Maude – Govt Construction: Procurement Reform and supporting SMEs

Francis Maude’s “One Year On” report considers progress made since the launch of the Government’s Construction Strategy and sets out areas where more needs to be done.

Very welcome to all who work in and around the construction industry is the clearly stated commitment to procurement reform, bracketed with a focus on support to SMEs.

The Solutions Exchange initiative (see post on 25 June) is an example of this commitment in practice but there is still a long way to go. Our post yesterday on the local contractors “excluded” from a recent procurement at Wylfa Power Station is suggestive, however, of a cohort within the supply chain community which may simply not yet be ready to be helped.

Turning back to the report here are some of the good bits:

1 industry has engaged energetically with the reform programme, with around 120 private sector representatives playing an active role in its development and governance;

2 cost benchmarking data has been published by the seven main purchasing departments, providing a clear baseline for targeted reductions;

3 cost reduction trajectories have been published by the seven departments, demonstrating that the proposed 15-20% cost reductions are achievable;

4 three iterations of the construction and infrastructure pipeline have been published, providing industry with visibility over the forward work programme;

5 the 2011/12 target for the value of contracts making use of Project Bank Accounts has been exceeded by 100%, providing improved payment speed and security to SMEs and others in the supply chain, and delivering expected savings of around 1% of project costs;

5 the commitment to embrace Building Information Modelling (BIM) in Government projects over a 5-year time frame is positioning the UK to become a world leader in the take-up of BIM and has encouraged investment in the industry to support the revolutionary change that the use of BIM represents; and

6 trial projects have been established to explore how Government can improve its performance as a client of the construction industry.

The key areas of focus moving into year 2 are:

1 unlocking innovation and growth by using the Government‟s purchasing power to drive industry change (eg through the Government‟s commitment to Building Information Modelling) and by providing transparency about the forward pipeline of contract opportunities which helps suppliers to respond to market opportunities;

2 procurement reform and supporting SMEs – trialling of new models of procurement, streamlining the procurement process so it is easier for business to deal with Government, and strengthening supply chains so that SMEs can play their part in delivering better construction; and

3 effective use of data and management information about what projects should cost to drive out waste and efficiency and to equip Government to function as an “intelligent client”.

….and here is the full text of the report:

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