the effectiveness of their analysis, planning, and problem solving.

This pre-appointment interaction between buyers and suppliers presents the opportunity for developing greater mutual understanding and more open relationships – a precursor to undertaking relationship management in post-appointment project teams and supply chains, as described in last month’s article.

But is market engagement viable for all clients? Well, the decision to adopt it will depend on a project’s desired objectives and outcomes, and the complexity and sensitivity of the works (cladding remediation being a good example of the need for well-developed customer-facing behaviours).

And a word of caution on behavioural assessments. Most projects in construction do not justify or require them as part of the procurement process. It’s not always feasible to invest the time and resources necessary so any early interaction with the market needs to be proportionate to the specifics of each project and its supply chains.

And then many clients may not have the necessary nous needed for meaningful engagement so this could be a role for the client advisor as set out in the CESW and Midlands publication, ‘Client advisor guide’. Less frequent clients may opt for one of the many frameworks, which provide market engagement and more straightforward access to contractors and consultants with the attributes being sought.

Given this new cluster of guidance and legislation, coupled with much previous guidance, such as the Construction Playbook, are we finally seeing a more strategically and operationally aligned way of thinking about procurement in the wide range of very different supply chains that collectively constitute our industry?