Tim Oakley, Head Consultant at the London Housing Consortium, paints a post-Covid picture of public sector procurement
The first Covid-19 lockdown marked a sudden and radical change for public sector housing and construction procurement. The closure of offices and sites initially left local authority and housing association schedules in tatters, with public bodies unable to plan the completion of existing projects or to launch new projects. The preparedness of procurement staff, both on the supplier and buyer side, to carry out their respective duties was placed under significant stress.
As the crisis continued throughout the year, it became obvious that contracting authorities and their suppliers would need to work in partnership to plan an eventual exit from relief and transition to new, sustainable operating models. This is what has been happening over the past ten months.
Indeed, the London Housing Consortium (LHC) is taking a very positive view, as so much of the disruption of 2020 has accelerated a process of change that will bring many benefits for the years ahead. LHC has certainly used this pause- button period to re-evaluate its own processes and to develop more effective procurement practices.
What it has learned through lockdowns is that construction, specifically construction procurement, has been able to innovate to cope with the crisis. LHC has also discovered that, on the whole, the industry can act responsibly and fairly to support the response to Covid-19 and to protect jobs and the economy. Flexible working patterns have been successfully adopted, and programmes of work have been extended wherever necessary to increase the ability of potential tenderers to engage with the processes.
Despite the occasional frustrations of video calls, webchats, webinars and screen shares, these tools can be used very successfully to undertake effective pre-tender engagement, without devoting endless hours travelling to physical meetings. Online engagement has opened the electronic door to greater participation.
LHC has also proactively sought opportunities to extend access for small- and medium-sized businesses and to make public sector procurement work better for minority groups that were previously underrepresented. Youth and entrepreneurial organisations are now also being provided with the opportunity to pitch new and exciting disruptive ideas to procurement organisations and break from the tried and tested solutions.
Examples of this include the latest frameworks for architectural design, developed in association with Southwark Council. These now offer public sector procurement teams in London boroughs a new pool of talent to choose from – a selection of architectural practices that genuinely reflect the ethnicity, socioeconomic backgrounds and other demographics of the city. Many of these practices have not had the opportunity to access public sector work in the past. LHC’s experience of developing these frameworks will undoubtedly influence all other procurement practices in future.
In their simplest form, the Framework Alliance Contracts (FACs) could be described as a system of pooled knowledge. LHC’s technical experts develop specifications for products and services; the frameworks are then set up according to quality, value and track record (in accordance with the EU Procurement Directive). The procurement of products and services using the frameworks negates the need to allocate resources to navigate the legal or technical areas of procurement. For small to medium enterprises, the frameworks can provide the resource they do not have. For local authorities, charged with building residential properties and public buildings on a regular basis, the frameworks offer peace of mind that all related legal requirements and specifications have been through these assessments, and they offer access to knowledge as well as reliable processes.
LHC has also introduced FAC-1 in all its procurements, with the aim of sharing objectives, introducing transparent performance measurement, aligning commercial interests and setting up collaborative governance, all of which collectively underpin shared risk management. The key benefit of alliancing in this way is that it helps the whole construction supply chain to develop long-term relationships. FAC‑1 provides a new style of framework agreement, which achieves much higher satisfaction rates between all parties. Disputes are reduced, and alliance members can more easily work together to achieve greater efficiency, value outputs and cost savings. This approach is available to all public sector procurement teams, and LHC hopes it will be widely adopted.
New public contracts regulations in 2015 forced procurement teams to consider key issues, such as sustainability, whole-life costs, life-cycle analyses and social value. The new regulations were designed to lead to greater competition, greater savings and greater community benefit, without compromising on quality. And, generally, much of this has happened.
But there is so much that still needs to be done to ensure that outcome-based procurement is better understood and more widely adopted. This will continue to be our focus for 2021, along with increased emphasis on pan-industry collaboration – the only way to ensure we truly build back better.
Formerly the London Housing Consortium, LHC has extended its reach to the whole of the UK
(lhc.gov.uk/where-we-operate). It provides free-to-use framework agreements, used by local authorities to improve procurement practices, which, in turn, promotes the better building of social housing and public buildings. It also brings buyers and suppliers together to build, refurbish and maintain social housing and public property more efficiently and cost effectively, to benefit the local community.
For more, visit lhc.gov.uk