Procurement

Recent years have seen industry’s engagement with government on matters of public procurement improve...

With a limited public sector capital budget in Northern Ireland, that engagement has been geared towards making procurement processes easier and more straightforward for local companies. 

On matters such as the centralisation of the procurement and delivery of key infrastructure projects, social clauses and Project Bank Accounts it is critical that industry continues to have its voice heard.

Issues of note impacting public procurement

Issue: Challenges in maintaining a clear project pipeline and difficulties in awarding contracts.

Challenges:

  • Constrained Capital Budget: The limited capital budget hampers the initiation of new projects and impacts the ability to meet infrastructure demands.
  • Inflationary Pressures: Rising inflation affects project affordability, requiring adjustments in procurement strategies.
  • Fixed-Price Contracts: Fixed-price contracts often fail to account adequately for inflation, leading to budget shortfalls.
  • Procurement Act Challenges: The Procurement Act introduces changes to public procurement, requiring adaptation for successful implementation.

Solutions:

  • Procurement Board: Seek to enhance the existing structure, remit, and powers of the Procurement Board.
  • Contract Flexibility: Adapt contract forms to introduce greater flexibility, particularly in response to inflation. Explore contract mechanisms that account for changing costs.
  • Two-Stage Approach: Embrace a two-stage approach for major building projects, incorporating target costs and pain/gain mechanisms. This approach can provide a more realistic budget envelope and enhance risk-sharing between clients and contractors.
  • Implementation: Ensure that reforms to the standard government contract clauses associated with cost inflation and risk transfer are implemented by all publicly funded bodies and that any further necessary changes are speedily identified and made.
  • Pipeline: Monitor the success of the revised procurement pipeline in providing the necessary certainty to industry on future investment.
  • Procurement Review Service: Establish a new Procurement Review Service which seeks to avoid costly and time-consuming legal challenges.
  • Assessment of Procurement Act: Conduct an assessment of readiness for the implementation of the Procurement Act. This assessment should address potential challenges and training needs for government and industry stakeholders.

 

Findings of latest NIAO report demand immediate focus from NI Executive

Posted on 27/02/2024
CEF comment on the publication of the NI Audit Office’s follow-up report on Major Capital Projects

 


 

DfI TRAM Procurement Plan 2023/24

Posted on 16/11/2023
DfI has published a TRAM CoPE Procurement Plan 2023/24 for contracts of a value exceeding £30k.

 


 

Construction sector in NI facing into dual headwinds of limited pipeline and stubborn inflation

Posted on 27/06/2023
The latest CEF Construction Survey reflects a local construction sector in which a squeeze on margins and political uncertainty, which is significantly impacting the pipeline of public works.

 


 

CEF's Patrons

 

Northern Ireland Electricity Networks PKF-FPM ABL Group Mills Selig