In this series of posts we offer practical observations to implement some of the recommendations from "Constructing the Gold Standard", an Independent Review of Public Sector Frameworks by Professor David Mosey. The Review is a comprehensive collation of the state of play in UK public sector construction procurement frameworks and covers a lot of ground.
We rightly expect a lot of public sector construction frameworks, but a framework contract itself is not a magic solution. Many public bodies and utilities have long used organisationally based frameworks to deliver construction requirements aligned to their particular requirements. A good example here are Department for Education construction frameworks, were there is a palpable flow of specific work opportunity, completely aligned with client requirement. Such organisationally based frameworks will continue to evolve of course, not least to reflect the new best practice encouraged by the Construction Playbook.
The Focus of the Review is rather frameworks set up by a public sector body which itself may not even have a construction services requirement, but which are set up so they may be accessed by other public sector construction purchasers. A typical model involves payment of a fee or commission, (normally turnover or contract value linked) charged by the framework provider to the framework suppliers.
Construction frameworks when set up well and structured to facilitate efficient and flexible call off are hugely beneficial and can be a key tool in driving improvement. In a sector that has ballooned there are frameworks that simply do not deliver on quality and the lack of alignment and in some cases ambition means that both public sector clients and construction supply chain lose out.
Winning a place on a framework does not equate to receiving prospective call offs or securing contracts. The Civil Engineering Contractors Association estimates there are over 1,660 public construction frameworks procured between 2015 and 2019, with an aggregate value of £220 billion. However as noted in the Report, contractors spend an average £247,000 preparing bids for major frameworks, occasions are too frequent when few projects actually materialise proportionate to the size of the framework and the effort required to obtain and maintain a place. This suggests one of two possibilities – either contractors are not submitting competitive bids at call off and/or don't have the relevant experience,(neither being credible if framework procurement has been properly done) or they are not receiving opportunities for work despite winning a place on the framework.
Avoid double counting the pipeline. Public sector bodies would ideally signpost what work goes on which framework – simplifying the market should be the priority, it is important that contractors know where to look to find appropriate work. We have seen clear momentum from central government in the direction of using the Crown Commercial Services frameworks – for example RM6088 (shortly up for renewal) contains over 11 lots which represent a diverse range of projects in an easily identifiable way as the first stop in the search for construction services.
Competition for the sake of it is not good. But what about local authorities and wider public sector? The equivalent of a Procurement Policy Note from the Cabinet Office on best practice and appropriate frameworks for these bodies, perhaps from the Local Government Association is needed to provide tailored guidance on where access frameworks in an optimum way. Until then we will continue to see a variety of public sector framework providers competing in the same space, structuring lots inconsistently and jostling for position, overlapping each other in terms of potential work offered.
Tag workflow pipelines. Set out concrete pipelines attached to each framework – providing clearly identified projects and phases with prescribed factors and preconditions will avoid wasted procurement costs. This will have both competitive and commercial benefits through improved supplier commitment by ensuring that contractors can find projects that fit their profile, and tailor their bids accordingly. It will also reduce the inefficiency generated by duplicated workstreams, as currently different public frameworks carry similar projects and it can be confusing as to which framework has the potential to call off real work.Procurement evolves. There is much that is happing that is positive. Increasingly social value is at the core of the required outcome from a public sector construction project. Frameworks offer a way to make that social value operate, sustainably beyond a single project. Collaboration and achievement of outcomes are at the core of the Construction Playbook. Frameworks that have at their core collaboration through the supply chain need regular work flowing through the framework to be credible. The Construction Playbook and the Review will help frameworks be self policing. Public sector purchasers will simply not use sub-standard frameworks and they will wither.
Simplifying and consolidating frameworks could arguably be seen as anti-competitive, but streamlining the current market will eliminate economic inefficiencies such as wasted time, duplicate bids and passive frameworks, ensuring both buyers and suppliers can start projects sooner. As frameworks generally last up to four years, having clear market routes through which to advertise will help suppliers continue to attract the most appropriate suppliers notwithstanding supplier mergers and insolvencies.
This blog was written with colleague Hannah Jeckel.
Over 2,000 public sector construction frameworks are currently active, some of which deliver improved value and enable excellent project outcomes while others are less ambitious and less successful. Clients and suppliers urgently need a Gold Standard to help them identify what questions they should ask when creating and implementing construction frameworks, what answers they should expect and how they can make informed decisions. Introduction to Constructing the Gold Standard: Independent Review of Public Sector Construction Frameworks.