Getting public contracting right in a digital age
James Graham, CEO of Digital & Energy Services at Equans UK&I recently spoke at the Government Property Conference in London.
As part of a plenary session, he explored the application of innovations and technology in unlocking outcomes including net zero for public sector buildings. He also considered the best commercial arrangements for success.
From my conversations with clients and industry stakeholders, it is clear to me that there are some key overarching challenges facing public sector estates. These include a need to drive cost effectiveness across government property, while also creating low carbon and more user-friendly buildings.
"Public-private sector collaboration is already playing a critical role in addressing these challenges – for example, Equans is working to provide specialist solutions in energy efficiency and digital services, helping to unlock positive outcomes."
But technology is moving at a fast pace and to realise the full potential of the latest innovations, such as AI and advanced smart buildings, a progressive mindset from both government and private sector is required. Innovations have often extended and uncertain paybacks, investment from both parties working together will be necessary to realise the benefits of any such new technology.
The relationship between government and industry, therefore, is now more important than ever. However, to enable the public and private sectors to work together more effectively we need to get contracting right.
It's not uncommon for public sector commercial relationships to be reported negatively in the press when things don't go to plan. It's imperative to learn from these experiences, because the themes of what can go wrong are often replicated across public-private contracts.
Perhaps in the future, technology could even help us to create near-perfect commercial relationships and to that end, I asked AI chatbot ChatGPT how commercial excellence should be delivered by public sector property professionals. The robot responded with the following:
- Maximising financial return on property assets through effective management and utilisation,
- Adhering to ethical and transparent procurement processes,
- Ensuring compliance with relevant regulations and laws,
- Developing and maintaining strong partnerships with stakeholders,
- Incorporating sustainability considerations in property decisions,
- Continuously seeking to improve property services and outcomes for the public.
The human component
All of these points are very sensible but how do we achieve them by working within private and public sector partnerships? From my experience in senior commercial & operational roles within central government, healthcare and PFI, the following three factors matter the most in creating and maintaining productive commercial relationships - skills, scope and shortfalls.
Skills
We're accustomed to thinking about technical and engineering skills, but we also need to value the skills of contract managers, as they are vital to making a partnership work. In the past we've tended to think the public sector lacked these skills, but recent years have seen a flow of skilled people from the private to the public sector. Therefore, this past perceived disadvantage of the public sector is no longer an issue.
Scope
It's essential to be clear about the scope of what the contract is trying to achieve but, often, the data is poor, so the scope is unclear. Without this clarity, there is often no true understanding of what is being asked for, rather than different interpretations by different people of what is being asked for.
Shortfalls
We are all aware of contracts where things have gone wrong, but thankfully these are the exception. Nevertheless, however well-run a contract is there will always be shortfalls so it's important to keep these in perspective whilst also acting to remedy them. Yes, there may be some aspects of a contract that aren't working but the key question must always come back to 'do they impact the service?'
The key is to focus on the elements that deliver the transition we are looking for, while also providing value for money. And when something does go wrong we have to work together to put it right. This requires transparency, communication and pragmatism, without which there will be no clear view of the scope of the contract.
If the parties remain committed to the same outcome and work together in the right way, then they can work productively together to resolve any issues. If they're entrenched in a position and can't move forward, then it's more difficult.
Summary
To achieve more efficient and effective net zero estates we need investment from both public and private sectors, and we need to deploy the latest technologies. Our working relationship is key to this.
To ensure value is created from public funds, it's essential that works are scoped accurately from the outset, and that we have people with the right skills to make sure that happens. When things don't go to plan we should understand why, while also considering what the real impact is on service delivery – the context is key!
I wonder how long it will be before these commercial relationships can be managed by AI. Perhaps sooner than we think – but in the meantime, the human component is more important now than it has ever been. Without working together in the spirit of transparency, communication and pragmatism we won't get to net zero, nor will we develop the workplaces people deserve.