ANDREW MORRISON sets out his views on the likely trends for those involved in bidding for new or retention work in 2020
As we enter a new decade a number of issues will affect contractors and bidders in the public and private sectors. Here are 10 trends that are most likely to have an impact.
Brexit – This is likely to continue to cast a shadow over the sector’s decision-making. Whilst the UK will now be leaving the EU on 31st January 2020, all eyes will be on the type of Brexit that the country gets following the expiry on 31st December 2020 of the transitional arrangements within the Withdrawal Agreement. Will trade talks be concluded in a virtually unprecedented 12 months? Will the Government ask for an extension (seemingly unlikely at present)? Or could there be a hard Brexit? Concerns about the post-2020 landscape may act as a brake on some decision-making.
Environment – Greta Thunberg (TIME’s Person of the Year for 2019), who turns 17 in January 2020, has succeeded in getting environmental issues higher up the agenda than they have been before. Expect to see both public and private sector clients showing increasing interest in the sustainability impacts of their projects as well as examining the environmental credentials of their contractors and supply chains. There will be investments in green infrastructure and clean energy solutions. The UK is hosting the UN’s Climate Change Summit (9th-20th November) in Glasgow so the eyes of the world will be on whether the ‘new’ UK Government is walking the talk on the environment.
Infrastructure and Housing Investment – The Conservative Manifesto promised investment in Northern Powerhouse Rail, Midlands Rail Hub, building 40 hospitals as well as civic and cultural infrastructure. The Government will consider the findings of an ongoing review into the future of HS2. There should be a raft of tenders coming to the market to cover all of this committed new investment (a promised £100 billion of infrastructure investment during the next 5-years). A Social Housing White Paper has been trailed with a need for 300,000 new homes each year. The Tory Manifesto promised 1 million new homes during the 5-year Parliament. The housing world is also watching for the Hackitt Report to be implemented with further recommendations also expected from Phase 2 of the Grenfell inquiry.
Social Value – This is assuming increasing importance in public sector bids and it is not uncommon to see social value accounting for 10%-15% (or 20% in the case of the North West Construction Hub frameworks) of the technical/quality scoring. Bidders are being required to evidence their social value commitments, calculate their value and then actually deliver them (or in some cases face financial penalties / service credits).
Diversity & Inclusion – There is increasing emphasis on fair working practices including gender balance and welcoming BAME (Black Asian Minority Ethnic) employees. However, with the triple whammy of less foreign national labour, an ageing workforce and skills shortages, bidders need to embrace diversity to have any kind of realistic prospect of having a workforce fit for the 2020s and beyond. Some successes are being noted with Fair Recruitment Training and blind CVs. With 1 out of 4 people experiencing mental health issues at some time in their working lives, employers need to ensure that they are creating the right environment for people to speak up when they are in difficulties with the knowledge that they will be supported.
Use of SMEs – The large construction sector corporate failures of the past few years (with the suspicion that there are some more still to come) as well as the public sector’s stated target of increasing procurement spend with SMEs to 33% by 2020 should mean a continued focus on SMEs – both as principal contractors and within the sub-contract supply chain of main contractors. Whilst the Public Contract Regulations 2015 require all public sector organisations to pay undisputed invoices in 30 days and ensure that this payment term is passed down the supply chain, there is still inadequate monitoring and penalties to make this more likely to stick.
IndyRef2 – As England and Scotland have very different parties holding sway, 2020 is likely to see some heated debates about a second independence referendum. Similar to the Brexit process, a referendum can mean that some big investment decisions in both the public and private sectors may be deferred until the tectonic plates feel a little more settled.
Disruptive Technology – Artificial intelligence, machine learning, hyperautomation, blockchain, robotics and digitisation all have the capacity to be severely disruptive to many sectors in which bidders are active. For example: IT, financial services, construction, professional services and the care sector to name a few. Bidders will need to articulate how they will be using technology to achieve efficiencies, both in time and money.
Data Security – Most contracts involve data sharing / data transfer. Buyers are placing increasing importance on data security. Therefore, evidence that bidders have systems and protection in place to avoid both cyber attacks and data breaches is more frequently a requirement. Winning contracts without having at least Cyber Essential in place will become more difficult. Therefore, bidders are strongly encouraged to take steps to evidence that their IT security is robust.
Outsourced Bidding – More and more organisations – large, medium and small – are recognising the benefits that accrue from bringing in external experts to support their bidding capabilities. In addition to at times providing resource cover for peak periods / to cover staff absences, excellent results can also be obtained by deploying them strategically to review addressable markets, bid strategies, bid processes, bid responses and the training needs of those involved with the in-house bidding function. Of course, for many SME firms, it makes sense for them to outsource their bidding function rather than have the staff costs of bid professionals. Bringing in outsourced bidding expertise helps level the playing field for SME bidders who often will be up against main contractors with standing bid teams.
Andrew Morrison is founder of AM Bid – Scotland’s largest bids and tenders specialist
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