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Private Sector Client’s Need to Choose Value, Not Cheapness

I regularly review tenders and continue to see a varying price/quality ratio. Just recently I was involved in a substantial tender for an extension to a well-respected fee-paying school in Belfast.

A firm of building surveying and project management consultants were acting as Managing Agent on behalf of their client. I was disappointed to see that the criteria for tender evaluation was simply the lowest price. I queried this with them and asked why they decided to allocate zero points to quality. 

Unsurprisingly I got a pause followed by a wobbly answer something along the lines that it was due to time pressure. Ultimately it costs less time for the Managing Agent to evaluate a tender which is simply down to price, so unless there is an incentive to do so, I cannot see why the default position will change from lowest price.

Unfortunately, that is unsustainable for progressive contractors that need to make a fair and reasonable profit to invest in their staff and apprenticeships for future development. Hopefully things will soon change in the private sector, but I doubt it.

Procurement Bill:

The Procurement Bill has gained Royal Assent to become the Procurement Act. This means that there is now less than a year to the implementation of far-reaching reforms to how public procurement in the UK works.

For suppliers to the public sector, it’s crucial to understand what these changes are and how they will be re-drawing the public procurement landscape. 

Social Value:

As a result of Procurement Policy Note 01/21, social value is becoming increasingly more important in public sector NI tenders. At increasingly more events this is being presented as a priority area that contractors need to be aware of.

At a recent event hosted by Quigg Golden and the CIOB, it was noted that a 10% minimum weighting for social value is applied for above-threshold public procurements. This is expected to rise to 20%. The message is simple – to win public sector tenders, contractors need to have a strategy to address the following themes: 

  1. Increasing secure employment and skills.
  2. Building ethical and resilient supply-chains.
  3. Delivering zero-carbon.
  4. Promoting wellbeing.

Society Needs Property Developers:

What do doctors, teachers, lawyers, accountants, and property developers all have in common? The answer is they, along with all the other people in society, are all needed to create a modern sustainable environment for people to work, rest, and play in.

Most private sector companies started as the result of someone seeing a business opportunity, whether that was the principal of a law firm or the owner of a High Street shop; one day they stood up and took a risk on a business venture. Such entrepreneurial people should be praised for being enterprising and creating employment.

Belfast is no different to any other city in that it is a metropolitan area with a built environment that needs to continually evolve. When buildings become no longer suitable for purpose, responsible property development is required.

There are many new office buildings being built and planned for Belfast. Many of these schemes became a reality not because of public sector bureaucracy, but because of individuals who had the foresight and vision to identify an opportunity.

Unlike for example the law and accountancy professions where specific courses of study, followed by further qualifications must be attained, property development is not a recognised profession.

Property developers identify opportunities and put in place their own teams which include designers, contractors, and financiers – all usually with little or no public sector support and a calculated degree of risk.

The message here is that responsible property development should be welcomed and recognised as an important part of society. Without visionary property developers, the new buildings and offices which are required for the jobs that have been created because of foreign direct investment would not become a reality. I see four new hotels planned for Belfast have been given the green light for development. Let’s support responsible property development in 2024.

Gerard Graham FCIOB, is Principal of Gerard Graham Consulting.

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