Most construction clients don't review procurement processes

14 January 2020

Construction clients are missing out on delivery improvements and cost efficiencies by failing to measure performance and learn from project reviews, according to a survey.

The survey, by property consultancy Turner & Townsend, found that 61% of client programmes did not review procurement processes in light of lessons from past projects and 48% did not consistently measure performance.

Gareth Poole, director of contract services at Turner & Townsend, said: “Successful procurement is rooted in consistent measurement of performance, embracing and implementation of technologies, effective risk management and supply chain collaboration.”

The survey showed that over half of clients failed to offer suppliers effective incentives to drive supply chain efficiency, performance and innovation, and nearly three quarters did not have commercial incentive models.

However, the study indicated improvements in cross-industry collaboration, with 69% aiming to have “open and honest relationships within the supply chain”, compared to 27% last year. 

Risk management is also an area that is better performing with 60% of respondents saying their contracts set out how risks should be identified and managed during the stages of the project.

Turner & Townsend called for increased adoption of the business model Project 13 set up by the Infrastructure Client Group. The initiative proposes an “enterprise approach” where project operators and those in the supply chain collaborate as partners to improve delivery and boost productivity across the sector.

Commercial relationships are aligned with outcomes rather than outputs and risks and rewards are shared. 

Poole said: “Our research highlighted a significant shift in attitudes towards collaboration, but there is improvement to be made in performance measurement and the monitoring of lessons learned so that revised practices can be utilised in future procurements, particularly those identified as high risk.

“This is particularly important given the current state of market volatility and political uncertainty.”

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