Procurement Bill [HL]

Written evidence submitted by the Civil Engineering Contractors Association (CECA) (PB14)

Procurement Bill: Briefing for House of Commons Public Bill Committee

Introduction

1. The Civil Engineering Contractors Association (CECA) welcomes the publication of the Procurement Bill which has the potential to transform infrastructure procurement for the long term.

2. CECA represents over 300 firms who together carry out an estimated 70-80 per cent of all civil engineering activity in the UK, in the key sectors of transport, energy, communications, waste and water.

3. The Bill is the outcome of a lengthy consultation process, to which CECA - via its member led Procurement Group - developed a substantive response.

4. We are pleased to see that a number of our members’ concerns have been reflected in the Bill.

5. We are keen to ensure that as the Bill makes progress in Parliament, our concerns continue to be reflected in the primary and, most importantly, secondary legislation.

6. We especially note the importance of ensuring the Bill reflects the recommendations of Constructing the Gold Standard, the independent Cabinet Office review, the publication of the Construction Playbook, and the Value Toolkit for the delivery of construction projects.

7. A summary of key issues of interest to CECA members can be found below. If this briefing is of interest to you, we would be happy to meet to discuss this further.

Procurement Bill: Issues for CECA members

Aims

8. CECA fully supports the principles of the Bill. Notably, the move from the principle of Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT). This means that social and environmental value can be fully embedded within the procurement process. It also allows a focus on the whole life cost of the asset, rather than simply buying the cheapest product, saving money in the long term. While MAT is currently available to public sector procurers, we hope that the move will set the precedent for real change.

9. We also support the embedding of the principles of proportionality into the procurement process, which will in particular support SMES as they bid for work.

10. The change of emphasis towards planning and pre-market engagement is also welcome. A lack of early insight from the supply chain often results in the need to over-develop schemes at greater cost, or missing opportunities to enhance outcomes to ensure smoother planning. We recommend involving contractors early in the project life-cycle by utilising tools such as Early Contractor Involvement (ECI), Professional Services Contracts (PSC).

Procurement models

11. We generally welcome the proposed changes, especially the proposed competitive flexible procedure, which we feel is particularly suited to the construction industry and the principles of the Construction Playbook. However we seek further clarification as to how this procedure will be implemented.

12. We also recognise that the minimum timescales proposed in the consultation on participation and submission of final tenders as part of the competitive flexible procedure are very short, and we would suggest instead that any timescale is proportionate to the scale and complexity of what is being procured.

13. The open procedure is not favoured for complex civil engineering projects as the cost of bidding is extremely high and the chance of winning is substantially reduced. Our members have indicated that the wrong use of open procedure can drive down the quality of bids received.

14. We are also supportive of the objective to simplify current regulations although consideration should be given to the development of a common standard of regulations, going further than consolidation, to drive further simplification.

15. We seek clarification as to the extent to which the proposals for procurement oversight might apply to procurements administered by the private sector, but who operate in the public domain.

16. Any consolidation, must be preceded by a lengthy transitional period and must work in harmony with the principles outlined in the Construction Playbook.

17. We also seek particular clarification on the operation of the proposed Dynamic Markets system, which is not often used within the construction industry.

18. Frameworks are a great way of organising and delivering civil engineering projects. However, while some work well, some don’t work effectively at all.

19. It is more than ten years since the UK Government received cross-industry proposals to establish a ‘clearing house’ in order to eliminate overlapping or unfair frameworks, and yet we have not seen the substantive reform required to deliver optimal outcomes for customer and contractor alike.

20. If the Cabinet Office recommendations on Constructing the Gold Standard are fully implemented by Government they will substantially address the challenges faced by civil engineering contractors when working within construction framework and guide decision makers towards developing mutually beneficial procurement models.

Oversight

21. CECA is fully supportive of the proposals for procurement oversight and note that for the construction industry, the functions already exist to some extent within the Infrastructure and Projects Authority. We hope that these measures in the Bill build on the excellent work done within the IPA to date and recognise the challenges of establishing scrutiny which cuts across all departments. We also make the case, that it is imperative that any oversight function is properly established, funded and resourced.

22. We anticipate that this measure will help drive consistency of approach across public sector contracting bodies and we hope that it will work collaboratively to drive improvement.

Assessment and communication

23. We support the proposal for a single common platform for supplier data that was proposed in the original Transforming Public Procurement consultation. This would deliver significant cost savings to industry and its customers – for construction alone we estimate that industry spends more than £1 billion each year submitting duplicative data to a range of different supplier data portals. CECA and Build UK have already developed the Common Assessment Standard for the construction industry, which we suggest is used as the basis for development of the new platform. We feel that it should have a sector specific approach, using auto population in an intelligent way.

24. We seek clarification as to how the new platform will interact with existing private accreditation bodies. We believe that its must be introduced gradually in consultation with industry and that the roll out of these proposals reflect commercial sensitivities and do not incur unnecessary delay, costs, and challenges.

Payment

25. CECA supports the proposals surrounding payment and are keen to ensure measures introduced to address payment challenges are easy to manage.

January 2023