Public sector bodies are facing their tightest budgets for decades. Every aspect of public sector operations, including construction, must therefore be based on value. Robbie Blackhurst, managing director of Procure North West discusses why achieving best value in procurement isn’t just about a search for the cheapest possible route to completion though, and how it can begin at the procurement process.
The majority of UK public sector bodies, from local councils to the NHS, are cash-strapped and looking to minimise costs wherever possible. The procurement process is just one area where public sector organisations are looking to stretch their capital as far as they can, making value a priority when it comes to construction projects.
Value is about far more than cost. Best value procurement can be the difference between a cost-effective project that truly adds something to a local area, and a budget draining build of poor quality, which is not appreciated by the community.
The early bird gets the best value
To achieve best value in construction, it should be considered from day one. Public sector bodies need frameworks that get contractors on-board early, involving them in key decisions from the initial stages. Selecting the right contractor is vital but it’s not just about going for the cheapest priced contractor.
Of course, in today’s economic climate, cost is a considerable factor when selecting who will construct a project but it’s important to focus on the other types of value they can bring too, such as innovation, social value, sustainability and quality.
By getting involved in the construction process early, framework contractors will have more time to support clients, by considering things such as its level of supply chain engagement, the strength of the workforce and the availability of resources.
In any business, planning, and planning early, is a recipe for success. At Procure North West, we make sure we’re a part of the pre-construction process at the initial stages, and this goes a long way in achieving best value.
Limited risk to achieve value
As we’ve discussed, cost is still a significant factor when it comes to achieving best value procurement, and the overall cost of construction is hugely important to a struggling public sector.
Poorly procured and poorly managed construction projects have a tendency to spiral when it comes to cost and time, and this can have a huge impact on the end-value of the build and what it actually brings to a local area.
For an education provider that needs a new school to be constructed or fitted out in time for the new term in September, it will be vital that a contractor can be trusted to deliver the project on time and to budget, otherwise its value to the local community will be minimal.
Frameworks need to work closely with both public and private sector parties to help support project delivery, sharing framework-wide best practice to reduce potential risks. By offering more regular reports, frameworks can minimise the chance of time and cost being higher than expected, offering more transparency during the construction process.
Knowledge is power
In construction, knowledge and expertise are hugely important and this is a major factor when it comes to achieving best value. But the need for knowledge doesn’t lie with one party or sector. Frameworks, contractors and third parties all must have the correct expertise and experience to deliver a project to a high standard.
An experienced contractor may be able to cut costs and timescales by implementing innovative approaches and use their expertise to avoid working practices that may be detrimental to value. A knowledgeable framework can offer an alternative view of the project and potential obstacles, assisting public sector bodies with valuable advice at all stages.
Best value construction, best for the community
Cost is inevitably a primary concern for public sector bodies in today’s economic climate. But by thinking of the whole-life cost of a project, we can ensure best value, not just in terms of cost, but also in what a project can mean to a community.
Sustainability, social value, innovation and risk are equally important factors in best value procurement, and this must be acknowledged by construction frameworks if we are to deliver meaningful public sector construction projects in the face of ongoing austerity.