Housing procurement delays - key is the duration of the project governance process, not the procurement process!
There has been much talk recently about how long it is taking the Government and it's agencies to deliver housing ("Murphy says he can't shorten procurement process for social housing.", Irish Times Wednesday September 26th, 2018). The EU procurement requirements have been cited as a major road blocker to the quick delivery of housing stock in addition to adding significant cost on account of a number of factors. The reality is that the procurement itself is not the issue but rather the overall capital project management framework with it's staged approval gates - the duration of this project governance process adds a significant amount of risk to a prospective tenderer. This added risk, in the current inflationary construction environment and the backdrop of the Carillion collapse, is adding significant cost to contracting authorities as tenders look to target margin and not turnover.
The procedures themselves (when the evaluation and decision making times are minimised) take either 65 or 95 days depending on the process used.
However, the reality is that time taken to procure housing takes much longer - in most part due to the approvals and clarifications required under the capital works management framework. The following compares the public procurement process and the private sector process.
The extended duration of the public sector process pushes out the time to completion (approximately 18 months longer to get first phase of units completed) and increases costs all around - not lest cost inflation allowances given current market conditions.
The requirements for transparency and good stewardship of the public purse are important but what can be done to quicken things up and make the projects attractive to tenderers? The following is suggested:
Keogh Consulting looks to help individuals and organisations deliver the right projects the right way. Here is some of our knowledge and a few case studies that we hope will help you on your project journey.
Project Cost Calculator & Database
Cost Rental Simple Model
Cost Rental Complex Model