Responsible Procurement: The SME Challenge

This is a guest Spotlight by Claire Bennie, Director at Municipal, an urban development and design consultancy with a focus on delivering of good housing on public land.

Local authorities are building homes again in London, on sites large and small, moving at pace to establish their programmes and building capacity as they go.

Small Site: Former garages Everton Mews in LB Camden’s Netley Development

An integral part of building a new homes development programme is the procurement of external design teams and contractors. Many authorities have understandably taken a lower-risk approach to this procurement to date, as they build up their commissioning skills and supplier knowledge. But we are now seeing some authorities refining their procurement strategies to add innovation, social and local value to the mix, something the GLA is promoting under the banner of ‘responsible procurement’.

Architectural firms number nearly 1,400 in London, with 85% employing fewer than 20 people; sites with capacity for 20 homes or fewer comprise a high percentage of local authority development opportunities.

This combination of small, local and energetic practices with small, complex and demanding sites should be an obvious marriage of opportunity and resource. But the challenge for public authorities is twofold. First, senior public decision-makers are yet to be convinced that smaller, perhaps less experienced firms understand their culture, their pressures and their risks. And second, even if councils are willing to take the perceived risk of working with smaller design firms, public procurement regimes are often set up to exclude them.

So how can we better enable that ‘obvious marriage’ to get more homes built on London’s myriad of small sites? Future of London, Municipal and Feix & Merlin convened a roundtable in July 2019 with senior representatives from six London boroughs and six SME architectural practices to explore the potential benefits and barriers to working together.

Everyone in the room was quick to see the many benefits of small architectural practices. Councils get to know the practices personally, dealing with company owners and seeing their smaller schemes treated with strong commitment. They are also likely to see flair and innovation, new ways of engaging with local residents and a welcome challenge to the usual ‘look and feel’ generated by the established firms. And councils can use their public procurement power to grow small businesses, preferably employing local and diverse residents who have an affinity for their neighbourhood.

But what about the risk of inexperience or financial vulnerability? The authorities agreed that the further along they were in their commissioning journey, the more confident they became in seeking out and then working with good but less established firms. So there’s a bit of patience needed from the architectural sector!

We are proposing a showcase exhibition and case study publication celebrating the work of those councils and small practices who have collaborated successfully to achieve the benefits cited above. The case studies will make clear how councils procured SME practices without exposing themselves to risk, whether that be through sub-consultancy, staying below OJEU fee limits or via a mentoring system between larger and smaller firms.

Public procurement processes were clearly frustrating the architectural practices, who incur major abortive cost and time to complete often opaque and confusing tender documents. Whilst the authorities were sympathetic and many were moving towards nimbler processes, they explained that councils had governance and legal strictures which constrained their flexibility.

Many councils said they would welcome simple procurement flowcharts and template tender documents which ensured both compliance and simplicity, and which broke down some of the ‘myths’ which can surround public procurement. The authorities further considered that if procuring SME design teams became a condition of grant funding, everyone would work out how to do it! The GLA has a leadership role to play here, and could start by procuring its own SME panel via a lean process.

The roundtable was a rare and valuable chance for small firms of architects able to listen to the clients they so badly want to collaborate with. Future of London plays a vital role in making those conversations happen, with Municipal providing the sometimes-needed translation service between the parties! As the councils move through their first development cycles, the sharing of best practice in ‘responsible procurement’ will I hope be a continuing dialogue.

If you would like to get involved in this work, please email Future of London at events@futureoflondon.org.uk.