Joined up procurement could save construction sector £15bn

11 July 2018

A more joined-up approach to procurement could save the construction sector £15bn a year, a think tank has said.

A report by the Construction Leadership Council (CLC) called for an industry-wide procurement methodology and a standard definition of value that takes into account the whole-life cost of an asset.

It said simple changes could improve efficiency, quality and health and safety and create economies of scale, but it would require cooperation between the industry, clients and government.

Ann Bentley, lead on supply chains and business models at CLC, said: “The single overwhelming observation which comes from the report is that there is a systematic lack of joined-up action within the industry on the part of government, clients and suppliers. And yet the potential prize is huge.

“Simply bringing the whole industry up to the current average productivity level would lead to £15bn savings per annum.”

The report said the business model in the industry was currently “highly transactional” with little motivation for different parts of the supply chain to interact with each other during the early stages of a construction project or learn from mistakes once the construction is complete and the asset is in use.

As well as an industry-wide definition of value that considered more than capital costs and a standardised procurement methodology, the report called for:

  • The development of cost and performance benchmarks for assets and suppliers
  • A user rating system for completed assets
  • A standard cross-industry pre-qualification questionnaire
  • An increase in the capabilities of the Institute for Information Infrastructure Protection, a consortia of universities, to support innovation and spread best practice

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