With the introduction of the Procurement Act 2023 this month, suppliers will now benefit from a simplified and more transparent process to work with the public sector but also gain greater insight into the decision-making process for awarding contracts. This is undoubtedly a good thing for all parties, and a major step forward to help level the playing field for organisations that may have felt shut out or dissuaded by the previously complex and fragmented procurement regime.
There’s a lot to applaud about the new Act, but I want to look beyond some of the more obvious improvements and specifically focus down on Section 16 and 17 of the legislation. Both sections refer to ‘Preliminary market engagement’ and here I believe lies an opportunity that could prove transformational for the efficiency and effectiveness of public sector procurement – while also boosting relationships and trust.
Let me explain this through an example that unfortunately is all too familiar within the existing procurement framework. A tender comes out to market for the replacement of 500 fire doors across three buildings – the submission window is two weeks. The client’s consultant has provided an indicative cost range so there should be no surprises when the bids land. For suppliers, this limited timeframe will often not permit an on-site visit to validate the real-world scope of the fire door replacement programme – so we use our expertise and knowledge of similar projects to calculate a price, which is then submitted.
If we assume that the majority of suppliers will not have visited site before submitting their bids, then the client has a collection of expertly guided, but nevertheless speculative costs for a project with a host of unknowns – which may or may not be priced in. The client makes a decision to appoint a supplier and the pre-construction activity commences. It’s potentially at this point that the supplier gets, for the first time, to see what they have agreed to deliver, and no prizes for guessing that a simple fire door replacement project is not what it at first seems.
On site investigations uncover a host of compliance problems in existing fire compartmentation, as well as asbestos issues that were not disclosed as part of the original door replacement scheme. Enter the ‘variations’ – or as everyone involved in the process more accurately terms them – ‘the relationship killer’. Once the full scope of the project is calculated – the original bid price is a distant memory and the client can’t help feeling that they have been misled, resulting in a damaged client/supplier relationship that often sets the tone for the entire programme.
But it needn’t be this way, and now Section 16 and 17 of the Act provides an opportunity for a total reset in that vitally important client/supplier relationship. The legislation openly frames that preliminary market engagement is acceptable, with due attention given that it shouldn’t advantage any party over another. Early engagement can be given to develop the authority’s requirements and approach to procurement, and to prepare the tender notice and associated tender documents. This really is a game changer if clients take the opportunity to engage specialists upfront to help develop a true scope of works for a capital programme.
Early expert knowledge won’t necessarily reduce costs – these will be set by the market, but they will provide clarity and transparency on what work is actually required. The quality and realism of tenders will take a quantum leap forward and for clients, the goal of no surprises will be a more realistic expectation every time. And what about the suppliers, well we’ll get the chance to use our expertise to define the challenge and then, in a fair and transparent way, we may also get the chance to do what we do best – implement safety upgrades that protect lives.
Trust and relationships matter and a breakdown in either or both can have profound consequences for the delivery of vital building improvement works. The Procurement Act 2023 unleashes fair opportunity for every supplier that believes it can make a difference to the public sector, but I think that Section 16 and 17 may just be one of the most consequential relationship resets that our industry has seen in decades.
