Last edited 26 Aug 2020

Procuring for value report

In July 2018, the Construction Leadership Council (CLC) published ‘Procuring for Value’, written by Global Board Director of Rider Levett Bucknall (RLB) and industry expert Ann Bentley.

It followed publication of the government’s Construction Sector Deal, and the report of the Public Administration and Constitutional Affairs Committee (PACAC) which found the collapse of Carillion was in part the result of the government’s procurement policies. It also builds on CLC’s 2016 Farmer Review ‘Modernise or Die’.

The report sets out recommendations for maximising the impact of the sector deal and calls for a sustainable business model for the whole supply chain. It recommends the development of an industry-wide definition of value that goes beyond capital cost, allowing procurement on the basis of whole-life value and performance.

The report also proposes further reform and standardisation of the pre-qualification process, steps to measure and reward good performance, reforms to retentions and new forms of contracts.

It suggests that simply bringing the whole industry up to the current average productivity level could save more than £15 bn a year.

Ann Bentley said; “The Procuring for Value report is a fundamental strand of our policy, outlining the best practice for the industry delivered through standardisation and digital technologies. Construction needs to change. Every rung of the supply chain needs to take responsibility and understand their impact on the industry and the larger financial picture that is at play. The report highlights as an industry how we can do just this.”

NB P18 of the report states; 'The widespread and consistent use of industry best practice would produce immediate productivity gains across the whole sector' and suggests that; 'A digital, industry-wide, knowledge platform, where best practice is curated, shared and challenged, that is easy to understand and that is accessible does not currently exist'. We agree with the first point, but strongly disagree with the second.

The report is available to download from the CLC website here.

In August 2020, a ‘Value Toolkit’ was launched, intended to help policy makers and clients make faster, informed decisions which incentivise industry to respond with innovative, high value solutions.

Minister for Business and Industry, Nadhim Zahawi MP said: “This brilliant new initiative reflects the Government’s desire to ensure we embrace a construction procurement process that has clean, green innovation at its heart. It complements our commitment to boost the productivity of this vital industry as part of our economic recovery."

Ref https://constructioninnovationhub.org.uk/new-toolkit-signals-shift-towards-value-based-decision-model/

Download: An Introduction to the Value Toolkit