Social housing must lead the way in demonstrating better procurement culture

Grenfell was a wake-up call for the housing and building sectors, writes Iain Taylor. Better procurement is essential to engineer genuine value rather than crude cost-cutting – and social landlords must lead the way

EVIDENCE from phase two of the Grenfell Inquiry has painted a damning picture of the procurement behind the tower’s refurbishment.

Lawyers have described a disregard of procurement obligations in a way that likely affected the quality of the building, saying that no questions were asked as to whether safety would be compromised by the cost reductions that were procured.

The Inquiry has heard how public procurement legislation was circumvented, procurement procedures breached, purchasing processes manipulated and the procurement of works ‘singularly ill-managed’ by the organisations involved.

Wake up

Iain Taylor
Iain Taylor, category manager of planned works, Procurement for Housing.

This is a major wake-up call for the housing and building sectors. The un-coordinated way in which construction and repairs work is often procured must change.

The skills and qualifications of the people responsible for procurement is critical to this – something that is being addressed by the Competence Steering Group set up after the Hackitt Review. Their ‘Raising the Bar’ report found many examples across the industry of procurement being done by people who didn’t have the right experience or know-how.

The report said that this had led to a culture of cutting costs and quality.

I work in social housing procurement and I see these practices, which, unfortunately, are fuelled by the construction sector’s low margins and high levels of competition.

However, I also witness lots of good work, often led by housing providers who are constantly striving to balance quality with cost savings. A moral imperative to protect and enhance the lives of tenants is something that has driven the social housing sector for over a century.

As a result, I believe registered providers are well positioned to take a lead in overhauling the culture of dysfunctional procurement that has permeated some parts of the construction industry.

Social housing must lead

This can be done by sharing examples of the robust and innovative ways that housing organisations consider safety and social value equally alongside cost reduction.

It can also be achieved by the sector demonstrating appreciation of and compliance with new competence requirements for procurement activity.

Another step is social housing providers showing contractors that they won’t lose out to their corner-cutting rivals if they follow a new, more balanced regime.

Know what ‘quality’ means

Understanding quality better is another way to eradicate poor procurement practices.

Clients know that quality must feature heavily in their tender scoring criteria but beyond high standards and safety, many don’t know what they want from quality.

The quality aspect of a tender exercise should never be standardised. Quality varies widely between social landlords and depends on that provider’s tenants, properties, geography and local economy.

My advice is that organisations looking to procure repairs or construction should think hard about what they want from a contract, as well as the community themes and social requirements that are important to them.

Putting carefully considered principles in place at the start of a contract (that can be measured over time) and ensuring they are not watered down as work progresses, will give strong ethical direction to that project.

Redefine ‘value engineering’

The Grenfell Tower Inquiry has revealed how value engineering was a constant focus of discussion between the relevant parties.

But it has also shown how the term had two quite different meanings, which were intrinsically linked: value-adding and cost-cutting, often with an emphasis on the latter. I’m keen to shine a light on this and reclaim the phrase, which has begun to feel meaningless and phoney.

In procurement, true value engineering is about creating a broad and balanced range of benefits, from social impact to sustainable supply chains, price reduction to contractor innovation. It’s about nurturing long-term value rather than quick financial returns and demonstrating imaginative ways of achieving this, such as preventative approaches, standardisation, strategic partnerships and investment in technology.

If the value engineering process ever compromises performance or safety, then it instantly loses its integrity.

Take responsibility

A recurrent theme in phase two of the Grenfell Inquiry has been buck-passing.

Evidence given in January illustrated the fragmented procurement process with different stakeholders blaming each other over the damaging decisions that were taken around specification, sourcing, design and construction.

Last year, the Government’s proposals for reform of building safety regulations proposed a new regime with defined duty holders who have clear responsibilities throughout the stages of a building’s development and occupation.

It is now being proposed that a Procurement Lead with a comprehensive high-rise residential building procurement competence level must be involved at every stage of the RIBA Plan of Work.

They don’t have to be a qualified procurement professional, but they must have the required level of procurement competence as defined in the Competence Framework developed by the Government’s Competence Steering Group.

Having managed planned works in the housing and construction sectors for over 10 years, I’m keen to highlight the positive, enabling force that procurement can become when it is done well.

Social housing must step up to show other sectors how things should be done.

NH

Iain Taylor is category manager of planned works at Procurement for Housing.

 

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