Construction Procurement: How We Buy Construction, May Just Be Killing Us
Construction Procurement: How we buy construction, may just be killing us
There is growing concern about public procurement during the pandemic, with large contracts awarded, apparently without due process being followed, with some of the recipients being associates, former colleagues, friends or relatives of those making the awards.
The reason given for the bypassing of normal procedure appears to have been that the pandemic necessitated a faster process to save lives during a national emergency.
So why does procurement and not only public procurement, take so long?
In many cases there are exhaustive vetting processes. These are apparently to ensure quality but for many smaller contractors they must look like barriers to entry raised by buyers to eliminate smaller firms who do not have the resources to take part in the vetting process.
These processes are often generic, include ambiguous questions and ask for reams of information, often unrelated to the project being tendered.
This reduces competition, it also reduces the likelihood of employing local contractors and local people and it increases carbon miles.
Delays are also brought about by planning. Planning departments are hugely understaffed and underfunded and therefore there is little wonder that they can’t cope.
Similar issues with building regulations have led to the watering down of that process and all eyes are on the Grenfell enquiry to see what the outcome will be. No one is expecting the current building regulations regime to come out of it with flying colours.
What all these issues have in common is that they fail to focus or deliver on providing value for money. Despite the exhaustive procurement procedures, it’s very rare that the contract is not awarded to the lowest price.
The glaring exception may prove to be the contracts awarded by government during the pandemic.
So why the focus on the bottom line?
The procurement process is often used as justification to employ the contractor with the lowest price. This decision is based on the fact that the procurement process showed all those competing were capable of undertaking the works, so all that differentiates them is price.
A leaked document, widely reported in the news media, alleged that pressure to keep costs down during the refurbishment of Grenfell Tower, appears to have driven the decision to use cheaper cladding on the block, rather than a fireproof material, saving nearly £300,000.00.
This occurred not only at Grenfell but at hundreds and perhaps thousands of other buildings across the UK.
During the current pandemic, government data has shown that construction has one of the highest number of Covid-19 related deaths. How can buying decisions based solely on cost accommodate the cost implications social distancing and longer material lead times?
Are contractors being allowed extra cost for working less inefficiently by following social distancing guidelines?
Or is the industry and buyers in particular, keeping its head in the sand?
How do we move forward?
In our opinion, the blame falls at the cost driven culture that runs deep within construction in the UK and we fear for the impact this will have across the industry in the short and long term, as we enter what is likely at best to be a difficult trading period.
It is proven that the current model drives contractors to price work at unrealistic margins, it delays projects and causes them to overrun, incurring additional costs and puts not only operatives, but building users in significant danger. It also ends up costing everyone a lot more.
The industry won’t change overnight. But at Maguire Brothers we will continue to ensure that the safety of all our staff and clients remains paramount, and if that means not winning a project, well at least we can sleep easily at night.
By working in partnership with our clients from the outset, we hope that looking at safe, long term, sustainable solutions, whilst some times more expensive in the short term, invariably offer better value in the long term and allow us all to do our bit to creating a safer and healthier living and working environment.
Good, Fast and Cheap – you can only pick two, at some point the penny will drop for construction too.