Procurement changes bring new focus for contractors sourcing steel products

New government guidelines designed to help create a “level playing field” for UK steel producers are expected to start to have a significant impact on steel product procurement during 2017.

All new major infrastructure projects, as well as smaller projects which are deemed to involve an element of public sector spending – either directly through HMG departments or departmental agencies – will be subject to the changes set out in PPN 11/16 and its accompanying guidance notes.

There are significant implications for contractors procuring steel through the supply chain, and CARES has been working closely with departmental officials involved in the development of the new guidelines, which now update and replace PPN 16/15. Much of the content of the new guidance is closely aligned with CARES’ approach to sustainability through the SCS scheme, but there are important additional points which need to be addressed in procurement.

Examples of some of the factors to be taken into account are:

• A focus on the social and environmental characteristics of materials sourced for public sector projects.
• The ‘social’ elements to be addressed in steel procurement include core health and safety requirements, but also highlight for the first time employment factors including an emphasis on training and the long-term unemployed.
• Suppliers which are identified as having breached ethical or social and environmental standards can be specifically excluded from the procurement process, and
• A new focus on product pricing with HMG contracting authorities required to assess tenders based on whole life cost, not lowest purchase costs, and to reject prices which are “abnormally low.”

Each of these areas is currently under active review by CARES.  Extensive engagement with the construction and steel sectors is taking place to ensure appropriate alignment with the HMG guidance. Further updates will follow in due course.