The tragedy of Grenfell Tower is a shocking reminder of the need for competent procurement both in the public and private sector.
Fingers have been pointed at officials, contractors and MP’s. The sad fact of the matter is that this disaster took place because of lack of control over the procurement process. Local government authorities are designed to deliver essential public services such as housing. Contracts are supposed to be let on the basis of objective award criteria, ensuring transparency, non-discrimination, equal treatment, and competition. If the process is truly transparent then the decision to use flammable material at Grenfell Tower must have been clearly visible during the procurement process and this will need to form part of any investigation. The contract award procedures should ensure competition, but not at the expense of the community they serve.
Awarding Contracts Based on Most Economically Advantageous Tender (MEAT)
Buyers are generally obliged to award contracts on the basis of lowest price or most economically advantageous tender (MEAT). Using MEAT the buyer would consider a number of factors that would create economic advantage. There is a clear and present danger here. A lower price can be achieved by lowering other standards such as quality or type of material such as those used at Grenfell Tower. Economic advantage could be construed as cost cutting.
In terms of regulation, the public sector is required to ensure that bought in materials comply with defined public standards and specifications. Currently they are also required to comply with EU Public Procurement Directives to stimulate competition and make decisions based on value for money. With so many rules, regulations and the need for transparency where could the procurement process go wrong?
The Procurement Cycle Mistakes
Let’s turn our attention to the procurement cycle. At the very start of the process there would have been an identification of need. In this case, the need to refurbish the tower. With Early Buyer Involvement (EBI) the procurement team may already have experience in procuring cladding and able to give direction and advice to the stakeholders. The mistake here could have been a lack of procurement involvement or a lack of understanding of the need.
Crucially we then turn our attention to the specification. Allegedly the standards used suggested that materials needed to be ‘adequate’. In such a critical purchase such words are meaningless and can seriously affect accountability and responsibility. Other terms such as ‘best endeavours’ provide no sustenance in proving the value of what is being procured. Clearly anything being installed at Grenfell Tower would need to be safe beyond any reasonable doubt.
Supplier Selection Possible Errors
Moving on to supplier selection, the emphasis on competition and lowest price may influence the buying team to consider a number of suppliers based on poor decision criteria. The market can look very competitive when viewed based only on the number of suppliers, however if the selection criteria is rigorous enough, the many become the few and the market takes on a whole new landscape. Perhaps the view of the market suggested there were plenty of competent suppliers who could compete on lowest price.
Awarding the contract would involve the specification as part of the contractual documentation. If this was flawed earlier in the process the damage is already done. Diligence in producing contractual documentation and reviewing risks that may be present should always be addressed in high impact purchases. There would be an opportunity here to identify any conflicting statements or standards along with health and safety concerns.
Using Ongoing Contracts to Identify Potential Problems
Finally the ongoing contract and relationship management may have provided one last red flag that could have identified the problem. Monitoring of materials used, communications with the contractor regarding progress at Grenfell Tower, discussions with other stakeholders including safety experts.
Then there is that one other possibility. That the good intentions of the Government to create a transparent procurement process where lowest price and MEAT serve the public interest is poppycock. That the selection criteria results in poor decisions and that the procurement function is restricted and frustrated by other forces of power and simply does as it is told.
These are merely points of view. A full enquiry of the disaster at Grenfell Tower should reveal any errors and who might be responsible. But once again it identifies the importance of procurement in avoiding a towering inferno.
If you would like to help those in need after the Grenfell Tower fire, you can donate via the Red Cross’ London Fire Relief Fund.