What’s the Right Procurement Balance Between Risk and Innovation?

Are procurement processes loaded against the innovators? If you’re a small innovative business, procurement rules for public sector contracts might seem like too large a hill to climb.

With a small team it’s hard to justify the overhead of managing Request for Proposal (RFPs) and tenders that run to many, many pages. There’s also a cultural issue that can make it hard for a small entrepreneurial team to adapt to the formality and rigid rules of procurement.

But the sector needs innovative partners to tackle major challenges like net zero and to transform productivity levels.

Procurement rules are there for a reason. They help ensure there’s a fair process, that suppliers are appropriately qualified and to manage risks. Procurement rules also support broader objectives such as EDI, sustainability and social value. Nobody would want to lose sight of these.

The Procurement Balance

Few would argue that the balance between innovation and a rigorous process is in the optimal place. Current public procurement favours large contractors with specialist procurement teams who have been through the process many times. Familiar solutions are perceived as the lowest risk and the easiest to defend.

As a result, ‘innovative’ isn’t among the first words that come to mind when people think of the construction industry. This is despite all of the exciting developments taking place with modern methods of construction, particularly in the education sector where manufactured solutions such as Osborne’s InForm product are being adopted.

Welcoming New Ideas

Somehow, we need to find a mechanism that makes publicly funded construction more open to new ideas and less risk averse. New procurement rules promised by the Government may help but there isn’t a definite timetable for their introduction.

Through our major customer frameworks such as retrofit programmes we encourage and have a major role to play to provide opportunities for innovators to pilot and scale up their technologies and methods. This is, perhaps, a model that should be replicated.

Whatever processes we end up with, value for public money will have to be safeguarded and risks will have to be managed. But we should remember that failure to innovate is the biggest risk of all.

For more information about Osborne’s approach to innovative construction contact Richard King ([email protected]).