Construction procurement – Priority purchase

Construction procurement – Priority purchase
Kayode Valentine Fowode considers the legal issues involved in procurement, discussing how to mitigate any health and safety risks that may arise, and how practitioners should communicate these risks, both internally and to their contractors.

The way in which the Government does business is about to change radically. In an announcement in November last year, Minister for the Cabinet Office Francis Maude affirmed that it wants to make it easier for British-based and smaller firms to win government contracts.

Measures highlighted by the Cabinet Office as ways to achieve its objectives include:

• building long-term strategic relationships with suppliers;
• eliminating unnecessary pre-qualification form-filling and cutting red tape;
• ensuring that future major procurements only take place after speaking informally to potential suppliers; and
• banning the use of consultants in central-government procurements without express agreement. 

While such changes are welcome, it is nonetheless concerning that there is no mention of any expectation, or standard requirements – neither in respect of the Government nor its suppliers – to ensure effective management of procurement health and safety risk. Rather, as stated by Mr Maude, the emphasis is on cost: “The only question we will consider when choosing suppliers is who will give us the best cost-effective service.”

Clearly, a cost-effective service should be encouraged; however, this should not be to the detriment of effective management of procurement health and safety risks, which should also be given high priority. So, with the the Government’s plans on public-sector procurement laid bare, the opportunity has presented for practitioners to remind both the public and private sectors about procurement health and safety risks.

Mitigating risks – contractor requirements

Client companies (i.e. those that procure goods and services) should ensure that health and safety requirements are clearly identified and set out in specification documents. They should also try to ensure that:

• they specify products and services that reduce health and safety risks to the lowest level, and that, as a minimum, goods and services purchased meet legal requirements (for example, when procuring plant and equipment, note should be taken of s2(2)(a) of the HSWA regarding the provision and maintenance of safe plant); 
• their business partners comply with all the relevant legislation by incorporating these as a requirement within all their contracts;
• they take into account, within their tender evaluation and contracting processes, a potential contractor’s approach to health and safety within its employment practices and service delivery, which ideally should be monitored and managed during the life of each contract;
• they seek confirmation that the selected contractor understands the health and safety requirements expected of it and has the capability to meet them;
• they deliberate on the possibilities of engaging only contractors accredited by a member of the Safety Schemes in Procurement (SSIP) programme, or similar.

Contractors should also demonstrate to the client that they have in place an effective OHS management system, and will comply with any contract-specific OHS requirements.

Mitigating risks – work equipment

Organisations should also ensure they have a standard policy and procedures in place for purchasing safe equipment, plant and machinery, and chemicals, so that any such items bought for use in the workplace are safe and can be used safely by employees.

In order to comply with requirements under PUWER 1998, it is essential that organisations purchasing equipment check that it complies with all relevant supply laws. A good starting point to achieve compliance is to examine whether the equipment is CE-marked; free from any obvious defect; and is supplied with a Declaration of Conformity and English-language user instructions. Where this is not the case, such equipment should be disregarded and termed not fit for purpose.
In addition, it is good practice for those responsible for procurement (whether an individual, or a department) to seek the assistance of experienced personnel who have previous knowledge of using similar equipment, and who can check if it is actually safe for use.

A checklist can also be used to guide the organisation in identifying those critical factors that can easily be overlooked when purchasing equipment. The checklist should be designed to capture manufacturers’ responsibilities as expected under the Supply of Machinery (Safety) Regulation 2008.

The HSE document, ‘Buying new machinery’,¹ highlights what manufacturers have to do to ensure any equipment supplied is safe for use. This can also be used in producing guidelines on acceptance procedures and the checks to be made by the appointed employee responsible for purchasing equipment.

It goes without saying that the procurement department should aim to discuss its requirements directly with manufacturers or suppliers, wherever possible. The supplier or manufacturer should be informed of the intended use of the equipment, the environment in which it would be used, and the competence level of the user – e.g. will it be used by skilled employees, or trainees? This will enable the manufacturer to provide the procurement department with the most suitable options.

The procurement department should also ask probing questions of the manufacturers, such as: what risks to health and safety might result from the use of the equipment? Or, how well does the equipment control the health and safety risks compared with similar devices from other manufacturers?

