CEWales Newsletter - We need to learn the lessons of the failures

The core of this is how we procure construction services. We must stop the ‘race to the bottom’ culture that focuses on price to the detriment of value. Procurement therefore remains, the fundamental process that determines project success. CEWales’ many Exemplar Case Studies and award winners have demonstrated that; it is the number one determinant of how well clients will benefit from productivity, innovation, collaboration, skills, and experience that supply chains.

We must learn from the lessons of the failures; the demise of ISG is very sad and in many ways just as bad as the collapse of Carillion, Dawnus, WRW and Jehu. It feels like déjà vu because our industry has not learned. Constructing Excellence is all about business improvement. It was born out of the need to overhaul a sector that was adversarial and not collaborative, that failed to innovate and was focussed on price and not value. There are pockets of best practice but not enough. All too often contractors and sub-contractors agree to a fixed price and take on too much risk. The construction business model is not fit for purpose. It is too easy to blame the economy. The whole sector needs to rally behind Constructing Excellence and work with clients to make sure the country has the construction industry it deserves. That way we can build for future generations. The first step is admitting the failures behind both ISG, Carillion and others like them and apply and implement learning from the failings.

Public sector procurement has great potential to escalate ambition within the sector, respond to the climate crisis and facilitate a joined-up, efficient approach as outlined within the Well-Being of Future Generations Act, Wales. CEWales acknowledges the standardisation of frameworks as an important enabler of alignment with Welsh Government policy and objectives through delivery. Other co-benefits of standardisation include a reduction in costs to business in tendering contracts, costs to authorities and shifts to a value-based rather than cost-based procurement approach as found within the UK Construction Playbook. As such, CEWales aims to help build efficiencies within procurement. The requirements within the Building Safety Act and the Social Partnership and Public Procurement (Wales) Act will ensure this shift from ‘lowest bid’ to ‘best quality.’ This change is at the core of why CEWales exists – to promote, enable and drive best practice and create an environment for “next practice” to evolve. All of which require strategic endorsement to ensure implementation.