Construction procurement must improve

14 October 2009

15 October 2009 | Jake Kanter

Purchasing practices in the UK building industry are "not as professional as they should be", according to a report by not-for-profit group Constructing Excellence (CE).

The CE review said tender processes still focus on price rather than highest value and lowest waste, destabilising the entire supply chain.

The study, chaired by Andrew Wolstenholme, managing director of Balfour Beatty Management, found little progress had been made since Sir John Egan's Rethinking Construction report in 1998.

One of Egan's targets was to establish a "partnering" supply chain, to drive innovation and performance, while also enabling firms to share successes.

The CE report found: "The inability to assess non-compliant bids has stifled innovation. It has also made procurement more expensive as the client team needs to see a developed design before it can pick the winning bid."

The study was also critical of public sector purchasing processes, claiming civil servants are not trained to be procurement experts and departments do not share best practice effectively.

This could be improved, it said, by the appointment next month of a chief construction officer, provided they have "sufficient clout" in the industry and government. The adviser will chair a new independent construction category board, responsible for securing better value for money from the public sector's construction spend, as well as promoting sustainability and innovation. The board will report to the Department for Business, Innovation and Skills and Treasury ministers.

The CE added that lessons could be learnt from the Japanese construction sector, which adopts transparent contracts and processes, as well as good payment practices.

SMoct2009

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