Comment: Changing the rules of procurement

23/08/2019
Dan Harvey

Our broken transport project procurement processes are stifling innovation – to thrive we urgently need change, argues Dan Harvey, executive director, UK transport at Ramboll.

As the transport industry prepares for the prospect of a fourth industrial revolution, embracing digitalisation, automation and innovative techniques for the design and construction of future infrastructure has become ever more essential.

We are benefiting from the skills of coders and software developers, who are now working alongside the more traditional roles of the engineer, transport planner and architect.

Such revolution will drive the industry towards innovation, making the potential for shortened programs, improved safety, lower carbon emissions and lower costs to become a reality.

But, is our industry procuring for this future, or procuring based on outdated models?

Outdated procurement processes exist in our industry and hold us back. Many of the major clients – including Network Rail, Transport for London and Highways England – procure their work through large frameworks, where bidding can last for years and prove costly. This may be manageable for the larger diverse players but for smaller businesses this is naturally restrictive, preventing the adoption of new innovations.

While it could be argued these long-term frameworks or partnerships allow parties to collaborate and drive efficiencies and innovation in a long-term stable environment, there is also a danger of becoming a closed shop, offering little incentive for innovation unless there are real metrics to support adoption. Therefore, many such long-term appointments are not delivering the efficiencies and forward-thinking value that could be realised.

Our procurement methods have changed little in the past 20 years – lowest price remains king, and in many cases, this drives the wrong behaviour.

Most tenders now include a quality and price component but demonstrating how you are innovating and the value this could bring, together with the challenge of overcoming a lower price competitor, is bordering on impossible.

Ultimately, this points to issues concerning how tenders are evaluated and understanding where value can be derived from.

The metrics used for determining whether a tender is selected or not have not been adjusted to support the new wave of technological innovation.

Pricing for consultants has traditionally been a lump sum or evaluated based on a daily rate per grade of staff – i.e. a senior engineer, or a technician, etc. But what about the coder and the product designer? These new roles are adding real value to clients but in many cases are not being evaluated from a commercial or quality perspective.

For a contractor, value is often evaluated on the cost of placing a cube of concrete, moving a square metre of material or constructing a bridge. But are they incentivised to place less concrete? Move less earth? Current procurement standards need to give greater weight to the value that new materials, processes and off-site methods for construction can have on improving construction and safety, and reducing maintenance.

Also we need to ensure innovation is an ongoing process throughout these projects, and therefore updated evaluation metrics must also account for future methodological developments.

The industry has recently thrown up a number of brilliant examples of innovation, not least the 20 projects that have now received up to £20m in funding by Innovate UK and Highways England to address key issues faced by the transport sector.

Yet, in terms of investment into research and development, we still lag far behind other industries. But when clients continue to champion the lowest cost tenders, what incentive is there for businesses to invest in innovation?

In an industry that appears to be on the cusp of a technological revolution, current procurement processes seem to present a significant barrier to realising the benefits of innovation and automation. To address this, we need th following steps:

  • We need to be able to demonstrate where we are innovating, the potential impact this can have and most importantly what value can be derived from this
  • Procurement must ensure that innovation and research is properly evaluated and given a substantial weighting in the tender process
  • Ongoing metrics need to drive the right behaviour for the duration of the project. A shared set of metrics across the industry can drive innovation and behaviours to the benefit of all.

Creating an environment that can help foster innovation must be a key priority for our industry. With new technologies being developed every day and other sectors shifting to new digital methods, transport can’t afford to be left behind.

Developing procurement methods that recognise true value can help us accelerate driving efficiency across our industry.

Highways jobs

Team Leader - Highways

Milton Keynes Council
£50,941 - £54,228
Milton Keynes is a place of opportunity. Milton Keynes
Recruiter: Milton Keynes Council

Highways Traffic Development Engineer

Milton Keynes Council
£34,788 - £38,813
Milton Keynes is a place of opportunity. Milton Keynes
Recruiter: Milton Keynes Council

Assistant Contracts Engineer

Milton Keynes Council
£34,788 - £38,813
We are looking for an Assistants Contracts Engineer to be a key senior member of our Contracts Team managing... Milton Keynes, Buckinghamshire
Recruiter: Milton Keynes Council

