Public sector construction procurement guidance 'can save up to 20 per cent'

Will Green is news editor of Supply Management
3 February 2014

3 February 2014 | Will Green

The UK government has published draft guidance encouraging public sector bodies to adopt certain models in the procurement of construction projects.

A number of government building projects have trialled the three models, producing average savings of between 14 per cent and 20 per cent by streamlining processes.

The Cabinet Office said: “The draft guidance is designed to encourage public sector clients to implement these new models.”

The models are:

  1. Two Stage Open Book. Under this model a bidding stage is followed by a collaboration between the successful bidder and the client to build up a proposal before the contract is awarded.
  2. Cost Led Procurement. In this process the client “clearly states the outputs and outcomes in a strategic brief and industry responds by proposing solutions and committing to a price and a set of rules under which that price can be achieved”.
  3. Integrated Project Insurance. With this approach the client and selected partners form an “integrated project team”, known as an “alliance board”, to carry out the project, fostering joint ownership and eliminating the “blame/claim culture” by limiting risks for members.

Minister for civil society Nick Hurd said: “The construction industry is a vital driver for growth, sustaining thousands of SMEs. It’s therefore enormously important for government to work collaboratively with industry, identifying ways to make sure those links continue to foster innovation within the supply chain.

“In the past, suppliers have been burdened by a lack of consistency in the way that construction projects are procured. That’s why we’ve produced this guidance which will ensure more extensive engagement and provide consistency over the way that public sector construction projects should be procured in the future.”

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