Help for the small guy

Adoption of the EU Procurement Directive should start to level the playing field for small firms.

Few practices who have bid for public work would disagree that the existing methods of procuring consultancy services are in desperate need of reform. The use of arbitrarily high turnover requirements, nonsensical levels of professional indemnity insurance and an obsession with box-ticking both discriminate against smaller practices who are perfectly capable of undertaking the work and place a huge burden on larger practices bidding for projects of a larger scale.

Many in our industry mistakenly blame this overly bureaucratic approach to procurement on the European Parliament. While the OJEU process obliges procuring authorities to put in place robust and transparent methods for buying services, it is in fact the UK’s implementation of European regulations that is largely responsible.

That the EU directive encourages the acceleration of procedures (and the UK’s are some of the most drawn-out in Europe) can only be a cause for celebration


Winds of change

The RIBA’s 2012 report Building Ladders of Opportunity set out recommendations for how the government might make the way public bodies procure professional services more efficient, cost-effective and fairer.

As we progress into 2014 and the economic recovery starts to gain pace, there is at last a sign that things might be changing for the better. On 15 January, the EU adopted the latest iteration of its Procurement Directive. This introduced many positive changes for SMEs (a broad classification which actually includes 97% of UK practices) through the reduction of barriers to entry. Having lobbied hard for fundamental changes to the law, the UK government has committed to adopting it before the summer. By aligning UK public procurement regulations more closely with the rest of Europe, a rebalancing of the procurement landscape should see work won by those best placed to deliver it.

The government has indicated that it ­intends to make minimal changes to the ­directive, so the previous tendency to gold plate the regulation will no longer be allowed; procuring bodies will not be able to apply their own arbitrary qualification requirements, which will now have to be more consistently applied. In a further bid for transparency and convenience, all procurement exercises will need to be carried out electronically within the next four-and-a-half years, improving visibility and access.

Significantly reducing the burden of pre-qualification questionnaires (PQQs), the new directive allows for self-certification, meaning organisations can bid for work having declared their capability to do so. Quite how this will work in practice remains to be seen, but it has the potential to streamline the more bureaucratic aspects of the bidding process. That the directive also encourages the acceleration of procedures (and the UK’s are some of the most drawn-out in Europe) can only be a cause for celebration.


Whole life performance

One of the pivotal recommendations of Building Ladders of Opportunity was that procurement processes should take into account life-cycle performance; an important victory for those who believe that the success of any tendering process extends beyond the cost and quality of the finished product. Likewise, embedding sustainability as a ­fundamental aspiration in all stages of the procurement process is a positive move.

An important aspect of the new directive is that the EU has given national governments flexibility to determine their preference on aggregation: the grouping of multiple lots into larger contracts. While many procuring bodies argue that this creates efficiencies of scale, there is no doubt that it seriously limits access to public sector work for smaller firms. The UK already has one of the most aggregated markets in Europe and any steps taken to spread the work more widely across all sizes of practice must be welcomed. However, it is not yet clear whether the UK will make it optional or mandatory.

Changes to the financial assessments used by contracting authorities in the selection process will help lower barriers for smaller firms. First, the use of turnover as a measure of suitability becomes an optional, ­rather than mandatory, requirement. Secondly, where it is used, turnover thresholds can only be ­applied to double the contract value.

While there is a great deal to celebrate, only time will tell how the public procurement landscape will change in response. Transposition of the directive into UK law is likely to take until the summer. Quite how it will filter down to the local level, and­ whether it will bring about a consequential change in below-OJEU tenders, can only be speculated upon, but – for now at least – it looks like we’re moving in the right direction. 

Russell Curtis is a member of the Construction Leadership Group and director of RCKa