First of a three part series on frameworks: Love them or loathe them, more and more public construction spend is going through frameworks
Approximately 70% (or £30bn a year) of the UK’s public sector construction spend is awarded through frameworks. They may not be sexy, but, if your business operates in the public sector, being on the right frameworks, and making the best of them is critical. Missing out on an OJEU-advertised procurement process may mean waiting another four years to work with that client again. If the procurement process is flawed, ineffective or simply unfair it impacts on businesses and livelihoods.
A wide range of frameworks exist covering the diverse sectors that utilise public funds. These frameworks vary widely in spend, scope, volume, services and effectiveness. When this government came to power it asked retailer Sir Philip Green to review efficiency in public procurement. His review found that government had failed to make the most of its scale, buying power and credit rating. This is very true in the public sector construction industry where it seems very little has been done to aggregate spend effectively, with widespread evidence of lost opportunity and wastage.
So why is there such a proliferation of frameworks in the market? Do these frameworks work for the public sector clients who use them to build their houses, roads, schools and hospitals? And what does the future of hold for major frameworks that influence so much of our industry?
Contracting authorities have varying approaches to the selection of contractor and consultant suppliers through frameworks. Examples include:
- Healthcare’s Procure21+ framework is a contractor led national framework with six suppliers
- The Hones and Community Agency has a national multi-disciplinary consultancy framework with 18 engineering-led designers
- The Ministry of Justice has split both consultancy and contractors into regional supply chains to complete its capital programme
- Scape offer a full suite of single supplier national frameworks open to over 450 public bodies.
These are examples of good frameworks and illustrate the variety of framework approaches. There are many others in a myriad of regional and local frameworks with various combinations of service lots and value bands. Some work well. Some don’t.
The uncontrolled increase in the establishment of frameworks has created a patchwork of overlapping frameworks
Each framework is designed to meet a specific need. The better frameworks will have given consideration to the anticipated project pipeline and the market capability to respond to these needs. It is a positive trend to see more effort being made to consult with suppliers prior to advertising the procurement process in the OJEU.
The uncontrolled increase in the establishment of frameworks has created a patchwork of overlapping frameworks. Inevitably this means that whilst many frameworks boast a wide range of potential clients and opportunities, this bountiful flow of projects does not always materialise. Some frameworks have a healthy pipeline of opportunities regularly being called-off; others will literally never have any appointments from them. It is evident that some frameworks exist only to comply with (or possibly get around) the European Procurement Rules, whilst others have effective performance management processes that will ultimately provide better value for money for the public purse.
Businesses have been established and grown on the back of targeting public sector frameworks. In some cases, it is critical to just get on a certain framework, and then worry about getting any appointments and delivering contracts at a later date. Tactical pricing has become commonplace.
So frameworks have become an important part of our industry landscape. How they can become more effective and how they might develop over the coming years is shown in the following two parts.
Charles McSweeney is a senior director at Sweett Group