REUTERS | Mick Tsikas

Are procurement and construction processes fit for purpose?

So many questions have been raised by the horrifying and heart-breaking events at Grenfell Tower.  In addition to the questions that have been raised in the public sphere it seems to me that there may be core questions that should be obvious to those of us that have been involved in public procurement but may not yet be obvious to the press and other commentators.  As someone who has been involved in construction law and public procurement for over 30 years these events raise some serious questions about the systems that we have come to regard as normal.

As it happens I’ve been putting in place plans for a workshop at King’s College in November that considers how public procurement can lead to better health and social outcomes and I hope that this will be a useful framework to look at some of the issues that are raised. I would welcome any input on how we should frame discussion around these issues. Let me suggest a first few initial questions that are specifically directed to Grenfell Tower as it seems to me that we can usefully start with these and see how we can extrapolate to other circumstances.

In setting out these questions I assume that we have to focus on two procurements: the contractual arrangements for management of the housing and the specific contract for delivery of the refurbishment of Grenfell Tower. There is plainly now an issue as to whether the type of cladding was even permitted so the whole question as to how that cladding came to be used is very much alive. Life being what it is, though, we have to expect that this inquiry will throw up more than one shortcoming that led to disaster.

I should also emphasise that I know nothing about what happened at Grenfell Tower either before, during or after the fire beyond what I have learned from the press and speaking to those who have been in the vicinity of the Tower in the last few days. So here goes.

  1. What were the contractual arrangements under which the management of Grenfell Tower was run and how was the management organisation set up or appointed?
  2. What were the ongoing contractual and financial incentives under this contract?  For instance was payment tied to Key Performance Indicators and if so, what were they?  How was engagement with the tenants and the community worked into the contract?  Most crucially what were the contractual incentives for improved fire safety?
  3. Perhaps on this relationship we also need to consider whether the way in which the management organisation was set up or appointed placed emphasis on softer social goals or pure financial performance as opposed to basic goals of tenant safety.
  4. Has public procurement been so fixed on pursuing the agenda of social value and environmental goals that we have failed to give enough weight to basic performance factors such as safety?  Has social value and the like simply become too fashionable for the good of those it was to benefit?
  5. If fire safety is treated simply as a question for the specification rather than in the criteria for awarding a contract, are choices in the relevant building contract driven by questions such as whole life costing and the like rather than improvements beyond the specified level of safety? Does that mean that the choice between one system or product and another is made more on the basis of softer criteria at the expense of more basic factors?
  6. And of course, if (and it’s a big if) the root of this tragedy is in the use of prohibited products, defects or poor workmanship, how is it that our procurement culture has still not weeded this out?  Are we still incentivising short cuts or unduly prioritising procurement law compliance?
Monckton Chambers Michael Bowsher QC

2 thoughts on “Are procurement and construction processes fit for purpose?

  1. Dear Mr Bowsher,

    I wondered whether as part of your questions/enquiry it might be appropriate to ask given the various levels of regulatory overview, contractor and consultant involvement the relevant product/construction method could be allowed without warning or highlighting of the dangers? Who had the duty to warn and if warnings/concerns were raised why were they ignored?

    Martin Collingwood

  2. The key is good specification of what is to be delivered, properly related to termination and performance management risks and the pricing structure to incentivise delivery. Good specification is hard and is rarer than it should be and under-valued. Decades of relentless demand for cost savings, over-ambition about what can be procured and on what scale, and the EU procurement framework which focusses on compliance at the expense of satisfying the requirement, have also taken their toll. Senior people and politicians unskilled in procurement are over-optimistic and unrealistic about what can be achieved and do not understand how much effort is needed to place a contract successfully and manage it; and that over-ambitious projects have a much higher risk of failure. Simply engaging a professional supplier does not solve the problem, particularly if going out to the market is done without first solving the problems that need to be solved in order to procure a successful solution. There will be more chickens coming home to roost in coming years. PFI was not a novel approach to procurement but a risky one: it was designed to fund public infrastructure without appearing to do so by getting the investment off the public balance sheet and spreading the cost into the future. These are personal views based on advising on procurement since 1986

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