Categories: Pagabo News, Thought Leadership
As an organisation we reacted quickly to the government’s recently released Procurement Policy Notes (PPN 01/20) which provides contracting bodies options for emergency works directly related to helping in the recovery phase of COVID-19.
"We will do all we can to help the public sector bounce back from the current pressures" says Jason Stapley, Managing Director at Pagabo.
“When the government issued its Procurement Policy Note 1/20: Responding to COVID-19, Pagabo acted quickly. As well as this crucial support from government to activate vital emergency projects rapidly, Pagabo was the only framework provider to offer our framework agreements rebate-free where extreme urgency was required'.
The construction bounce back
Jason continued, “Government has recognised that the construction sector is central to the UK recovery – and therefore frameworks will be even more critical for the post COVID world as public sector bodies look to activate ‘on ice’ projects quickly and effectively. But organisations are also activating frameworks right now – as well as through the PPN 01/20 which allows contracting authorities to adjust their procurement approach to meet urgent needs. To protect public money and resources, authorities must demonstrate a robust business case, suitable governance, and best-value decisions.
“At a time where we are looking to add robust support to clients, we have had a number of requests which have come through. We are progressing with three projects currently which require essential work, directly related to COVID and were able to activate the PPN 01/20 – and our Pagabo rebate-free model. Not only were we able to act promptly for the clients but have waived the framework fees which helped both client and contractor in moving these emergency projects forward.
“Despite the exceptional circumstances, our sector continues many of their usual activities. Construction projects and programmes continue to progress, albeit with restrictions and at a reduced pace. Future projects are being planned for when ‘normal’ life resumes, and emergency requirements are being created and facilitated at speed.
Procurement made simple
Jason added, “We strongly believe that the quickest and most efficient way to procure is using a framework agreement — particularly one with a designated Direct Award process. All of our framework agreements allow for direct appointment and provide clients with a ready-made, simple and compliant solution, accelerating access to works, goods and services providers.
“But aside from the current COVID circumstances, clients need to work with framework organisations which are transparent about fees. Not all frameworks are, and there may be costs throughout a project which clients may now expect. Pagabo is proud of its transparency around fees and we feel that at an industry, framework organisations have a responsibility to offer that clarity – and particularly post COVID as we move into recovery phase.
Selecting the right framework provider
“Framework providers must provide simple, affordable and accessible solutions, but they must go further. In the same ways that the public sector needs to consider the suitability of their consultant or contractor, the public sector must choose a framework provider carefully, said Jason.
We believe, public bodies should ask their framework organisations a series of pertinent questions, these include:
"They should also look at their framework KPIs and how these are monitored - including social value. They should ask about the organisation’s procurement team. Afterall, it’s this team who should all have the expertise and necessary qualifications – including MCIPS, MRICS, and project management, added Jason.
Open and honest fees
Jason discussed the topic of fees and how a framework provider should structure their fees, saying, "Public bodies should ask about the fee structure and how the framework provider charges their fees. They should also be asked if they have documented research with regards to the value of the framework. It is also important to find out if the framework provider has carried out extensive engagement with the market to establish a real estimate of the whole framework agreement. In short, frameworks should be simple, transparent and affordable.
“Some frameworks operate in different ways, but it is important for framework organisations like us to be open and honest about fees. To be clear, there is no such thing as a rebate free framework of course. But the way Pagabo charges on a ‘pay as you go’ basis offers clients clarity – and the ability to manage fees through the life cycle of the project. It’s important to look at the whole cost of procurement, and not just look at a rebate fee.
“Pagabo begins the charging process after a project has started – not before. Some frameworks charge up front rebates based on a percentage of the project. But we don’t do that – even if a project falls down or there is a reduction in the construction of the project. Other organisations apply a ‘beginning and end’ charging structure and the contract must bear the charge at the beginning.
Jason continued, “Frameworks need to act differently in the post COVID world. There is a lot of emphasis on contractors and consultants acting responsibly, but as part of the journey, Framework providers also need to work differently to help government realise its objectives.
“At Pagabo we are listening to clients and understanding which projects our public sector clients are looking to activate and when. We are sharing that information with our partners, where and when we can - to instil confidence and help them plan for the recovery phase and beyond.
“As a backdrop to that to all of this, we are seeing a tremendous amount of client access agreements coming through, which is really encouraging. Despite the current challenges, we can see clients signing up and activating services from the design and early stages. There has been no real waning in the design side of things – which is both positive and hugely interesting in the current circumstances.
The short and long term strategy
Jason closed, saying, “We can see clients progressing – and even accelerating – the design phase. Clients want to be prepared and get their design discussions progressed, ready for when projects begin again. This early work is buoyant because clients are making use of the time to progress the design elements.
“Our partners are also telling us that while productivity may be lower, it is giving them an opportunity to look at their long-term strategy. They say that a strong strategy will help them through this recovery phase. And they say they see great benefit to align with the opportunities being brought to the table through Pagabo. Our partners say that Pagabo continues to be a fresh source of opportunities – and how we support and help our clients is a key part of what we do.”
Throughout this unprecedent period we have continued to support our ecosystem in as many ways as we can.
Implementing small changes to the way we operate as a business, inculding, waiving fees for our clients, encouraging prompt supply chain payment and regular business updates through our PUBS sessions (Pagabo Update on Business), really make a massive difference to our partners.
We will continue to provide this support in the near future and beyond.
For more news on how we are supporting our ecosytem during this unpresendented time, click below: