Employment and skills strategies are being implemented across the construction industry but care needs to be taken when inviting tenders and drawing up the contract
On 28 October last year, Lord Mandelson wrote to all central government departments calling on them their construction procurement muscle to ensure that 20,000 apprentices were engaged. The lead taken by the business and innovation department to delivering employment and training in the construction sector was followed almost immediately by guidance for government departments sponsored by ConstructionSkills.
This guidance champions a “client-led approach” and mirrors that previously produced for local authorities and subsequently rolled out by the Homes and Communities Agency (HCA) for housing associations and other social landlords. Pretty much every public sector client with a construction budget is being given the clearest possible pointer as to how an employment and skills strategy can be implemented on any size or type of project.
But is this not contrary to the constraints of EU procurement? The answer, to the surprise of some public sector clients, is “no”, provided that a careful path is steered from publication of the Official Journal advertisement through to the award and implementation of the construction contract. The Public Contracts Regulations 2006 do permit consideration of “secondary requirements” in a public procurement exercise, whether they relate to protection of the environment or providing work for the long-term unemployed or other training and skills initiatives. Experience in these matters can be assessed as part of a bidder’s technical or professional ability.
The tricky bit arises when issuing invitations to tender. First, the employment and skills strategy set out by the client cannot point directly to initiatives involving only local people or businesses. It should link these initiatives to the project itself, so that they are geographically local, but the initiatives need to be open to any business from any jurisdiction so as to maintain a level playing field.
Second, the proposals submitted by bidders for complying with an employment and skills strategy cannot themselves be evaluated at tender stage. The strategy needs to be part of the client’s project or framework specification that is priced by bidders with a clear commitment to implement, so the client needs to know what it wants from the outset.
This is where the ConstructionSkills guidance comes into its own, being based on the outputs from 40 National Skills Academy for Construction projects. These have created benchmarks as to what employment and skills commitments it is reasonable and appropriate to ask from contractors. This gives a public sector client somewhere to start in terms of, for example, how many apprentices it is reasonable to ask a contractor to engage on a project of a particular value, calculated as an appropriate number of person weeks. Although this is not an exact science, these benchmarks for apprentices and for a whole range of NVQ and other qualifications, unblock the logjam for a client as to what should form part of its specification against which bidders price.
The employment and skills initiative is not a stick with which to beat the contractor, but is a part of the overall set of systems for delivering the project
As to what that price should be, our experience of the National Skills Academy for Construction has taught us that employment and skills initiatives should benefit trade contractors by enhancing their skills and efficiency, and should not be seen as a burden that has to carry a cost premium.
That said, unlike skills academy projects, the client-led approach is not voluntary. Its procurement process culminates in specific contract clauses requiring the implementation of an employment and skills plan and method statement and the measurement of performance against specific KPIs.
In terms of enforcement, the employment and skills initiative is no different to any other aspect of the project specification. It is not a stick with which to beat the contractor, but is a part of the overall set of systems for delivering the project, overseen by the project manager.
Government departments and the HCA are already implementing this approach, and a some councils are all reviewing their procurement policies and documentation so as to pursue an equivalent approach.
It is also important to emphasise the positive response from the marketplace, with contractors such as Costain and Leadbitter keen to take a lead in demonstrating that employment and skills strategies will work. And the word is that the opposition would support the same policy if it wins the election, so in this field it looks as though ConstructionSkills has an initiative with widespread support.
David Mosey is head of construction at Trowers & Hamlins