Public sector clients will have to refer some of the low-cost bids they receive for construction work to the Cabinet Office for extra scrutiny under new procurement guidelines coming into force this month.
The government’s new ‘Construction Playbook’ advises public sector procurers to avoid awarding contracts that offer heavily discounted upfront costs. Any bid that is 10% below the average of all those put forward for a project will have to be referred to the Cabinet Office before being awarded.
It also recommends that public projects make more use of standardised components and assemblies to ensure better lifetime performance.
The playbook was developed by the Cabinet Office in partnership with the industry and sets out how the government aims to achieve project delivery that is ‘faster, better and greener’. It includes advice to make wider use of modern methods of construction and to engage with suppliers earlier in the procurement process. Social value will also make up 10% of awarding criteria from the start of 2021 and the Cabinet Office is working with the industry to develop a clear definition of whole-life value. This is set to be published later this year.
The playbook also addresses the issue of suppliers being forced to take on too much risk, and states: ‘The fundamental principle is that contracts should be profitable.’ It warns clients against issuing incomplete tender documents with poorly defined specifications, which increase the risk for bidders. It says clients should not expect suppliers to take on unlimited liabilities.