Pagabo | Procurement needs a gold standard

Pagabo | Procurement needs a gold standard

Pagabo's Gerard Toplass disccusses need for new procurement benchmarkRecent government reports have pinpointed the procurement sector as a key driver to support the construction industry and solve the challenges faced by the public sector. Gerard Toplass, Executive Chairman of framework provider Pagabo, discusses the need for creating a new quality benchmark — or ‘gold standard’ for frameworks — to ensure that the public sector and communities around the UK benefit from the best procurement processes possible.

What is evident from recent government 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. From schools and hospitals to prisons and major infrastructure, the Government has shown that it is committed to delivering ‘better, faster, greener’ solutions to support our recovery from COVID-19 and build the economy of the future — and is asking the construction sector to be very much part of that.

The focus on procuring for value is a big step in the right direction. The Government is trying to get purchasers to understand the whole life cost of schemes, rather than just the upfront costs, which is a drum that many people in the industry have been banging for some time now. This means there is a big education piece with purchasers on what ‘best value’ and ‘whole life value’ actually is — it is not just about monetary cost, and we need to work with public sector organisations to define this.

Central to this will be framework providers. They are an efficient method for government to procure public works — but many clients across the public sector also use frameworks in order to get the best possible outcomes. This is where the creation of a ‘gold standard’ for frameworks would be at the benefit of everyone working in procurement across the industry. It would enable authorities to get the best from procurement processes and achieve the best outcomes in terms of social value. And indeed, this is something that is detailed in The Construction Playbook.

Government encouraging use of frameworks
Pushing for this ‘gold standard’ is something that we welcome for procurement, particularly as it’s clear that the Government expects that use of frameworks is going to grow and recommends their use. This will lead to more frameworks and even potentially more framework providers, so having an industry standard for this practice will be really important in enabling such public sector bodies — and the communities they serve — to reap the benefits.

For example, some frameworks are much more expensive to procure works through than others, and so transparency of these costs will be important so that authorities aren’t caught out by hidden extras. In the same ways that the public sector needs to consider the suitability of a consultant or contractor, it must choose a framework provider equally as carefully. This means that framework providers must provide simple, affordable and accessible solutions, but more than this they must be transparent about costs and compliance.

We would urge the Government to consider setting out a kitemark approach so that public sector procurement professionals can feel assured that they are 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 within the public sector, as well as the sector itself undergoing changes, there will be a need for providing excellent consultancy and training to public sector workers. This has to happen so that both the wider construction sector and procurement can effectively work together, and work at the same pace.

Need for training
A big challenge is also going to be how procurement professionals will be trained on what is needed. The use of technology is going to be really important with this to help us remove red tape and bureaucracy for the public sector’s benefit. 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 the way they are being used more widely. Our view at Pagabo is that MMC is not a separate function, but rather a function of construction overall — and where it can be used, it should be used. We want public sector organisations to be able to look at a scheme that’s being procured and be able to not only procure the expertise but also the best delivery methods — which will only drive better social return — on a scheme-by-scheme basis.

This is an area that Pagabo is currently working to improve within the sector. We are currently working with Social Profit Calculator on the creation of a ‘Smart Construction Calculator’. This software aims to use historical data on MMC projects to build a baseline measurement for social value — this software 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.

But most importantly in the sector, we need to work towards talent density within procurement, properly set up frameworks that have 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 within the industry. 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 everyone in the industry from public sector bodies, to procurement professionals and the wider construction sector.

In December, Pagabo announced the awards for its £47bn, five and a half-year developer-led framework, more on that here:

Header image ©Eva Almqvist/AdobeStock.

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