procurement + sustainable economic growth

courtesy of

Willie Miller’s timely Small Practices and Procurement blog on the Urban Realm website draws attention to the increasingly difficult issue of the impact of procurement rules. To quote Willie:

“Framework Agreements and other aspects of procurement regulations make it increasingly difficult for small practices to get public sector work. At the other end of the scale, a few large practices soak up more and more small jobs enabling them to grind out more and more very ordinary work.

…maybe that is exactly what many clients want … but it certainly isn’t what is needed to spark new approaches to the future of cities, towns and rural areas.”

It’s widely accepted that small organisations are a greater source of innovation than large organisations. Of course, large organisations are a vital part of the economy – try building big infrastructure or large-scale mass production without it. But they are not the solution for every project and for every client.

This is particularly true in the knowledge economy which the government has been trying so hard to build in recent years. Where a client is looking for specialist expertise, ideas and skill – for example a community engagement strategy, rather than building cars or computers as efficiently as possible – procurement methods geared towards big business models are simply not appropriate. Evaluating how well a big company will fulfil a multi-mullion pound cleaning contract needs to assess different criteria from a £7,000 multi-disciplinary contract for community-based improvements to a small local park – an advert which I recently saw advertised nationally, where 70% of the assessment marks will be based on price and only 30% on quality. This might sound like a small consultant griping about how difficult it is to get work now. That’s not the case: I am lucky enough to have been busy throughout the recession, and I sincerely hope that will continue.

My position is that I genuinely believe that the current focus on price and scale in public sector procurement is at odds with the Scottish Government’s stated purpose of increasing sustainable economic growth, and its strategic objectives of making Scotland wealthier and fairer, smarter and greener. Why? Because levelling the playing field to give small businesses an equal opportunity will help grow small businesses, diversify the economy and improve quality.

New York City | a more sustainable approach?

This isn’t particularly radical thinking. In fact, New York City has been doing it for years already – as Matt Bridgestock points out in his article on John Gilberts Associates’ website about Mayor Bloomberg’s Design and Construction Excellence Program launched in 2004. Here is the City’s description of their fresh approach to procuring City buildings:

“The initiative will establish new ways of contracting with design consultants that, by emphasizing quality in the selection process, will secure the most creative designers for City funded projects and ensure excellence in the design and construction process. Most importantly, the initiative will consider the long-term operating and maintenance savings that can be gained from emphasizing merit in design.”

As Matt explains, NYC selects firms based on qualifications, vision and experience. Fair and reasonable fees are stated upfront in the tender documents, which has the effect of focussing competition on quality rather than cost. The result has been to increase competition for City public projects by attracting a wider pool of entrants and securing higher levels of service. Not only has the quality NYC’s new buildings has increased as a result, but there is a direct link with supporting smaller local businesses as an engine for growth of the local economy.

The Program makes sure that the right projects go to the right-sized firms: for example, projects with a build cost of under $10million are only awarded to architectural practices with up to 10 employees – which helps to drive up quality because there will be more Director-level involvement than there would be in a larger practice.

back to Scotland | can we do it here?

The link with the Scottish Government’s purpose of sustainable economic growth is inescapable. Not only do we get better quality; we also support home-grown businesses to create jobs and wealth. The model is sustainable in so many ways – economically, environmentally and socially.

For the good of Scotland, we need to roll this approach out across the country – central and local government alike. I understand that the issue has recently been raised politically, with Scottish Government Ministers Jim Mather MSP and Mike Russell MSP. This pressure needs to continue, as part of a wider strategy to engage those working in public sector procurement.

NYC’s experience shows that something can be done, provided we have the will.

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