Spotlight on Local Authority Construction Procurement Practices

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Spotlight on Local Authority Construction Procurement Practices

A recent survey has provided an invaluable insight into some aspects of construction procurement by almost 200 English councils.  The survey was carried out by the Specialist Engineering Contractors’ (SEC) Group which represents the largest sector in UK construction (by value).  The key results are as follows:

  • Significant progress has been made in standardising the pre-qualification process.  27% of local authorities are now using PAS 91 (the standard pre-qualification questionnaire) exclusively.  Furthermore over 36% are using the standard questionnaire published by the Crown Commercial Service.
  • There was no standard approach to assessing firms’ technical capabilities.  Only 6% of authorities valued trade association membership while 18% relied on references.  20% of councils relied on information about previous experience and 19% simply relied on the responses to their questionnaires (which may not have addressed technical capabilities in any detail or at all).
  • Only 11% of councils insisted that tier 1 contractors use standard questionnaires down the supply chain.
  • Of the two competing standard construction contracts (the New Engineering Contract [NEC] forms and the Joint Contracts Tribunal [JCT] forms) local authorities preferred the NEC for large capital works; JCT tended to be used for small value works.
  • Almost 40% of councils require tier 1 contractors to use standard sub-contracts.
  • Take-up of project bank accounts (PBAs) – where payments are ring-fenced in one pot and discharged simultaneously to the supply chain – by councils remains slow but their use is increasing; fourteen councils are considering using them.

The lack of take-up is generally due to lack of information about PBAs rather than resistance to using them.

SEC Group CEO, Professor Rudi Klein, said:

“I take heart from the fact that more and more councils are now using standard pre-qualification questionnaires.  I hope this trend continues because, across the UK, firms are wasting over £1bn a year on needlessly filling in questionnaires and duplicating this exercise many times over.”

SEC Group is urging the Government to make the use of PAS 91 a regulatory requirement under the Public Contracts Regulations 2015.

2016-08-22T14:49:57+00:00 4 July 2016|Press Statements|