A historic overview on the development of building procurement systems in the UK from post war period (1945) present day. The points in evolution a split into 4 phases;
1.1)Phase 1 1945 – 1972:The period before the World War 2 selective tendering methods were being used more prolifically, the Simon report 1944 (ministry of works 1944) strongly recommends the use of selective tendering. After the end of the 2nd World War there was an increase in the building industry, this resulted in using procurement methods such as open competitive tendering despite the report in 1944.
In the 1950’s the Phillip’s report reiterated the recommendation in the use of selective tendering and explained the need for co-operation from all parties in the construction process (HMSO 1950). However by this time new procurement systems such as negotiated tenders and design and build had come about.
Through the 1960’s to the 1970’s the need for co-operation between the industry and its professions was further expressed in the Emmerson report 1962 and Banwell 1964, they also reiterated in this period the recommendations of the Simon report 1944 and the use for selective tendering.
Over all from the end of the war to the 1970’s this was a time of uninterrupted economic growth in which construction procurement in terms of conventional methods prevailed, only where few unconventional methods where being used on smaller projects, Despite a number of reports in the period recommending the adoption of more co-operative approaches from members of the project team.
1.2)Phase 2 1973 – 1980:Phase 2 was a period of recession and instability, which was a result due to large price increase of crude oil from other countries, Post the 2nd World War after the economic boom this was lead due to high inflation rates. A number of case studies during the 1970 had brought to attention the use of non-conventional procurement methods.
The wood report 1975 examined purchasing policies and procurement, although the report was restricted to the public sector it stated that public authorities used inappropriate procurement methods due to circumstances and found that 40% of the projects that were examined still used non-conventional procurement.
Reports that followed this stated the need for improvement and urged a state of recovery as clients did not want to commit themselves to building projects during a time economic uncertainty.
1.3)Phase 3 1980 – 1990:This phase was a time of post-recession the period of adjustment and recovery, big changes were made in the economy and the construction industry it introduced labour-only subcontracting and changed attitudes of major clients.
Major clients and organisations had decide that old existing procurement methods were inefficient and caused delays therefore leading to extra cost at the end of projects, So bigger organisations such as the British property federation (BPF) started to use ideas from the US to improve their own management and procurement systems.
In this period conventional methods were popular and were still widely being used, there was also a substantial increase in the design n build and management contracting, however management contracting proved in early years to take longer and dissatisfy clients if poor management was involved due to projects being overrun so there was a suggestion to reduce this method.
1.4)Phase 4 1990 – 2008:The period from around 1990 up to the credit crunch (recession 2008) contained around equal phase of recession and recovery as it did from the post war period. In past decade the advent of partnering and the increase in various private finance initiatives had come about, there were also efforts by the governments to improve the performance in the construction industry.
Two main reports were the means of vastly improving the industry, these reports were made by ‘Sir Michael Latham’ (Constructing the Team) and by ‘Sir John Egan’ (Rethinking Construction), these two reports changed the industry by improving the inefficiencies towards procurement and contractual agreements within the construction industry. The reports brought about a number of initiatives such as;
•M4I – the Movement for Innovation was formed in 1998 I was to co-ordinate the report ‘Rethinking Construction’ through the use of demonstration projects, working groups and knowledge exchange,
•KPI’s – are a product from ‘M4I’ and the ‘Egan Report’ they were set to create targets in which had to be met in order to achieve improvement, a number of ‘KPI’s’ were created but were refined in the year 2000 to around elven different aspects of the process of construction,
•PFI’s – private finance initiates were brought about by the government to enable public projects to be funded without the need for the capital from the government,
•Partnering and framework agreements – had already come about before 1994 but were given great impact by the ‘Latham Report’. Partnering is where contractor’s works with client to reduce and share costs, the partnering framework agreements are the contractual agreements between both parties.