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Private sector should learn from public procurement test

Dramatic savings are on offer if new public procurement models live up to expectations, according to the final report of the Procurement/Lean Client Task Group.

Commissioned as part of the government’s review of construction, the report said procurement reforms should be copied throughout the public sector.

It predicted that the private sector would want to take up new procurement techniques that public bodies demonstrated worked.

Projects were chosen earlier this year to test the merits of the integrated project insurance, cost-led procurement and two-stage open book procurement models.

In its report, presented at today’s government construction summit, the Task Group said it was “confident that the government will secure dramatic benefits and value for money for the taxpayer if it can consistently apply these [three] models across central government and, if possible, the wider public sector”.

It said tough economic conditions for the industry had created “a window of opportunity for reform that must be grasped”.

Cabinet Office minister Francis Maude said at the summit that when he took office in 2010 “businesses from every industry were queuing up to tell us what a nightmare it was to bid for government work”.

He added: “Our procurement processes were notoriously bureaucratic, time-consuming and at times eye wateringly expensive.”

The three new models marked a determination to change this as they had been designed with the industry “to foster collaboration and innovation” he said.

If the Government Construction Strategy achieves its aim of cutting 15-20 per cent off costs, “it is not unreasonable to expect that this would trigger similar reform across the private”, the report said.

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