How To Save £1 Billion? It’s As Easy As PQQ…

CECA Chief Executive Alasdair Reisner

As the sun sets on another British summer and the kids get ready to go back to school, it may be time for many to reflect on what they got up to over the holiday season.

Some saps may have done dull things like ‘going away somewhere sunny’ or ‘spending time with the family’. Not for me.

No, instead I filled my time reading the secondary legislation associated with the Government’s Procurement Bill.

What’s that you say? Doesn’t sound very interesting to you?

Well, that is surely because you lack imagination. How could the new rules setting out how the Government buys c£290 billion in goods, works and services each year be boring?

Okay so the 42 pages of the Procurement (Transparency) Regulations may not win the Booker Prize this year, but then how many of this year’s potential literary classics can say that they hold the potential to save the UK construction industry and its customers an estimated £1 billion quid?

As, buried away in the draft statutory instrument (think of it as the ‘detailed design’ that sits below the Bill’s ‘outline permission’) is a section snappily entitled Supplier information: economic and financial standing.

In these unassuming words is the key to solving a problem that has been a bugbear to the industry for decades.

Back in the 1990s when the UK joined the EU single market, it took up the new procurement rules with gusto. Included among this was a tidying up of the way that companies were selected to bid for works.

While this all made sense on paper, it is unlikely that anyone foresaw the industry that would spring up on the back of this. Rather than clients just undertaking this assessment themselves, a whole range of new firms trundled into this space, offering all manner of accreditation, assessment and pre-qualification support.

If there had been just one this would have been fine. Yet, despite efforts, this was a case of letting a thousand blossoms bloom, each with a slightly different question set that that needed to be filled in. Oh, and they would have a cheque too please.

Over time, this grew to the point where many contractors had more people in their employment whose jobs it was to fill out these forms than there were people doing unimportant tasks such as, erm, engineering and the like.

As noted above, there were numerous attempts to curb this enthusiasm. First along was Constructionline. In 1998 it was set up by the Government to become a single source of pre-qualification data for industry. After a good start, many public bodies realised that they were not required to use Constructionline, so started up their own systems.

In the utilities sector, they also decided to do their own thing, with separate systems for different sub-sectors.

The Government had another swing at reform in 2008. Its PAS91 standard set essentially said ‘we don’t mind who asks the question, as long as they ask the same question’. I will declare an interest as I was part of the industry group that helped prepare PAS91. But again, there was no legislation sitting behind PAS91 so it did not become the standard for the industry as a whole.

More recently, and promisingly, the Common Assessment Standard has been developed by Build UK. It builds on PAS91, ensuring data sharing between those carrying out the assessments, alongside an impressive range of companies that have signed up to support the CAS.

But for the time being this is only used by those that sign up.

At the risk of sounding slightly soviet, this is one area where all people being equal and everyone having the same may actually be a good thing, and something that the Government should support.

As it stands, the proposed Procurement Bill would require that ‘core supplier information’ should be collected by a central digital platform. That means that, no matter which public sector body you were bidding for, there was one place that stored this data and you would not need to fill it in again unless it needed updating.

Pretty good, right? This is a good first step towards hacking back the PQQ bureaucracy. But could they go further?

As it stands the ‘core supplier information’ is pretty thin – name, address, financials and the like.

But with the Common Assessment Standard, we have an industry agreed question set primed and ready to go. A single additional line in the new regulations could commit clients to ask for the CAS information for any construction opportunity. Doing so would revolutionise the sector, axing huge swathes of cost at the stroke of a pen.

And the Government could be even more ambitious. The Bill only applies to public sector bodies. It is unlikely that the mandate for the Bill could be extended unilaterally to the private sector too. However, what if the option was left open for the central digital platform to be usable by private clients too, if they wanted to?

Given that the savings released would be returned in lower costs for construction, it seems likely that this would be an attractive offer, providing benefits for all parties at a cost that would largely have been paid anyway through the implementation of the Procurement Bill.

So, as it stands, in an economically challenging period for the Government, there is £1 billion on the table ready to be grabbed. Will it take the opportunity?