Is urgent reform needed?
Public sector procurement is a barrier to SMEs in the built environment and the sector needs more informed clients, hears an All-Parliamentary Commission of Inquiry...
Procurement of construction services in the public sector too often defaults to a ‘tick box’ exercise rather than a considered approach, to the exclusion of smaller practices that may be able to offer better value for money.
LI chief executive Alastair McCapra said: “Feedback from our members is that local authorities often don’t know what they’re trying to procure or how the procurement system works. If you don’t know anything about design, you’re unable to ask the right questions, so everything comes down to cost.”
McCapra was speaking on Monday 16 January at the first evidence giving session at the All-Parliamentary group for Excellence in the Built Environment for its Commission of Inquiry into Excellence in Construction Procurement.
Together with representatives from RICS and RIBA, McCapra gave evidence to the Commission chaired by MP Tony Baldry, and including MPs Nick Raynsford and Oliver Colville, the Earl of Lytton, and senior figures from the construction sector, such as Sir John Armitt, Jack Pringle, Gordon Masterton and Alan Crane.
Both the LI and RIBA argued for the need for a more proportionate system of procurement. As it stands, SME practices are required to submit the same level of information as larger practices when they tender for public sector contracts. Could this be made proportionate to the scale of the work and risk that they are undertaking?
“Traditional procurement methods make it relatively easy for SME to participate as subcontractors, but do not promote collaborative working and often run up costs because of their inflexibility,” said McCapra.
“Frameworks do promote collaborative working, but also make it very hard for SME to bid in, since they have to provide the same level of information and commitment as much larger firms and can’t meet the requirements. Are there forms of contract or procurement which find a happier balance – allowing SME to work collaboratively with larger players, while bearing a share of the risks and costs proportionate to their contribution to the overall value of the services procured?”
This was echoed by RIBA’s Peter Caplehorn who said that clients needed to provide “less rules and more logic”. He said procurement was hindered by a lack of technical understanding on the part of the client and that RIBA members hardly ever get feedback on how they’ve performed during the process. “
Caplehorn said that: “Urgent reform is needed. We’re seeing poor quality design, bad value for money and shorter life times for buildings.”
Both the LI and RIBA spoke of the need to support local authorities on good design through enabling mechanisms, such as client advisers, to help local authorities get a clear idea of what they want, and also called for more design professionals on the inside.
Jack Pringle asked the presenters if they felt it was a question of the market being misaligned or whether the professions themselves were misaligned to the market?
To which, McCapra replied: “The markets don’t understand how to get the best out of SMEs. What has happened is that the barriers to participation have gone up and up, making it difficult for smaller practices to play a meaningful part in an overall project.”
He dismissed the notion that SME practices are inherently less experienced than their larger counterparts, saying that they are often made of up highly-experienced landscape architects who have moved away from larger firms. He added that SMEs often have good local knowledge that might benefit projects procured by their own local authorities.
All three presenters agreed that this wasn’t a case of the public sector being bad and the private sector good, but that it was more about the difficulties of dealing with a pluralistic client compared to a single client.
Caplehorn said: “What you tend to get on commercial projects is a figurehead who will drive a project hard through their bureaucracy, and with that comes clarity of thought.”
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Caplehorn is a shrewd person as evidenced by the final para in the article.
You also have to ask yourself why would you want to tender for work in the public sector, there doesn’t seem to be any flair in the client body, nor money, unless you drive trains or fly planes.
Go abroad, it’s fun and lucrative.
Glad to hear that the Landscape Institute is putting the case for small practices.There are too many corporate dinosaurs out there winning work at the expense of more creative and innovative small practices.
Steve Martlew
Frameworks are often procured using standard questionnaires and marking criteria regardless of the nature or scale of the work. When clients ‘bundle’ a wide variety of services and project scales into one framework and then expect each tenderer to provide all of them, smaller and specialist practices are effectively excluded from the outset no matter how expert they are. Clients miss out on these skills, without even realising that they are missing out. More technical professionals in procurement process, PLEASE!
AT LAST some positive talking in support of the real value offered by SMEs… but sadly this is too late for many, as larger practices dominate the bidding minefield in all areas of finance and PII, which alone will guarantee success on paper. It seems that true value, technical excellence and innovation at a local level is not sufficient to be even considered worthy; otherwise some common sense would have prevailed years ago…
Sorry, did I say ‘common sense’... how much does it cost to change a public sector light bulb these days? I rest my case!
As somebody who works as a project manager in a local authrity, whose whole carrer so far over 30 years plus has been in local authorities and housing assocs as a landscape architect, I can tell you that many LAuth’s have select lists of consultants and contractors, often managed by outside companies, who charge an annual fee just to be on “the List”. For it to be worthwhile, the SME needs to decide if it makes commercial sense to pay this—and undergo a complex vetting process. Even if the consultant gets on the list, there is no guarantee of work—it’s clearly “not worth the cost and effort it if no-one in the LAuth asks the consultant to tender for design work. This is why bigger practices (often of architects and surveyors) whose bread and butter is public work will be successful as they get repeat work and build up a reputation over many years.
