"There will therefore be no need for local authorities, housing associations, 'freestanding' educational establishments, or NHS trusts or health authorities to maintain their own lists." Furthermore, Latham recommended that subcontractors working in the public sector should be registered, and that main contractors should be required, as a condition of contract, to employ only registered firms on public sector projects.
What was behind this recommendation? A massive amount was – and is – spent by contractors and consultants to qualify separately for a myriad clients. NHS trusts, local authorities, private sector employers and even contractors still love their little lists, irrespective of the overheads and fees incurred. But the pain does not stop there. The industry is full of bogus operators peddling lists and schemes. (See Geoff Allen's letter, 29 June, page 35). This is exacerbated by the growing number of schemes available through electronic means or the internet.
Enter, stage left, Constructionline. This was set up as a joint venture between the DETR and Capita to become a national prequalification register. Over time, it would replace the lists that abound in the public and private sectors. It would include any contractor or consultant able to meet the technical, financial and commercial prequalification standards.
There was huge support for Constructionline from the industry, which wanted it to succeed and blow out all the other lists – bogus and non-bogus – out of the water. But now, some years down the line, we are no nearer a national register.
In spite of exhortations from the Treasury and John Prescott, the deputy prime minister, public sector procuring agencies have been less than enthusiastic about Constructionline. (Although there has been a more positive response from the public sector in Scotland.) Even if they use it, they will also still use all or part of their own lists.
In spite of exhortations from the Treasury and the deputy prime minister, the public sector procuring agencies have been less than enthusiastic about Constructionline
All right, there may have been shortcomings in the service offered to clients by Constructionline, but nobody in government has addressed these and now the industry is withdrawing its support. The fact is that firms are refusing to renew their subscriptions because they do not believe that they get added value for their outlay.
So where do we go from here? A possible model for the way forward is provided by the state of California. In 1999, it introduced legislation to facilitate the use of prequalification lists in the public sector. The legislation authorises every public sector client to adopt a prequalification system and describes certain requirements that must be met if the client chooses to adopt such a system; but it is not mandatory.
Whenever a public sector client decides to institute a prequalification procedure, it must:
- Use a standardised questionnaire and financial statement (a model questionnaire has been produced by the state government)
- Adopt and apply a uniform system of weighting bids on objective criteria as supplied in the completed questionnaires and financial statements
- Create an appeal procedure for contractors denied prequalification.
My advice to the DTI is that, as a matter of priority, it should consider whether the Californian legislation is an appropriate model for the UK. Primary legislation may not be required. For example, it may be sufficient to introduce new regulations under the 1999 Local Government Act (which introduced the duty of best value) to provide a standardised approach to prequalification by local authorities.
One problem remains. California has a licensing system for contractors, whereas the UK does not. I suggest that any law on prequalification should simply enable the secretary of state to recognise third-party accredited qualification schemes in the industry. Only firms qualifying under such schemes would be eligible for prequalification in the public sector.
Rudi Klein is a barrister and chief executive of the Specialist Engineering Contractors Group.