Team Leader - Streetworks

Milton Keynes Council
£39,782 - £43,662
We are looking for a Team Leader to lead our Streetworks Team. Milton Keynes, Buckinghamshire
Recruiter: Milton Keynes Council

Traffic Project Officer

City of York Council
£26,875 to £29,783 per annum
City of York Council have a great opportunity for a Projects Officer to join our busy Traffic Team. York, North Yorkshire
Recruiter: City of York Council

Traffic Management Leader

City of York Council
£35,500 to £40,710 per annum
City of York Council have an exciting opportunity for an experienced transport professional to lead our Traffic Team. York, North Yorkshire
Recruiter: City of York Council

Senior Technician (Structures)

Milton Keynes Council
£29,636 - £33,779
With several future projects coming up this is an exciting time for an experienced Senior Technician to join our team.  Milton Keynes, Buckinghamshire
Recruiter: Milton Keynes Council

Senior Engineer - Development Management

Milton Keynes Council
£44,632 - £49,298
We are looking for a Senior Engineer to work within our Development Management Team. Milton Keynes, Buckinghamshire
Recruiter: Milton Keynes Council

Principal Transport Officer (Policy)

St. Helens Metropolitan Borough Council
£38,813 To £40,760 per annum
This is an exciting opportunity for an energetic and motivated individual to drive forward transport policy to... St Helens, Merseyside
Recruiter: St. Helens Metropolitan Borough Council

Road Safety Officer (Education and engagement)

Milton Keynes Council
£29,636 - £33,799
We are looking a Road Safety Officer to deliver our education and engagement programme across Milton Keynes. Milton Keynes, Buckinghamshire
Recruiter: Milton Keynes Council

Road Safety Engineer

Milton Keynes Council
£34,788 - £38,813
We are looking for an experience Road Safety professional to join our team to process and analyse collision and casualty data and to... Milton Keynes, Buckinghamshire
Recruiter: Milton Keynes Council

Development Management Engineer

Warwickshire County Council
£37,849 - £39,782 per annum
The successful applicant for this post will be capable of taking the lead on work within... Warwick, Warwickshire
Recruiter: Warwickshire County Council

Project Officers

Buckinghamshire Council
£29121 - £38881 per annum
OverviewCareer graded posts 5-7£29,121 - £38,881 per annumThis is your chance to make a lasting impact on our county. From developing the connected tr England, Buckinghamshire, Aylesbury
Recruiter: Buckinghamshire Council

Permit Coordinator

Milton Keynes Council
£29,636 - £33,799
We are looking for a Permit Coordinator to work within our Streetworks Team. Milton Keynes, Buckinghamshire
Recruiter: Milton Keynes Council

Highways Liaison Officer

Milton Keynes Council
£29,636 - £33,799
We are looking for a Highways Liaison Officer to join our Communications and Liaison Team. Milton Keynes, Buckinghamshire
Recruiter: Milton Keynes Council

Clerk of Works

Milton Keynes Council
£29,636 - £33,779
We are looking for a Clerk of Works to join our expanding team, supporting the Senior Engineers to... Milton Keynes, Buckinghamshire
Recruiter: Milton Keynes Council

CCTV Control Room Supervisor

Sandwell Metropolitan Borough Council
£24, 313 - £28, 785 pro rata
We are looking to recruit a supervisor to become part of the management team for our highly successful CCTV Control Room. Sandwell, West Midlands
Recruiter: Sandwell Metropolitan Borough Council

Chair of the Board of Directors - Norwich City Services

Norwich City Council
£10,000 per annum
Join Norwich City Services Ltd and transform the way we look after our city and our people. Norwich, Norfolk
Recruiter: Norwich City Council

Team Leader

Buckinghamshire Council
Negotiable
OverviewThis is your chance to make a lasting impact on our county. From developing the connected transport networks of the future and driving sustain England, Buckinghamshire, Aylesbury
Recruiter: Buckinghamshire Council

Commercial Vehicle Technician

Chelmsford City Council
£30,000 per annum
We are seeking a fully trained HGV technician to work as part of the team who maintain the Council's fleet to the highest standards.  Chelmsford, Essex
Recruiter: Chelmsford City Council

Highways on Fridays

Register now!

Latest Issue

latest magazine issue

 

ADEPT: Past and present

Highways England: Present and future

Mott MacDonald: Urban realm of the future

View the latest issue

Latest Video