PQQ inefficiency costs construction £20 billion

Repeated failure to implement recommendations to streamline pre-qualification questionnaires (PQQ) and avoid duplication of effort in the prequalification process has cost the construction industry £20 billion according to Professor Rudi Klein, chief executive of the Specialist Contractors Group (SEC Group)

Professor Klein was speaking at a Constructionline event this week where he said that failure to implement the recommendation had cost construction SMEs almost £20 billion since July 1994 when Latham’s report Constructing the Team was first published.

Almost twenty-one years ago Sir Michael Latham conducted a review of procurement and contractual arrangements in the United Kingdom Construction Industry. The Constructing the Team report recommended that there should be a single pre-qualification document for all tiers of contractors seeking to pre-qualify for work in the public sector.  A list of all pre-qualified firms would be maintained by the government.

Latham further recommended that the list of pre-qualified firms should develop into a register of approved contractors seeking public sector work with a ‘star’ system related to performance.

PAS 91, sponsored by both government and industry, is the current standard pre-qualification questionnaire, but research carried out by SEC Group last year revealed that only a few public bodies are using it exclusively.

The £20 billion cost to construction is a cumulative figure for the 21 years since 1994 and is based on research carried out by SEC Group in 2009/10.

Professor Klein said: “This figure does not take account of the overall cost to the taxpayer of each public body administering its own pre-qualification questionnaires.

“Constructionline was originally intended to provide a register (of approved contractors) but government at the time was not prepared to go as far as this.  In consequence both the taxpayer and industry has sacrificed billions. Surely it is time to re-revisit the solution that was proposed 21 years ago.”

The Public Contracts Regulations 2015 now require that public bodies report deviation from the standard questionnaire to the Cabinet Office/Crown Commercial Service.