One advantage of writing for this magazine is that many industry professionals send their thoughts to me. I read them carefully and then, unless they are personal correspondence, they are circulated around the companies or organisations of which I am chairman or director.
One interesting document that was sent to me recently was Drivers Jonas’ Construction Industry Review 2000 progress report. For this, the company had contacted construction companies in 1998 to see how far they felt the Egan process was being followed by clients.
The findings then were that progress was slow, and that any change that was taking place was led by the private sector. Only 30% of firms contacted saw any evidence of the government becoming a best-practice client.
That was particularly disappointing because it was a core recommendation of Constructing the Team six years ago.
It was also a specific aspiration of the Construction Clients Forum and the Central Government Clients Panel, and of many other more recent initiatives, such as the Treasury’s Achieving Excellence programme.
Drivers Jonas carried out a review 12 months later. This time, 150 leading contractors were contacted, 75 of whom responded.
There were some positive findings. Sixty per cent of respondents now saw some evidence of the government becoming a best-practice client – double the figure of the previous year.
The use of the New Engineering Contract had risen from 5% to 15%. The proportion of contracts based on partnering had risen from 22% to 26%. There had also been significant increases in cost savings, thanks to the development of standard products and processes and improvements in designers’ knowledge of the performance of components and materials.
The survey referred specifically to “the government”. Perhaps that means central government alone, but my experience is that housing associations are increasingly committed to best value and partnering, not only for their construction and refurbishment work but also for their asset maintenance.
Local authorities frequently have problems in convincing elected councillors that best practice is the way forward
The associations are now being followed by local authorities, some of whom are enthusiastically adopting best-practice procurement even though the officers frequently have problems in convincing elected councillors that this is the way forward.
Some of the most interesting Egan demonstration projects are being sponsored by local government. The excellent support for the local government taskforce conference in Nottingham a few months ago showed the strong interest by this large public sector client in its new statutory duty of best value.
I greatly welcome this. When I was researching and writing my report in 1993-94, the assessor of the Chartered Institute of Purchasing and Supply, Frank Griffiths, had great difficulty in awakening any interest in construction industry reform from local government.
It took more than two years to persuade the local authority associations to join the Construction Clients Forum and the Construction Industry Board. I now spend much time working in seminars with local authorities on partnering and best value.
The Drivers Jonas survey also revealed some concerns. There had been a decline in the number of firms with quality assurance accreditation, both for management and construction, although there were more firms in the process of obtaining it.
The number of clients paying for substantial site investigation costs fell from 57% to 53%, but that may reflect a growth in design-and-build risk transfer.
Although 75% of contractors believed that their tenders were evaluated fairly, the disturbing conclusion was that 25% thought they were not. Perhaps Drivers Jonas should enquire next year into the specific perceived grounds for “unfairness”. After all, there are many excellent – and fair – reasons why the lowest bid should not be accepted.
While the public sector is increasingly embracing best practice, many private clients still have a long way to go. Some are outstanding leaders in driving change. The big supermarket chains, for instance, have frequently achieved the 30% real cost reduction target set, to widespread horror, in 1994’s Constructing the Team. Some commercial developers, such as Argent and Slough Estates, are also real pace-setters.