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Sustainable tender pricing policy note welcomed

Following the publication of its manifesto, the Scotland and Northern Ireland Plumbing Employers’ Federation (SNIPEF) has welcomed the latest Construction Policy Note (CPN 1/2021) from the Scottish Government which addresses one of its key planks.

Fiona Hodgson, chief executive of SNIPEF

The note, issued in March by the Construction Procurement Policy Unit, focuses on Sustainable Tender Pricing, which SNIPEF highlighted in its document as a primary area for consideration by the incoming government after the Holyrood election in May.

The comprehensive Manifesto was intended to alert legislators to the issues on which the Federation has been consistently campaigning, among which procurement on a whole life basis rather than lowest cost was of immediate relevance.

Now the policy note is reminding bidders of the importance of submitting realistic and sustainable bids, and public sector clients of ensuring that only those bids that represent the best value in terms of whole life cycle and project delivery are accepted.

The public sector spends around £4 million a year on construction, a sector made up in Scotland of 31,000 businesses which employ 170,000 people. It is a vital part of the Scottish economy.

Fiona Hodgson, chief executive of SNIPEF, said: “Our manifesto was aimed at helping to build a resilient and sustainable construction landscape in which plumbing and heating firms can develop, compete and thrive.

“It is encouraging that the new policy note on sustainable tendering recognises that the public sector must identify abnormally low tenders, investigate them and exclude them if there is no reasonable justification for the bid. However, it would be more encouraging if it outlined clear means of enforcement.

“Unsustainable pricing benefits no one and it is the responsibility of contractors and clients to end this corrosive practice and incorporate a culture in which such practices are unacceptable.”

The CPN argues that the real issue is an environment in which low bidding is the norm. It says the practice can stem from a perception among bidders that winning a tender is the start of the discussion on price. It adds that contracting authorities may misguidedly place a greater emphasis on price than is healthy.

Specialist construction industry consultant Len Bunton, said: “This is a step in the right direction, however a great deal of work needs to be carried out here to see this becoming a reality. Government keeps talking about procurement becoming value driven, and not lowest cost, so a procurement strategy needs to be delivered to ensure this happens. The practice of subcontractors being asked to give further discounts before a subcontract is placed, is wholly unacceptable and more transparency is needed.”

Professor Rudi Klein, construction expert and a major force in driving industry improvement, said: “I pay tribute to SNIPEF’s campaigning on this issue. Unsustainable pricing militates against firms being able to deliver social value such as employing apprentices, upskilling their workforces and investing in new equipment and technologies which altogether drive-up quality.”

The manifesto from SNIPEF, which represents more than 750 businesses and more than 5,000 plumbing and heating operatives in Scotland and Northern Ireland, highlighted four key areas: net zero; employment; fair work, including procurement practices; and protection of title.

6 April 2021


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