RIBA report reveals shocking cost of bidding on Official Journal tenders
Public procurement processes are costing UK architectural practices £40 million a year, according to a ground-breaking survey by the RIBA
The bidding costs for work advertised in the Official Journal of the European Union swallow up 30 per cent of all earnings made by UK practices made through this tender process, while the success rate for architects bidding for OJEU jobs is just 15 per cent.
The shocking statistics were revealed as the RIBA announced a major new report which presses the government to reform its ‘frustrating and wasteful’ public procurement system. The report urges the government to shorten PQQs, reduce the number of organisations ‘caught up in the bureaucracy’ of public procurement, provide better project design and delivery guidance for public clients, discourage contracts being awarded to the lowest bidder and increase SME access to create a more competitive market.
According to the report, the UK procures more work by value through the OJEU than any other EU country but its procurement processes are the third slowest in Europe and cost 20 per cent more than in other EU countries.
RIBA president Angela Brady said the report would ‘help government ensure that construction procurement reforms can produce a more efficient, more sustainable and more equitable system’.
She added: ‘Turnover requirements mean 85 per cent of UK practices are considered too small to tender. This does not encourage a competitive market.’
Foster Lomas director Greg Lomas said the RIBA research made it hard to see how OJEU bids could be financially justifiable. ‘To think that the profession has spent £40m each year trying to win OJEU work is, frankly, staggering. Clients must realise that that money would be better spent on design and delivery.’
Broadway Malyan director Matt Brook
The current public sector procurement process is undoubtedly a key topic that RIBA should be addressing, it is a hugely wasteful process both for the tax payer and the bidding practices. Appropriateness is a key issue public sector procurement, teams often also roll over bid documents from project to project irrelevant of size. As a result even on small projects they end up paying for an unnecessarily long list of consultants, rather than focusing their budgets on the core services they really need and will add the most value. The true value of service that a bidder is going to provide is also often overlooked; public sector clients can end up paying more fees for additional services in the long run by selecting the lowest bidder.
Scott Brownrigg spokesperson
Scott Brownrigg has been involved in the development of the report from the outset in conjunction with several other parties and the report reflects the views of all those architectural practices who experience the ups and downs of the often very complex and costly procurement process. The current process not only prohibits smaller practices from winning work through this means, but also has a detrimental effect on the delivery of quality, sustainable and future proofed design. The report opens up dialogue in this complex area.
The drive for lower costs, low carbon and use of BIM also makes a focus on the procurement process essential. The recently published BIM Overlay to the plan of work that rapidly followed the Green Overlay, will help to sharpen up the procurement process. Scott Brownrigg is engaged with all of these developments as we see them as essential to the delivery of both quality and value for clients. In a competitive world, architects have to identify their relevance and ability to deliver both. A long hard look at procurement, which this report initiates can only be a good thing.
Robin Partington of Robin Partington Architects
I worry that OJEU is unnecessarily expensive and complex for many to join in, and often seems to involve a selection process based on the winner being the last man standing after the majority are whittled away through unfortunate omission or error in the complexity of the forms, rather than a positive process based on merit and appropriateness for the task at hand.
Robert Sakula of Ash Sakula Architects
Isn’t it good that at last there seems to be a head of steam building up where architects can say something at last about the nasty little process we have to spend so much time on known as procurement. It’s rather like the politicos suddenly realizing they can be rude about Murdoch and get away with it.
I despise almost everything about the whole PQQ exercise, but for me there are two particular betes noires. Firstly, it is deeply irritating when you are asked for financial or insurance information but not told how the information you have given will be marked. After all, what do they lose in telling you that if your turnover is less than such and such you do not stand a chance? But they don’t and so, on the chance that you might be all right, you may waste a week composing poetry that no one will ever read… And there is only one thing worse than that; which is that when and if your poetry does get read, it is only by people who are so ill prepared for their role that they have no idea whatsoever whether what they are looking at is dross or gold. And so they count only what can be counted which, as Einstein knew, is less than half the story.
The solution: design competitions judged by design literate juries, recommending to clients their findings. At that point let them by all means do a few business checks on the team they are considering appointing. But those checks have become the whole story. Someone should research the history of how procurement came to be the way it is. What on earth was the problem they were trying to solve?