Building momentum
The recent CBI briefing on delivering Building Schools for the Future has highlighted
a number of key issues which need to be addressed to ensure the programme increases
its momentum and provides children and teachers with the best environments for learning.
The report gave a cautious endorsement of the new direction of travel for BSF, and
highlighted some of the problem areas that need resolving.
The way in which the procurement is carried out is key to the success of the project,
and in particular how the procurement processes are planned, managed and implemented
on the ground will have a very important impact on the success of the scheme. The
role of Authority’s legal advisers is critical in this regard, helping the Authority
to ensure that the procurement process maximises the project’s outcomes.
Procurement of some of the earlier schemes has been dogged by delays and very high
bidding costs causing a great deal of consternation for those bidders who just miss
out on achieving preferred bidder status. The legal teams of both the Authority
and the bidding consortia need to work together to avoid some of the worst examples
of disputes between lawyers wasting time and money, and leading to tension in the
relationships between the clients.
The move to standardisation is a great help, but it is clear that having a set of
standard documents is not enough in itself to avoid these difficulties. We believe
that more can be done to establish protocols with the adviser teams to ensure that
the right kind of interactions and relationships are established to engender a spirit
of co-operation and positive working amongst the teams. It is clear that there are
going to have to be some changes in patterns of behaviour in the bidding process,
and fresh approaches made to resolving issues between the parties. This will require
the co-operation of everyone involved in the procurement, and recognition that difficult and negative approaches harm both the scheme and the reputation of the industry.
The recent PWC procurement review has identified a number of important changes which
are currently
being implemented. We have been consulted on the new draft procurement
documentation and believe that there are discernable improvements in the documents
which will have a positive impact on the procurement.
We believe that the competitive dialogue process must be used in such a way as to
ensure that those bidders who have the requisite skills and experience in partnering
are selected at shortlist stage. The approach to partnering needs to be demonstrated
in relation to the project in question, not just by showing how they have partnered
in the past. The approach to partnering needs to permeate into the procurement process,
so the Authority and the bidding teams are working harmoniously during the dialogue
phase to find workable solutions. The ability of the teams to do this well will
be a critical success factor in the procurement. There has been too much focus on
the physical schools estate in the past, and not enough attention paid to the importance
of developing constructive relationships. Furthermore, the procurement will have
to be designed so that the spirit of partnering can be embedded throughout the process,
and carried into the post-preferred bidder stage.
There is a steep learning curve for many authorities who need to develop mature
relationships with their LEP partner and the supply chain; too often the Authority’s
approach to procurement and contact management is based on very traditional lines
and there can be a noticeable element of distrust between the parties, due to
an out-dated “them and us” attitude.
There needs to be strong leadership from the Authority to achieve financial close
within the proposed new timetable of 74 weeks. The early preparatory work by the
Authority is absolutely essential to ensure that the procurement process is not
delayed. The CBI report highlighted the problems of uncertainty and delay experienced
by Authorities who are unsure whether FM is to be included within their non-PFI
projects.
PfS have set out in detail the lessons which have been learned from the first five
years of the BSF programme. Authorities should be required to demonstrate how those
lessons have been learnt, and what steps will be implemented to avoid the mistakes
of the past before the procurement process can begin.
Based on experience of BSF schemes so far, we would suggest that the following additional
steps would assist in delivering a more efficient, effective and value for money
process going forward:
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A better understanding of the Competitive Dialogue Procedure, and how it can be
used to greater effect. The evidence suggests that both authority and bidding teams
have used the process in much the same way as the negotiated procedure, and old
habits die hard. |
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Do not close the dialogue phases until all relevant matters have been resolved.
Too often there is a temptation to defer problems and save them for later. Also
if a Preferred Bidder letter is to be used, then it needs to make sure that all
outstanding issues are set out in full, with a clear plan for resolution. All relevant
parties need to genuinely sign up to the commitments within it, and recognise that
it is not in anyone’s interests for issues to become protracted. |
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The Authority should have a very clear plan as to what surveys it will carry out,
and what warranties will be available to the bidder. The time consuming wrangling
over the terms of appointment can be easily avoided if handled carefully during
the procurement process. Likewise, the early commitment from the bidder on the form
of warranties is equally essential. |
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All too often unresolved property issues can add significant delays to the procurement
process. Diligent preparatory work by the Authority can avoid this. The same issues
can apply to the planning process. Deferring potential planning issues to later
in the process will only add further delay to the procurement timetable: planning
processes are becoming more complex, and the location of schools (especially in
dense urban environments) can raise all manner of issues for resolution. Dealing
with these issues in advance, as much as possible, can assist. |
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Having well managed document management systems in place can improve communication
amongst all parties and avoid delays and confusion. As personal electronic communications
becomes ever more sophisticated and complex, a fully functioning and well used extranet
can help to manage the process. |
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Understanding of legal documents. The suite of legal documents required for the
financial close of a BSF transaction can be quite bewildering to many involved in
the process. The greater the understanding of the documents, and the commercial
issues involved in them, the quicker the resolution will be.
In this regard, we
have recently published a new Legal Guide to BSF with the specific aim of helping
those involved in the BSF process gain a better understanding of the legal documentation
and the relationships between the many legal players. Training BSF project teams
on the legal documents will be a key part of the process to ensure that the documents
are developed and used in the most appropriate way. |
As the pace of the BSF programme picks up, and more and more schemes are in procurement,
it is to be hoped that the lessons from the early waves have been learnt and that
practical solutions are found to many of the difficulties which have affected the
programme over the first few years. The signs are positive, and once projects have
closed on the new streamlined process then the confidence of the bidding community will be restored.
This article was first published in the September 2008 edition of The PPP Journal.
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For More Information Contact:
Graham Burns
TPP Law Limited
53 Great Suffolk Street
London SE1 ODB
t 020 7620 0888
f 020 7620 0778
e info@tpplaw.co.uk
Email:
Graham
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