My advice to a small landscape practice seeking to enter the local authority market is to do the necessary homework-research who commissions designers in the authority, and what the purcahsing section ‘s requiremenst are—that sort of thing. They may have special policies enabling local SME and BME firms to participate on a favourable footing. It’s no good griping on the sidelines—and you will not get mega fees—but if you have a little patience and research and make contact, things may be worthwhile in the longer run.
What a nation we are - how we seem to tie ourselves in bureaucratic knots - how did we once run an empire? Who would have thought that a few procurement rules could have stimulated the growth of a whole profession of procurement specialists who see, as their only means to professional growth, the need to act a as brick wall between direct and informed contact between technical client and those who could provide the necessary technical skills to solve a problem. Where else but in public sector procurement is added pointless paper work seen as a good thing.
And after all the work of winning a contract, which we all fulfill more than adequately, they repeat the full procurement process for the next tender. The total cost of procurement on a design tender by all consultants often exceeds the value of the contract. Is squandering resources like that sensible? Let us all hope simple common sense can prevail,....... a small flickering candle of hope in our darkness.
Good to see this debate and agree with all sentiments. I would add to this that the current procurment processes are extremely wasteful of public and private sector resources, with much trumpeted frameworks being the worst culprits. They are totally biased towards SME, set up by people who dont even seem to understand the design and construction process, let alone Landsape Design.
Pleased that the LI are taking up this issue. Too much public sector work is taken up in long term frameworks by large firms excluding smaller firms who may be more fit for some types of specialist work. McCapra put his finger on it with the comment that SMEs are often made up of highly experienced professionals who have left larger firms. The latter use a wider range of staff often spread over several offices. Let’s hope that pressure will make the procurement system more responsive to the benefit of the public client and SMEs.
At long last this issue seems to be coming within the field of vision at a high enough political level for some guidelines to be handed down and counteract the risk-averse culture that public sector procurement hides behind.
The list of shortcomings in custom and practice continues to get longer but perhaps the most invidious is marking that favours or demands firms to have completed numerous projects of the kind being procured: this logic prevents those without such experience ever acquiring it and feeds those who do have the experience with so much more of its kind that there is little incentive to innovate.
We need criteria that measure the intellectual and aesthetic capacity of bidders to analyse the requirements of a brief and devise bespoke creative responses, something that can only be assessed by either very discerning clients or design advisors - not the sort of procurement bureaucrats that are filling the ranks of decision makers.
Many PQQs even preclude SMEs on nonsensical commercial grounds: a recent example I witnessed called for five pages of business continuation strategy for a contract of only 18 months duration.
Of course reform is needed, but it’s too late for many. How many of us were forced to tender for the riduculous North West Public Sector term consultancy framework in November 2010. A process which was set up by Manchester City Council,after the demise of the NWDA, to manage and procure all public sector work throughout the North West for the next four years - That was all work for the Boroughs, County Councils, Health Sector, Fire, Police, National Park, Further Education, etc.etc. I was informed yesterday, a year on, that as yet no landscape firms have been appointed and the engineers will have to re-tender as the selection of just one or two practices, as proposed, was not appropriate for the range of expertise required - there’s a surprise. By my reconning this procurement process will potentially exclude 95% of all construction design professionals based in the North West from public sector work in the North West for the next four years. A similar process in North wales was set up to cover six county authorities, Landscape Architecture wasn’t even included on the list of disciplines and when I enquired why, I was advised the multi- disciplinary firms going for the other work would be able to supply the services anyway. My Practice is now excluded from all work in the North West of England and North Wales - so much for the localism agenda. I am with Will Williams, lets all set up in China!
As an employee of a ‘corporate dinosaur’ myself, I have to take issue with Steve Martlew’s assertion that we are ‘out there winning work at the expense of more creative and innovative small practices’. Quite frequently, the exact opposite is true because the corporate dinosaurs can’t compete on price with smaller, specialist firms, who are quoting ridiculous prices and undermining the value of the whole profession. However, my main issue is with the public sector procurement process which, as seems to be generally agreed, asks for a whole heap of useless information, with no indication of how many competitors we’re all up against and frequently with no indication of budget. It seems to me that public bodies have no concept of the need for efficient use of time and resources or of having to make a profit to survive. I vote for a boycott!
Hi again. Looking at the above comments, it’s tremendously sad that so many of you have bad experience of local authorities. A good argument can be put forward for “procurement fragmentation” with numerous clients in numerous departments each commisioning bits of landscape(call it “the shotgun concept”) thus making the chances of SME’s easier on the mathematical probabilty basis!. These framework agreements (the single big shell with winner takes all) seem to be a very bad thing indeed. If local auths still had landscape architects, especially at senior level, (sadly very few and far-between now) they would understand better the importance of landscape in delivering a liveable future, and would know what a good SME Landscape architect can offer. My own authority commissions SME’s as most of our projects are small. Sadly, in the 80’s and 90’s we saw the widespread appointment of non-professionally qualified senior managers who had no education in, and thus little detailed understanding of the history and practice of engineering , planning, architecture or landscape. Hence the reduced awareness of the importance of what makes good landscape, and how to procure it. I suspect this comment may trigger a further response or two!.