The new Procurement Act, which will now come into effect early next year, introduces new regulatory standards for public sector higher education institutions, focusing on areas such as transparency, competitiveness, accountability and efficiency.
It has never been more important for higher education institutions to ensure the physical infrastructure of educational buildings is up to standard and equipped to drive quality education and research. Universities are facing unprecedented challenges including fluctuating enrolment numbers, leading to a need for sustainable and resilient infrastructure to attract students.
The new Procurement Act emphasises the importance of openness, requiring greater transparency when it comes to procurement in construction. This means decisions should be clearly justified and accessible to key stakeholders including students, the public and government bodies.
Single stage or two stage?
When considering building procurement, higher education institutions must consider the method. In single stage procurement, a client issues a tender for a whole project and contractors compete for the project based on price.
Two-stage procurement divides the project into pre-construction and construction phases. In the pre-construction phase, bidders compete via a mini competition for the contract based on their capacity, capability and experience. A client can review the approaches of bidding contractors and compare their rates for profit, fees, or overheads.
In the second stage, the contractor and their key supply chain members including designers, subcontractors, and manufacturers engage with the project as early as possible. They will fully scope the project and assess risks early on. This reduces any chance of unforeseen issues occurring later in the project that impact costs and deadlines.
A single stage procurement model with fixed outcomes alongside squeezed budgets runs the risk of putting the original design intent at risk and can force use of poorer-quality materials, risking quality and in turn the reputation of the university to stakeholders and students alike.
At a time of tightened public budgets and rising costs, collaborating with industry through a model such as two-stage, is key to facilitate innovation, while unlocking public value.
The importance of two stage for considering non-price factors
The new Procurement Act is set to refocus the criteria for awarding contracts from the most economically advantageous tender (MEAT) to the most advantageous tender (MAT). This will enable contracting authorities to place more value on non-price factors, such as social value, environmental impact and innovation.
This is becoming increasingly important for higher education institutions, with students expecting that their campuses, universities and schools are more sustainable and should showcase this through the learning and built environment.
With a two-stage process, since the mini-competition involves pre-qualified suppliers who have already demonstrated their skills and experience, Higher Education Institutions can be assured that bidders will be able to meet high standards in areas such as functionality, compliance with educational requirements, leading to better overall outcomes.
The competitive nature of the mini-competition phase also pushes suppliers to differentiate themselves through offering innovative designs, technologies or construction methods that add value in areas such as waste reduction, renewable energy, or operational standards.
This approach saw Bristol Humanities Hub achieve BREEAM Excellent through a decision to install natural ventilation, significantly reducing operational carbon usage.
Early engagement is key
The mini-competition stage of two-stage procurement also ensures all parties can address potential issues early. This means higher education institutions have an opportunity to highlight and clarify any uncertainties in terms of project scope, timelines or technical requirements.
Two-stage open book also gives higher-education the opportunity to tap directly into the supply chain when making early-stage choices in areas such as materials and methodologies, identifying and mitigating risks in both the design and cost plan. This helps avoid costly reworks later down the line, like unaddressed accessibility requirements for students, or incorrect sizing of HVAC systems including heating and ventilation for spaces such as laboratories or research centres which could result in rework.
Early engagement is also key for bringing in the supply chain early, making early-stage choices in construction methodology and materials, and ironing out timelines to ensure the project can be delivered in a way that brings the most value to a higher education institution. With the Public Procurement Act encouraging public sector organisations to have a deep understanding of the market before issuing tenders, engaging the supply chain early through soft market testing via two-stage will ensure that higher education institutions have a thorough knowledge of supplier capabilities.
Oxford Brooke’s new teaching and engineering facility on the Headington Hill campus showcased the importance of clients and contractors collaborating via two-stage open book to ensure the appropriate materials were available earlier on in the process. In doing so, the contractor Willmott Dixon, was able to phase the works to complete certain blocks earlier. This allowed international students to take residence in summer, allowing the university to have additional income to continue to provide a higher quality learning environment.
Sustainable futures
The two-stage process also allows contractors to work with higher education institutions to embed sustainability, a key focus amid net zero targets.
For example, The University of Hertfordshire’s Spectra Building saw the contractor Morgan Sindall working with its supply chain to source sustainable materials. Timber was used for staircases as opposed to steel after early-stage conversations revealed the importance of these elements for meeting sustainability requirements.
It also emerged that operational carbon efficiency was at the top of the client’s agenda, so Morgan Sindall worked closely with the client team on the electrical side to ensure longevity in terms of maintenance, installing motion sensors that switch off when not in use.
To conclude, early engagement through a two-stage procurement process encourages market understanding and innovation while mitigating risks, ensuring value for money.
This is increasingly important at a time when technological advancements and innovation are calling for specific requirements for space, technological integration and infrastructure, which can be challenging to address without early, specialist input from contractors and suppliers.