11 May 2012
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Paul Morrell: Change is coming, albeit slowly

On the one hand, it might seem to be a bad time to be promoting change, and an equally bad time to ask people how they feel about it. The market is so tough that running an opinion survey on industry reform at a time like this is a bit like asking somebody lying in the street after a car accident: “Yes, but how are things apart from that?”

Nonetheless, it is in such challenging times that market share is lost and won, and when progressive businesses open their minds to better ways of working — and the results of the CM/CIOB online survey of members and readers on the impact of the Government Construction Strategy need to be read in that context.

There would be many ways of summarising those results, but here is one: by and large the changes proposed in the Government Construction Strategy are considered a step in the right direction, but take-up is slow and there is scepticism about the government’s ability or will to bring about real change.

If that is a fair summary, then I think it is also a fair reaction — or at least an understandable one. But if change is to last it is also bound to be slow, firstly as construction projects themselves take years to work through the system, and also because both clients and their suppliers have generations of embedded practice to rethink.

Mystery shopper service

The industry can help, though. For example, as far as central government is concerned, the use of the PAS91 pre-qualification questionnaire (PQQ) is mandatory, and any contractor or consultant that is asked to pre-qualify on any other basis should let us know (anonymously if they wish) via the “mystery shopper” service operated by the Cabinet Office. This reporting facility also extends to problems on contracts initiated by the wider public sector — even though central government does not have powers to dictate procurement policy for every purchasing organisation, the Cabinet Office will take up the issue to see if it can bring about change.

It will take a while, but eventually we’ll be able to ask not whether contractors and consultants have been asked to complete a PAS91 PQQ, but whether they have ever been asked to qualify on any other basis.

The same principles apply to fair payment. Since January 2011 every government contract is required to make it an obligation to pass payment down to tier 3 within 30 days, and we want to know if that is not happening.

As far as the broader picture is concerned, there are many positive responses, but there are two areas where there has been a significant negative response, and where I would seek to persuade respondents to think again. The first is on project cost benchmarking, where 35% believe either that the exercise is meaningless, or that it will lead to mediocrity. But surely a government that is spending taxpayers’ money should show an interest in how that money is being spent, or seek to learn how what can be achieved in one place can be achieved in another?

Of course, the more important thing is to achieve value in the performance of the built asset over the whole of its life; but there is a high degree of industry consensus that we can buy that value at a lower level of capital cost than we have done before.

The second area relates to procurement, where only a third of respondents see change as vital. In construction, procurement is not just a process: it also structures relationships between the client and suppliers, and down through the supply chain, and is therefore a major influence on behaviours.

Integrated proposition

I agree that teamwork is key to projects’ success, but I cannot agree that the chances of achieving this are the same under any method of procurement — and the new approaches that we are looking at are designed to encourage early contractor involvement, an integrated proposition from the supply side, and collaboration right through the supply chain, unlocking the potential for innovation. This is not “tweaking”.

All in all, then, it is no great surprise that there are some negative responses, or scepticism, in an industry where there has been many calls for change. Clearly, though, there is a need for the government to live up to its strategy, so we will stick at it, always ready to listen to ways of improving either the strategy or its implementation — and will take the disappointment that there is not more change, 11 months into the strategy, as a positive sign that the change itself is welcomed.

Paul Morrell is the government’s chief construction adviser