Spotlight on RENEW tendering plans
21 March 2010
RENEW North Staffordshire’s tendering procedures have come under the spotlight in recent months. Here Paul Hodgkinson, Stoke-on-Trent City Council Finance Officer explains what their procedures are and the progress being made to ensure local construction firms benefit from local regeneration activity.
Procurement policies for RENEW
RENEW North Staffordshire has undertaken a robust process to appoint organisations to its four procurement panels; Developer, Registered Social Landlords (RSL), Contractor and Professional Services.
Over 70 organisations now sit on the panels and many are delivering services for both RENEW and its partner agencies within the pathfinder boundaries. Over 30 per cent of these organisations are based in the North Staffordshire area. Many others are based in Birmingham, Manchester and London. They have been appointed for the skills, expertise and capacity that they offer the pathfinder and its partners in delivering the extensive pathfinder programme of activity.
RENEW clearly required all organisations applying to join its panels to respond to a number of issues as part of the pre qualification process including;
“Part 2: Further material to demonstrate understanding and approach to the RENEW North Staffordshire panels, including suggestions that can enhance the process. This should specifically include:
• Statement of approach to working with RENEW North Staffordshire and partners including relevant examples of previous regeneration projects in partnership with the public sector and the contribution they have made to local economic indicators
• Clear proposals on what you can add to the RENEW North Staffordshire programme
• Views on how the panels should be structured and how to ensure that this process is a success
• Experience of working with local communities, including consultation techniques you consider particularly successful
• Approach to maximising opportunities for employment and training for local people through the pathfinder programme, including examples of your experience from elsewhere and details of your approach to working with a local supply chain
• Commitment to supporting the local business supply chains
• Commitment to innovation and imaginative solutions
• Understanding of what constitutes a ‘sustainable development’ and how this has been evidenced in the projects delivered”
All of these elements were scored as part of the appointment process.
Progress in building local clauses into major contracts
Commitments to recruit and source locally are legally extremely difficult to enforce and require both carefully working and the commitment of the partner organisation. Panel members have made the commitment to work with RENEW on this issue as part of their appointment to the panels although most have pointed out that this will only be achievable if there is a commitment from RENEW to a steady stream of work to maintain the investment.
With a number of major contracts being introduced, RENEW has developed a first set of benchmark clauses which are being introduced into our contracts. These are set out below;
“The organisation will use best endeavours to:-
Have 30% of its employees who are solely involved in the project living in areas which have RENEW post codes and 70% of its employees solely involved in the project living in areas having Staffordshire post codes; and
Have (x) locally sourced apprentices during the course of the project who will be trained through a combination of the Newcastle and Stoke on Trent Colleges; and
Have 50% of its sub-contractors (by value) employed in the project placed with businesses with a RENEW post code and 50% of its sub-contractors (by value) employed in the project placed with businesses with a Staffordshire post code; and
Purchase 40% of all materials used in connection with the project (by value) from suppliers whose principal place of business is in an area with a RENEW post code and 60% of materials used in connection with the project (by value) from suppliers whose principal place of business is within an area with a Staffordshire post code”
RENEW recognise that the principles being established with these clauses need to be developed over time. Specifically we are considering;
- The linkage of the clauses to financial incentives and penalties – currently we are in discussions with a major developer on the introduction of these provisions. It is hoped that this will result in a series of benchmark clauses being developed for use in other contract negotiations.
- The increasing of the percentages of labour and supplies from the RENEW area over time.
Build Up North Staffordshire is an initiative led by Stoke on Trent City Council. Members of the network include other public and private sector organisations and business support organisations who offer a range of services to help North Staffordshire’s construction companies obtain the skills and qualifications needed to win contracts and develop their businesses.
The construction industry in North Staffordshire can access this initiative to link local businesses to the contracting opportunities created by developments in the area. In particular it links the larger contractors who are operating in North Staffordshire to the smaller local construction based businesses. The process is supported by a database where suppliers can register free of charge to seek support to develop their businesses. Build Up North Staffordshire buyers are then able to search this database for suppliers with appropriate skills.
RENEW is fully supportive of the Build Up initiative and was involved in the original setting up of the project. RENEW recognises that Build Up is an important and influential vehicle for ensuring that our main contractors and developers achieve the local labour clauses introduced into its contracts.