Getting Value for Money Through the Smarter Procurement of Works Contracts
The following actions would improve VfM and contract performance in relation to works contracts.
- Under the Public Spending Code, it should be made compulsory that all works projects with a capex in excess of €25m should be procured using the competitive procedure with negotiation. This proposal would result in contracting authorities getting a Best and Final Offer based on a more precise and negotiated understanding of the project brief and costs. The current practice of using the restrictive procedure for large scale projects inevitably results in significant cost overruns: the Children’s Hospital is a case to point.
- Linked to this proposition, it is also recommended that OGP instruct all contracting authorities to appoint a Procurement Process Auditor for all works projects with a value in excess of €50m. The appointment should be made once the preliminary business case has been accepted. The OGP should procure Procurement Process Auditors by way of a framework. In addition, the June 2004 (Department of Finance) guidance on the role and function of a process auditor could be update.
- The procurement of construction professionals should be carried by contracting authorities using a Dynamic Purchasing System (using lots by profession category/region). This would greatly simplify the appointment of such professionals and would replace the current requirement of procuring individual advisors via the cumbersome CWMF. DPS procurement is emerging as the default procurement option of choice in the UK and is used extensively in the procurement of construction professionals.
- Linked to this proposition, all contracting authorities with a requirement to appoint small building contractors should be required to procure works using a DPS. A new simplified template Tender Response Document and small works contract (drawing on the RIAI model form) should be introduced for all works contracts valued at under the EUthreshold.
- Maintenance contracts below a value of €20m over the term of the contract should be procured using the OGP’s template services RFT/contract and/or framework for facilities management. As services dominate the contact the CWMF should not be used.
- A new easy to use template RFT, TRD and works contract should be introduced for all works contracts valued under €50,000.
- Guidelines (mandatory) should be issued in relation to the use of sustainable (green) public procurement selection and award criteria for works contracts over the EU threshold. The current (draft) version of EPA guidance on GPP (January 2021) excludes works and construction products and services. Using GPP for lower valued contracts might be attempted at a later stage in the light of experience with higher valued projects.
- Elements of the UK’s Construction Playbook (PPN 09/20) should be incorporated into revised CWMF guidelines.
- Contractors should be asked to completed a Tender Response Document (TRD) for all works procurements other than high risk, high value contracts where a bespoke approach is needed. A TRD should replace the Suitability Assessment Questionnaire.
- The CWMF should be made compliant with the 2014 Public Contracts Directive. At a minimum, the following changes should be made:
- The ESPD should be a requirements for all procurements in excess of the EU threshold. There is no further need for the Declaration of Personal Circumstances of the Tenderer.
- Only electronic submissions should be sought.
- Where used, the Suitability Assessment Questionnaire/TRD should require one signature only. The current SAQ (for use in a restricted procedure) requires eight declarations to be signed and completed).
- Unless justified on the basis of risk, evidentiary documents should only be sought from the preferred tenderer only.
- The OGP should procure a provider(s) to deliver the current suite of public sector training materials on works procurement to contractors and construction professionals. Investing in public sector works procurement training only – as is the case currently – will not facilitate the effective implementation of a reformed CWMF.
3rd February 2021
Copyright Bid Services Ltd. The material in this post is purely for information and discussion and does not purport to advise on matters of law.