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Construction and Procurement Delivery: Procurement reform

Construction and Procurement Delivery (CPD) Chief Executive Des Armstrong discusses the organisation’s name change, a shift to co-design for better outcomes for Northern Ireland and the potential impact of Brexit.

In October last year, the transfer of property management staff from Enterprise Shared Services to CPD created the impetus for a long sought after name change from the Central Procurement Directorate to Construction and Procurement Delivery.

Outlining why the name change was necessary, Des Armstrong explains that CPD was established to help clients across the public sector deliver successful projects, had an established brand within the public sector but also recognised that the original name did not fully reflect the organisation’s remit.

“I think it’s important that an organisation can quickly disseminate its purpose, allowing both staff to buy in to this ethos and customers to understand it,” says Armstrong. “While procurement is a key area of work, CPD services range much wider into project delivery, contract management and project assurance.”

The name change is part of a broader priority within the organisation to move the whole service provision away from being process-driven to “getting things done in a way the delivers positive outcomes”.

At any one time, CPD is involved in the delivery of more than 1,000 public sector projects, all of which are enablers of the Outcomes Delivery Plan. With the inclusion of Property Services, CPD now has five divisions.

The Chief Executive says the recent inclusion is an example of the evolving journey CPD has been on since its establishment and a key facet of ensuring the wide-ranging organisation continues to be effective is a focus from senior management on ensuring there is a consistent approach to the organisation’s people.

“We consider ourselves an organisation that is professional and made up of professionals,” he stresses. “That means that we support and facilitate all staff to make a contribution to our service provision, whether it’s in policy development, leading on a building project or making sure that operations work in a way that allows everyone to get the job done.”

Difficulty in attracting procurement professionals is a problem that spreads well beyond Northern Ireland and Armstrong admits that there is a challenge in attracting new professionals. However, he is proud of the work to date which has seen CPD successfully skill-up “civil-servant generalists” into chartered procurement professionals. CPD currently has over 60 chartered procurement professionals, alongside other professionals in specialist construction and project management. Although, Armstrong is quick to point out that the organisation’s output is a combined effort: “I am always keen to make sure that all the staff in CPD are respected for the contribution they make to the organisation.”

The Chief Executive also sees plenty of opportunity for professionals joining or within CPD, to transfer their skill, such as project management experience, across the civil service. Especially within the context of the Procurement Board’s strategic priorities driving a more commercial focus.

“We have seen staff move off to other parts of the civil service, taking with them a general transferable skill, and I think that’s a great thing. CPD’s people have skills which I think are going to be in great demand going forward,” he adds.

While procurement is a key area of work, CPD services range much wider into project delivery, contract management and project assurance.

Transformation

Armstrong describes CPD’s move away from what was often-perceived as ‘policy in a tower’ to a concept of co-design, working closely with their supply base to better manage the procurement process and the functionality of that process.

Key to that engagement has been forums established to bring together CPD’s professionals and industry professionals. The long-standing Construction Industry Forum, for example, has provided a template for similar platforms on digital services and improving SME engagement.

“The Construction Industry Forum allows CPD and industry to talk through a range of issues, not necessarily just procurement, but ultimately for better outcomes for the citizen and for business because Northern Ireland needs a sustainable construction industry. The feedback we get from those groups is that engagement is producing real benefits in terms of building relationships and providing a better understanding of the issues at play.”

Turning to improving engagement with small and medium enterprises (SMEs), he says: “The idea is to make government more open and approachable in terms of how it stands up in its public spend. There is a challenge here in moving beyond mind-sets which often placed suppliers at arm’s length, with little to no communication. Soon, we’ll be running an event which brings together bid managers with our professionals to discuss their assessment of how we are framing a procurement process. This type of engagement will be hugely beneficial as we seek to simplify our processes while maintaining our core values of achieving value for money.”

Armstrong admits that an area where Northern Ireland has struggled to gain traction in moving forward has been around the area of social value and quantifying social value in order to integrate it more widely into the procurement process.

“There is an opportunity, particularly in moving to an outcomes-based approach across government, to recognise that the social value which comes from procurement can fall across a number of areas. I think we need to focus on how we understand that procurement in one area, which brings social benefit to a different area, is a good thing.

“However, putting a number on this is always going to be difficult because anything that is subjective is open to legal challenge. So, we have to ensure that our approach to deliver social value is robust.”

CPD’s people have skills which I think are going to be in great demand going forward.

Quizzed on whether legislation on social value would be helpful to CPD’s approach, he says that while such requirement already exists in policy, the legislation will strengthen the requirements on the departments and those public authorities outside of public procurement policy.

“There is a view that legislation will assist us but we have to ensure that the legislation is effective. There is a tendency to relate low cost with value for money, however, unless you are actually getting the right products and services, balanced with environmental and social considerations, then you are not actually getting value for money.”

