Award For 'Excellence In Construction'

Sir Peter Gershon has been awarded the CIOB President's Medal for his outstanding commitment to the industry and to excellence in construction.

Sir Peter Gershon, originator and head of the United Kingdom's Office of Government Commerce, has been awarded the CIOB President's Medal for his outstanding commitment to the industry and to excellence in construction.

In his presidential address at the recent CIOB annual dinner in London's Guildhall, Colin Busby spoke of the widening impact of Sir Peter's work on the efficiency of the public services as reflected in the review he is currently conducting for the Treasury, and specifically the OGC's five-stage Gateway Process of procurement review which has been of enormous benefit to the industry.

"The work being done by the OGC to have competent clients procuring construction can only be to the good of our industry", said Mr Busby.

"Its image suffers when government clients do not procure their projects efficiently.

Contractors and suppliers tend to think of the public sector as a single client, but in fact it is made up of hundreds of departments and agencies." Peter Gershon's job over the past four years has been to introduce coherence into the way procurement and project management is handled by this diversified machinery of central government.

The initial brief was to improve value for taxpayers' money by ?1 billion, hence the OGC's oversight by a supervisory board whose chairman is the Chief Secretary to the Treasury, Paul Boateng.

Membership of the board includes the Permanent Secretaries and Chief Executives of the big spending departments, the Cabinet Secretary Sir Andrew Turnbull and the Comptroller and Auditor-General Sir John Bourn whose National Audit Office has earned a reputation for pointing out inefficiencies and waste in expenditure of taxpayers' money.

Over a relatively short period OGC has had a major influence on the efficiency of construction and has become the instrument whereby the Treasury's policy of Excellence in Construction has been implemented.

Its Gateway Process, now trademarked as an assurance of quality and integrity and revised to reflect best practice, provides five stages of review for government procurement projects commencing with a Risk Potential Assessment by the client department which is then reviewed by the OGC.

An updated RPA has to be submitted at each subsequent stage in the process.

Encouraging smaller firms to bid for contracts.

More recently, Sir Peter Gershon and his department have been following up the recommendations of the Better Regulation Task Force which argued that public sector procurement may be skewed against the smaller firms, thereby curbing the scope for competition, raising productivity and better value for money.

Sir Peter has drawn attention to the role of small and medium-sized enterprises (SMEs) as an important source of innovative solutions and products, as well as being lower cost operators without the large overheads customarily carried by the bigger companies.

So why, he asked at the recent Working Together conference, are SMEs reluctant to bid for contracts in the public sector? "Firstly", he said, "opportunities are perceived as inaccessible.

SMEs find it difficult searching the European Union's Official Journal when they are not familiar with the specialised terminology used.

In addition, lower value procurements may not be advertised widely and there is no standard place to look for them.

"Secondly, there is a perception amongst SMEs that the bidding process is long, complex and costly.

Those new to the public sector may have difficulty in understanding requirement documents and therefore in constructing good quality proposals or tenders.

The cost of the long tendering processes", he said, "can be prohibitive for SMEs.

Suppliers with limited resources may also find timescales too tight and struggle to keep up with larger competitors." The smaller companies may, he added, find the contracts advertised are too large to bid for, and thus have no chance of becoming a prime contractor.

"The trend that follows is that more business is placed with a reduced number of large suppliers.

Competition decreases and long term value for money can suffer if the prime contractors do not take active measures to open up their own supply chains." To overcome barriers of this kind the Government is rolling out a series of measures over the next 12 to 18 months to address these issues.

One objective is to increase SME access to potential opportunities by publishing contracts valued below the EU threshold on a central web portal which will also include information on future opportunities.

The Small Business Service of the Department of Trade and Industry is to implement a pilot web portal by the Spring of 2005.

100 per cent demand for construction skills certificates.

A parallel development is the support the OGC is giving to the movement for skills certification through accredited schemes such as the Construction Skills Certification Scheme (CSCS) which assures clients that the skills of construction operatives employed on their jobs have been validated against national standards.

OGC has now told government departments and agencies that the aim should be to have 100 per cent of supply teams using staff registered with the CSCS or an equivalent, and then to make it a condition in construction contracts.

This, says the OGC, should be applied to all new build and refurbishment projects as well as maintenance and repair.

Departments have been asked, during the period that suppliers are training and registering their operatives, to assess bids from suppliers taking into account the promised proportion of their operatives registered as from the beginning of April this year.

They should also undertake regular audits throughout the life of the project to confirm suppliers' progress against the promised proportion of operatives registered.

Support for CSCS and similar schemes is wholly in line with the Achieving Excellence in Construction initiative, says the OGC.

And as President Colin Busby made clear in his comments, the CIOB is fully behind this development as is the Major Contractors Group of which he was recently Chairman.

At the CIOB dinner, Sir Michael Latham, Chairman of the Construction Industry Training Board, took the opportunity of speaking of the new mood of optimism in the industry which follows the licensing of the new Construction Skills organisation, set up under the Skills for Business initiative by a working partnership of CITB Great Britain, CITB Northern Ireland and the Construction Industry Council.

Its objectives are to reduce skills gaps and shortages, to improve productivity and business performance and to ensure equal opportunities for everyone in the workforce.

Construction Skills is benefiting from an increase in its core funding from £3 to £4 million during its initial three-year contract, plus up to £500,000 to assist in developing a sector skills agreement and a similar sum for what is described as a 'one-off' sector investment package.

As a fully licensed Sector Skills Council, CITB/Construction Skills has been given immediate access to its share of the £46 million boost for the skills network promised by the Government.

The complete network of 23 fully licensed councils is expected to be established by the middle of this year.

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