Past Chair of the Institution of Civil Engineers (ICE) Wales Cymru, Ken Evans, explains what needs to happen to help contractors cope with ongoing supply chain issues
Everyone working in the construction / civil engineering industry is well aware of the pressures and issues that have hampered the delivery of projects over the last few years; from Brexit and the impact that has had on material availability, the war in Ukraine that is currently impacting the cost and quality of bitumen, the lack of young people coming into the industry, to the overall rising cost of materials that at one stage seemed to be escalating by the week.
Let’s be clear, contractors have to navigate a broad sphere of issues that constantly keeps them on their toes and 2023 is going to deliver a whole raft of them.
Public procurement is in for a big shake-up! In Wales, the new Social Partnership and Public Procurement (Wales) Bill is awaiting Royal Assent and will see the establishment of a Social Partnership Council, and in England the Procurement Bill is making its way through parliament. Businesses involved in winning public contracts will need to familiarise themselves with the Common Assessment Standard – an industry-led pre-qualification system covering a range of compliance topics from health and safety to modern slavery and corruption.
There will also be Building Safety reforms following the introduction of the Building Safety Act in 2022. And, social value, quite rightly, will take on more and more prominence with a more person-centred focus being demanded, resulting in genuine, tangible impact and community legacy. This is something the SEWSCAP and SEWH frameworks have been leading on for the last two years, educating contractors in the process, and should be applauded for.
But possibly the biggest issues being faced are the ongoing challenges of supply chain costs and labour shortages, leading to more pressure when tendering. Whilst costs may have stabilised somewhat, problems have been severe and this has had a huge impact.
For example, the supply trade is still unsure about what prices to quote for materials, as by the time a tender is complete the prices have invariably risen. This raises issues when completing a tender; numerous suppliers now need to be approached for quotes in order to get competitive prices, whereas previously, when costs were more stable, you could approach a supplier, knowing you were already getting a competitive price. This process now adds more complexity onto tenders, ramping up the pressure to complete a tender on time.
This issue also affects retendering; supply chain costs will no doubt have risen from the costs quoted for the original tender, making retendering more problematic.
But there is a way forward…communication and collaboration!
To help overcome supply chain issues there needs to be greater communication via workshops and round table discussions. These must include all potential partners, from contractors and Local Authorities, to frameworks and education providers. Only through this type of collaboration will there be greater understanding of the pressures and cost issues that exist within the supply chain that has a huge, knock on effect to project timings and delivery.
Reinforcing this should be renewed focus on education providers and case studies, highlighting companies who have successfully attracted the next generation into construction and civil engineering. They should be encouraged to explain how they managed to recruit, what they got right, what not to do, and educational establishments should be supported in getting the right messages across to students.
There also needs to be better focus on Risk Allocation within projects and it is crucial that Terms and Conditions reflect specific situations on each project so everyone is aware of the issues, and responsibilities.
It’s not rocket science, but unless there’s greater communication, supply chain issues will continue to hamper project delivery and ultimately, that benefits nobody!