Under reg.10 of PUWER, employers have a duty to ensure that work equipment has been designed and constructed in compliance with any essential safety requirements. So, it is beneficial to discuss your safety expectations with the suppliers at the early stage of procurement and cooperate with them by giving sufficient information that would assist them in their design. 

Ultimately, it can be expected that the purchase of well-designed ergonomic work equipment will help promote occupational well-being, reduce errors and accidents, and boost productivity.


Communicating responsibilities

In many larger organisations, buying decisions may be handled by a dedicated procurement department, which would, in most cases, rely on safety practitioners’ advice on how the health and safety competence of contractors should be assessed, in order to arrive at a reasonable judgement. However, ensuring that those making the buying decisions are sufficiently informed of the health and safety issues involved is not always easy, especially in very large organisations, or organisations spread over a wide geographical area, or with lots of subsidiaries and/or sister companies.

A simple but effective means of communicating procurement risks internally and clarifying individual or departmental responsibilities in any procurement process is to hold a workshop. This provides the opportunity to identify departmental responsibilities at the concept phase, design phase, tender phase and construction phase of any project.

For instance, in a CDM project, IT, estates and assets-management departments might have responsibilities at the concept stage to provide information for the pre-construction health and safety information pack and tender documents. They would also ensure that every individual involved in the design of the structure and every contractor who has been, or is likely to be, appointed is promptly provided with relevant information – e.g. any as-built drawings, or asbestos surveys. At the design stage, designs need to be verified to ensure that the structure can be built safely by the principal contractor and any specialist contractor.

At the tender stage, the commercial department would usually be responsible for ensuring that the pre-construction health and safety information pack is included as part of the overall tender documentation. This department would also ensure that the tender documents inform the contractor of any arrangements for providing welfare facilities for the workforce, and ensure that contractors on the tender list have sufficient and suitable competences and resources appropriate for the project.

Finally, at the construction phase, the IT, estate and assets-management departments would, again, assume the responsibilities to ensure that the principal contractor has adequate time to develop a construction-phase health and safety plan prior to work commencing and, on completion, receive a health and safety file from the CDM-coordinator, as well as access passes for maintenance and construction workers. The involvement of different departments may, of course, vary according to the business, depending on its organisational structure, the complexity of work, and the procurement route.

Health and safety practitioners should also communicate procurement responsibilities to contractors as soon as they are appointed and during the construction phase of a project, via pre-start meetings and scheme-specific induction. The pre-start meeting, which is essential in order to ensure that the contractor can continuously demonstrate a coordinated approach to the work they have been appointed to carry out, should be used to agree upon the following: the methodology of carrying out the work; the level of training and supervision required; the analysis of risks associated with the work; and any compliance issues.

It is also good practice to maintain liaison with all parties on site to ensure ongoing communication and cooperation, and to give feedback on contractors’ performance. Throughout a project, the health and safety risks that may surface as a result of their work should be communicated to all contractors promptly. Examples of effective methods of communication are:

• develop and distribute site memos to the relevant parties, informing them of any interference to their works;
• issue COSHH data sheets and assessments to the relevant parties to inform them of what materials your organisation uses and the hazards posed;
• notify all concerned parties about any isolation of, or disruption to, working areas or facilities once the contractor has been appointed; and
• schedule meetings with all parties to discuss any issues that might hinder health and safety.

Conclusion

Although not always at the forefront of business decisions, it is essential to consider the impact that procurement activity has on health and safety, and put measures in place to reduce its risk. It is also vital that the risks associated with the work carried out by contractors are well understood, and that close communication and cooperation are maintained between all parties throughout the procurement process.

Lastly, each procurement activity should be treated proportionately to the health and safety risks that arise from the contract on a case-by-case basis. Organisations’ procurement departments and any individuals responsible for buying decisions should also ensure that potential risks are fully assessed and that contractors provide evidence to demonstrate that their organisation actively promotes and manages health and safety.    

Reference

1     HSE (2011): INDG271 (rev 1) Buying new machinery: A short guide to law and your responsibilities when buying new machinery for use at work – www.hse.gov.uk/pubns/indg271.pdf

Kayode Valentine Fowode previously worked as a Consultant (HSE/CDM coordinator) at Turner & Townsend Project Management Limited.

Published By SHP Online : http://www.shponline.co.uk/construction-procurement-priority-purchase/

Posted March 14, 2012