Procurement focus on value for money questions sustainability

11 February 2011

The government is reviewing public procurement to focus on value for money in place of Big Society and sustainability initiatives, Construction News reported.

£10 billion of wider policy initiatives which are currently partially delivered through procurement have been identified. Spanning jobs and training to community initiatives they include Big Society and equalities goals and sustainability initiatives.

Instead procurement would be primarily concentrated on delivering better value for money while wider goals would be achieved through direct investment.

Cabinet Office minister Francis Maude is understood to be concerned that there are too many ‘add-ons’ to the public procurement process which increase cost and bureaucracy, lock out smaller providers and undermine value for money.

UK Contractors Group director Stephen Ratcliffe said he believed the government’s main objective was “to simplify and reduce cost - so what they are saying is we will have a few key priorities but no more”.

Senior figures in construction told Construction News that the government’s desire to refocus procurement made the implementation of chief construction advisor Paul Morrell’s Low Carbon Construction report less likely.

Morrell’s report emphasised the need for a more regulation-based approach to delivering the UK’s low-carbon commitments which industry leaders suggested would be at odds with objectives to cut down on the cost of procurement.

One source said: “If cost is the primary concern in procurement now, where does sustainability sit in all of this?

“You could read into this the whole issue of sustainability and low carbon has to take second place to cost.”

Many of the 65 recommendations in Morrell’s report have implications for procurement.

These include more integrated working across the supply chain to deliver zero-carbon building and incorporating clauses into contracts that would mean a building is not regarded as complete until it performs to specified design criteria.

Another source said: “I think what Francis Maude is saying is the overarching policy is to squeeze costs out, so don’t create ancillary criteria for procurement - ‘I am prepared to tolerate a limited amount and no more’, as it were.”

A Cabinet Office spokesman said: “The government is still considering its position on policy through procurement.”

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