SMEs

Established with a particular focus on ensuring that SMEs have the widest possible access to government opportunities, the fact that over 80 per cent of CPDs contracts go to the sector, a large proportion of which are Northern Ireland-based, is admirable.

However, Armstrong is clear about the fact that CPD must continue to strive for improvement: “Ideally for us, as part of our role to support economic development, we’d like to see SMEs being successful in government contracts here, but also using that experience to secure business outside of Northern Ireland.”

Armstrong outlines that CPD has been a strong advocate of open markets during forums between the devolved administrations and Whitehall, ensuring that there are no internal barriers to procurement within any of the regional jurisdictions that limits opportunity. In this, he is clear that Northern Ireland must also ensure that there are no unintentional barriers to SMEs in its procurement procedures.

The removal of barriers, specifically reducing the focus on process and shifting that focus to a commercial approach, is one of the main requests being made to CPD through feedback by SMEs. Another request being voiced loudly is the need for greater certainty when requesting the market to bid, so that any work done by SMEs will not be rendered nugatory by a later decision to pull the tender back in for revision.

“I think there is an issue around the quality of tender documents and how that’s taken to market,” says Armstrong, believing such a piece of work can be done alongside other initiatives to “lighten the load” for this sector.

One such area, which CPD is using is around a self-declaration process for those tendering for business, meaning that only the bona fides of the winning bid would be checked, bringing greater efficiency. Another potential option is the wider rollout of a pre-qualification scheme. Currently CPD operate a dynamic shortlisting system for smaller construction works. The scheme has around 90 firms whose details are pre-qualified and stored for up to seven years, subject to continual satisfactory performance, and such a scheme could provide a template for a more extensive system.

Armstrong, who pushed for inclusion of greater efficiency and supplier engagement during the revision of the public procurement directives across the EU, recognises the strong contractual approach required to facilitate such schemes but believes utilising them could be highly beneficial in creating a more efficient and user-friendly procurement system.

Of course, while CPD are striving to improve access for the private sector, Armstrong believes that improvement must come from both sides. He believes that while the Government can be credited for its ambitions to outsource to the private sector where beneficial, there exists a failure to outsource the public sector “ethos”.

Explaining that he would like to see a greater emphasis on the importance of improving the economy and lives of citizens placed on the private sector undertaking work for the public sector.

Brexit

One area in which CPD has worked hard to ensure that Northern Ireland is not disadvantaged because of Brexit. CPD have worked closely with Whitehall to ensure that a common UK framework for procurement is maintained, in the event of a deal or no deal outcome. The likelihood is that the UK, recognising the timeframe needed to create unique procurement legislation, will continue to follow the current EU guidelines and regulations, meaning that with minor modifications to regulations to make them operational, both the UK and Northern Ireland should not see any immediate fallout from the Brexit outcome.

However, while this is true for a regulatory point of view, Armstrong continues: “A lot of work has been done to try and anticipate potential delays in supplies, alternative sourcing of supplies and analysing how this could change in the period leading to Brexit but it’s very difficult to gauge the outcome and the impact.”

He adds: “With a deal, we see procurement being relatively stable for four or five years, with any major modifications in the UK likely being quite low on the priority list. However, the UK is scheduled to leave the EU and we need to ensure that the internal UK market is maintained and that Northern Ireland firms have access to this market, as well as any markets that emerge from future trade deals. We are focused on ensuring that everyone knows that Northern Ireland needs access to these markets.”

I think we need to focus on how we understand that procurement in one area, which brings social benefit to a different area, is a good thing.

Technology

Turning to the future, Armstrong believes that Northern Ireland has equipped itself well to be ahead of the curve in the digital evolution of procurement. Well ahead of the October 2018 deadline on electronic tendering required by the EU, Northern Ireland is now on its third generation system, eTendersNI, a single portal to find tender opportunities for central government in Northern Ireland.

He maintains that despite advances up until now, the improvement of functionality is a constant body of work for CPD.

However, the Chief Executive also raises question marks over whether supplier behaviour has evolved quick enough with change, highlighting that CPD are involved in ongoing work to mitigate the risk that suppliers using technology fail to successfully submit tenders close to deadlines. 

“We fully recognise the importance of the tendering process and the submission of a bid on businesses and individuals and we’re working to unpick the challenges to meeting submission deadlines, including around supplier behaviour. Deadlines are essential in the prevention of corruption and collusion but we also have to ensure that we are doing everything possible to facilitate a supplier submitting their bid and that the best bids get through to us.”

One recognisable barrier for suppliers has been the existence of multiple systems for bid submissions across jurisdictions. This is especially complicated for SMEs who lack the resources to delegate workload. For this reason, Armstrong says that CPD will be discussing with Cabinet Office the possibility of a single system across the whole of the UK.

Recognising that this is an ambitious ask in the current political and economic climate, he concludes: “While it’s a longer-term ambition of ours, government will be procuring items forever. Four or five years is a short time in government life and these are the sort of proposals that we need to be putting on the table now if we are to form an agenda to progress the procurement system.”

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