Mike Burt, the Treasury’s head of procurement practice and development, revealed that government departments will have to focus on the private finance initiative, prime contracting or design-and-build routes. They will still be able to use traditional procurement methods, but only if they offer better value for money. In his last speech in the job, Burt said the decision was intended to quicken changes to government procurement. He said: “We brought it forward because we wanted to focus on speeding up the implementation process.”
Burt is leaving for the private sector at the end of this month after 27 years with the civil service. He has latterly been responsible for implementing the Egan reforms in government.
But contractors at the conference raised concerns about the timing of the change. Colin Harding, chairman of Bournemouth-based George & Harding, said he thought that the implementation was too fast for smaller firms. He said: “The government keeps telling us that they want to involve small companies but I haven’t yet seen how they propose to do it.”
Richard Lumby, managing director of Carillion subsidiary Crown House Engineering, said it would take a long time for the industry to digest the changes. “My fear is that the industry is going to struggle to come to terms with what it all means, in particular, working it down the supply chain.”
Burt was keen to stress that the government was not abandoning traditional procurement. He said: “We are not saying that those three are the sole opportunities for projects. “Neither are we saying that any of those three will be the prominent method. There is a flexibility behind this – it’s not just one solution.”
We want to focus on speeding up implementation
Mike Burt, Treasury
Burt said there were no specific targets for the percentage of work let using the three preferred methods. He said: “I expect to see more and more projects going through the three methods as the years progress. I don’t think there is any need for Egan-like targets.”
Burt also announced amendments to the government’s design-and-build contracts and to Defence Estates’ prime contracting initiative.
The single-stage and two-stage design-and-build contracts will include risk management, whole-life costing and value engineering.
Prime contracting projects will be split between one-stop shop contracts, which includes facilities management, maintenance and rebuild, and major stand-alone capital projects.