Out-Law News 2 min. read

Consistent, simplified procurement standards needed to lower costs and innovate, industry group says

A focus on inputs, rather than outcomes, and the "sheer volume" of different technical standards across the infrastructure sector has led to inefficiencies in the procurement of projects, an industry group has told the Government.

Following a Government-commissioned inquiry, the report (44-page / 1.1MB PDF) by the Industry Standards Group said that removing unnecessary technical standards and simplifying procurement specifications would enable the UK to innovate and lower costs.

Terry Hill of engineering firm Arup, who chaired the inquiry, said that evidence collected by the group showed that specifications could be simplified with "no loss of quality, safety or operational effectiveness".

"We found many examples of confusing and overly prescriptive use of international, European, national, organisation and project layers of requirements," he said. "We also found examples of best practice that demonstrates how smarter use of standards and specifications is yielding benefits. We believe that through following the recommendations of this report, infrastructure clients can generate significant gains in delivery efficiency. This in turn will lead to cost reductions."

A standard is an agreed, repeatable way of doing business. Standards will usually be set out in a published document that contains a technical specification or other precise criteria that will enable them to be used consistently. A specification is a document used by the client or designer of a specific project to define the project's requirements to a third party, usually the contractor.

The report said that ongoing "changes in behaviour" across the transport sector were already beginning to have an impact, but that more work needed to be done. Much of the inefficiencies identified by the group were not caused by compliance with British, European and other international regulatory regimes but rather how standards were interpreted by different clients, it said. As an example it cited Midland Quarry Products in Leicestershire, which produces 270 different asphalt mixes to meet its local authority clients' differing interpretations of high level standards.

It noted that the Rail Safety and Standards Board (RSSB) has reduced its Railway Group Standards by 46%. Network rail has reduced its standards portfolio by 80%, while London Underground has reduced its number of pages of in-house standards by 95%.

The report recommends that specifications and standards should be structured in such a way as to support clearly defined performance and output requirements. Any mandatory requirements should be clearly distinguished from additional "advisory or informative" material, while clients should implement a process to enable them to measure and justify specific requirements within project procurement specifications. The Government should, it said, establish a joint working group with industry and clients to produce guidance on client requirements as part of its procurement Best Practice Toolkit.

Clients should, the report added, "seize the opportunity to empower their supply chains" as early as possible on a project, particularly at the procurement phase. They should also be able to demonstrate clear value for money before introducing new standards, or requirements within standards.

Lord Sassoon, Commercial Secretary to the Treasury, said that the Government would work with the group to implement the actions outlined in its report.

"I am pleased to see that the report recommends streamlining specifications in the transport sector and that it builds on the progress already being made," he said. "That is why I am keen to see the approach extended to other areas of economic infrastructure so that a wider range of infrastructure clients and projects benefit from reduced bureaucracy and lower whole life costs."

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