The annual cost of prequalification for the industry could exceed £1bn. By Rudi Klein
This is made up not just from the cost of subscriptions for the various vetting processes and schemes but – more importantly – the cost of completing lengthy forms and audits. If we did a cost benefit analysis on this expensive activity, would we be able to quantify the benefits? In fact, what are the benefits?
I doubt if anybody has considered the answer to this question. The people who are responsible for creating the costs do not (I suspect) consider whether any value has been delivered. There is no evidence that all this expensive pre-qualification activity has created improved value for money for clients.
Pierse Construction, for example, is now in administration. Together with a sister company it had 73 county court judgments against them. The company’s net worth was -£5m but it still managed to get work from public sector bodies.
The Safety Schemes in Procurement (SSIP) Competence Forum was launched in May with support from the Government and the HSE. The forum is fully supported by the industry’s representative bodies. This could mark the beginning of the end of a scandalous state of affairs which has bedevilled the industry for some years.
Members of the SSIP include pre-qualification assessment providers - Constructionline, CHAS, EXOR and NHBC. They have agreed to maximise mutual recognition between their schemes in relation to the core criteria for health and safety competence in the Approved Code of Practice to the CDM Regulations 2007.
Therefore, if a firm is registered with Constructionline it would not have to re-qualify through CHAS, EXOR or NHBC.
The HSE said at the time: “Any client that procures the services of a supplier through a SSIP Forum member can be confident that they have met the requirements of a Stage 1 Assessment under CDM 2007.”
The Stage 1 criteria include a firm’s arrangements for health and safety risk management, training, monitoring procedures and appointing competent sub-contractors/consultants.
The next step is for public sector clients to accept that membership of any one of the four schemes will suffice (in so far as the core criteria are concerned) without the need to join other schemes. Clients should ensure that this approach is applied all along the supply chain.
Where firms are required to join or be vetted by schemes operated by those which are not forum providers, clients should be asked the following questions:
- Why are they using a provider that is not a member of the SSIPP Forum which is supported by both the Government and HSE?
- What steps have been taken to ensure that the non-forum scheme is compliant with the core criteria under CDM 2007?
If there is non-compliance with the CDM core criteria there is, of course, non-compliance with the law. Any firm that is required to be pre-qualified under a non-compliant scheme could find itself open to prosecution. It could take steps to become compliant but this would simply be yet another burden.
Now that the SSIP Forum has shown the way let’s develop a similar – standardised – approach to pre-qualification in relation to other matters such as financial standing and technical proficiency.
Professor Rudi Klein is chief executive of the Specialist Engineering Contractors’ Group.