How a shocking tragedy demonstrates the need for procurement to sit as a central asset – and why that starts with senior leaders.
The events of 14 June 2017, when 72 people lost their lives in a devastating fire at the Grenfell Tower residential block in west London, continue to cast a shadow over British public life. But even as the inquiry into the events unfolds, expert witnesses have been carefully examining the chain of mistakes the tragedy at Grenfell can be tracked back through, while others have begun putting lessons into action to ensure it can never be repeated.
Already, one of the key messages emerging is that for too long procurement has not been consulted on products or materials in the construction sector but has been seen as more of an auditing function than an integrated approach. While in many other sectors, procurement’s expertise is embedded strategically and is well understood by senior executives, those involved in the construction supply chain haven’t fully leveraged the experience in their ranks.
That means an end to a relentless focus on lowering cost in favour of prioritising safety.
Learning from mistakes
CIPS chaired the Procurement Working Group that compiled the HRRB Procurement Competence Framework in response to the Hackitt review into Grenfell, which highlighted that strong health and safety standards in construction are not equally applied to residents of new buildings.
The full extent of the failings around Grenfell has not been revealed as the inquiry is ongoing. But it’s clear that serious errors were made, including in procurement.
“People are chasing a lowest bid. They are changing specifications of products that they use; they are not necessarily selecting contractors who are fully qualified to do the work,” says CIPS director Duncan Brock, who has been heavily involved in the review. “And that’s where the failings are starting to come through. What Grenfell is doing is providing a focus on it, and that focus is allowing people to really understand that the way things have been done in the past is not how things should be done in a proper procurement approach.”
Already, the public inquiry has heard how refurbishment costs at Grenfell were cut by using aluminium composite material (ACM) cladding that did not meet required fire safety standards. This reportedly caused the blaze to spread rapidly throughout the tower block.
The Procurement Working Group is collaborating with government to implement change and learn the lessons of Grenfell. The group is understood to be publishing strong recommendations in its final report, including a core suggestion that procurement is handled only by competent professionals, alongside a need for industry-wide education in procurement practice.
“Procurement, currently, is done by anyone who wants to have a go in a lot of cases, and they know what to do because we’re all buyers – we do it in our daily lives. But to be properly competent, you have to be doing things in a much more strategic way,” says Brock.
“You’ve got to be looking at the market properly, you’ve got to look at all the factors of quality, service, safety [and] price when you’re making decisions. You’re qualifying your suppliers better. What we need to do is, yes, talk about the failings, but also showcase where, by procurement being involved early, things were done differently.”
It is a principle that resonates among procurement leaders in the sector. Carol Williams, head of procurement at Laing O’Rourke, emphasised the need for procurement to be involved at every stage of projects.
“We need to be absolutely clear about what the role of procurement is through influence and engagement,” she says. “You have to have the right people, who are approachable and capable and have the ability to deliver. It’s really important that you have that right type of capability within procurement versus it being seen as bureaucracy and an obstacle.”
Maintain best practice
The drive to raise an organisation’s procurement standards needs to come from senior management, Williams adds.
“It has to start at the top. The senior leadership of the organisation have to recognise that with professions – whether it’s accountancy, lawyers, procurement, engineering – they have to recognise that competency, then give them the platform so they can influence the organisation. That’s the experience I’ve had within Laing O’Rourke. It’s been a huge enabler by having a CEO [who] has provided that vision and direction for the business.
“Stick with that agenda and through your comms plan just keep repeating that message and you can see it playing out. Linking to CIPS, what is the best practice? Let’s get people accredited and provide them with training and development. Then the supply chain, the whole agenda about having the right code of conduct – bringing them with us and making sure we have that resilience, and working closely in a collaborative partnering type of way rather than a simply transactional way.”
The lessons of Grenfell may take decades to implement, but one thing is clear – procurement is a skill and only fully qualified and accredited professionals should be responsible for decisions that can have profound and potentially deadly consequences.