In my youth, an evangelist visited my school. He spoke about the value of life, using household items to represent the elements of the human body – a piece of coal for carbon, some nails for iron and so on – arguing that we’re merely a mix of chemicals which, collectively, have little monetary value but which, existentially, produce people that are priceless.
I have recalled that message many times over the past five years because – and recognizing that the Grenfell Tower Inquiry continues – it is alleged that the Royal Borough of Kensington and Chelsea’s (“RBKC’s”) buying choices at Grenfell Tower saved it a modest £250,000, but that those choices led to a fire and 72 deaths.
The financial implications to the council and its suppliers can be calculated but the physical and emotional cost to the bereaved, survivors and relatives is immeasurable. In its worst iteration, bad buying can cost lives. That is not to impugn what the borough did or didn’t do; it may have worked within procurement rules, but the tragedy highlighted how the regime itself may be flawed. With an emphasis on awarding contracts to the most economically advantageous tender (“MEAT”) – most often equating to cheapest – there is always a potential to drive to the bottom. That may be something that the ongoing overhaul of public procurement law addresses – with the most advantageous tender (“MAT”) – reaffirming the importance of quality. Of course, that is great in theory; because as long as there are budgetary restraints, price will be king, until there is a cultural shift and more transparent procurement. And here endeth the first lesson.
But the problem with lessons is that they are not always learnt, merely articulated; heard but not applied. The tragedy highlighted how critical a role procurement plays in any business and that poor buying choices – like the Post Office’s IT systems – can have tragic consequence. In an ideal world, the procurement department should be seen as a strategic stakeholder, not an anathema to be circumvented. That means embedding the value of the discipline throughout a business and at every step of the process with enough skilled practitioners to provide well-defined specifications and manage contracts effectively. These factors alone won’t prevent another Grenfell, but they may well help mitigate it.
The tragedy has emphasized how important contracts and their provisions are when matters go wrong; an important message for businesses who see the deal first and regard terms and conditions as an afterthought. This cuts both ways; while buyers are looking for more in terms of liability, indemnity and warranty, savvy suppliers are offering less. At least one of our clients found that fewer fire inspectors were bidding for work post-Grenfell and that if it were to engage one, it would have to accept that liability for the supplier’s advice would not extend to owners, tenants and residents, as it once did. Fire inspectors are exiting the sector at an alarming rate and those left cannot get the insurance cover they once could. Buyers have to now be more pragmatic, while noting the risk.
Some of the suppliers to RBKC, in turn, have learnt that life after the tragedy would never be the same, not just as a direct result of Grenfell Tower but in bidding for other work. Ryhurst – whose group had supplied cladding to the council – won a contract with Whittington NHS Trust but, even though the contract was won post-Grenfell, the trust changed its mind and abandoned the tender. Ryhurst challenged the decision saying it was unfair and politically motivated. The courts disagreed; accepting that the authority had a rational reason – even if related to Grenfell – for fearing the supplier might fold. That decision, in 2020, demonstrated the rich scope for creativity even within the Public Contracts Regulations 2015 – regulations 18 and 67 specifically – and how skilled experts can help navigate a complicated legislative landscape.
The tragedy has highlighted many shortcomings in standard practices and there may be more to identify but let’s hope that we learn from the events leading up to the 14 June 2017.
Suzy Valentine is Legal Director at 4C Associates and advises clients on procurement law. She also worked on the Grenfell Tower Inquiry.
