CIHT president Neil Johnstone has firsthand experience of procurement from ‘both sides off the fence’ and shares what he’s learned and what the future holds for an important part of the highways and transport sector.
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Prior to taking up the presidency of the CIHT, much of Neil Johnstone’s time was spent dealing with procurement, both as procurer and tenderer. As such, he has a big affinity with those who work in that sector. “Procurement professionals are a great group of people and I think what's front and centre in their minds is maintaining the integrity of the processes,” he reasons. “With other sectors outside our own one being in the news for all the wrong reasons – and having procurement procedures called into question – it can put public tendering in the spotlight. However, I’ve always been proud of it in highways and transportation. We have set high standards when it comes to ethics, because procurement lies at the heart of our professionalism.”
Another thing that procurement professionals are rightly concerned with, says Johnstone, is learning lessons from elsewhere. “When individuals see project delivery problems, they should be thinking about how the procurement process might help prevent those contract management issues happening in future,” he reasons.
The main driver, when it comes to public procurement, is upholding the regulations and principles around it, says Johnstone. “Throughout my career in procurement, whether projects were publicly or privately financed, one thing that didn’t change were the basic principles of fairness and equal treatment for all tenders – along with transparency across the board,” he says.
Another driver, says the CIHT president, is understanding risk and the appropriate transfer of risk. “When preparing a tender, you can try and maximise the transfer of risk on a job,” he says, adding that understanding the implications of doing so is vital. Risk carries a price-tag and good tendering requires clients to understand the prevailing market to optimise the risk sharing between client and contractor.
There are challenges that stand in the way of progress, too, he warns. “Value for money is always sought by clients but the balance between price and quality for a particular tender will vary with the client’s assessment of their needs. Price is often of greater importance because of the current strained nature of the economy. Also, in these challenging times procurement officers have to be more mindful than ever of the financial standing of the companies that are tendering for business, to ensure the appointed supplier remains financially viable. We’ve also seen a lot of major contractors and consultants consolidate, which can bring issues such as conflicts of interest for the client.”
He also warns of a potential lack of competition in specialised sectors as a result of multiple acquisitions, which can end up with higher prices being paid. Clients need to play their part in issuing tenders that seek to maintain a healthily competitive marketplace, including opportunities for SMEs.
One of Johnstone's main aims in his presidency was getting out and meeting with members face-to-face. Recently, he had the chance to meet plenty at CIHT’s Young Professionals Summit. “As president, it is my job to inspire the younger generation – and I hope that I did that – but they absolutely inspired me too.
“From a procurement point of view, it is up to that generation to help make it more popular and talked about, because it is a fundamental part of the industry, which we should embrace,” believes Johnstone. “At Transport Scotland, I mentored some graduates – and I got them to get involved in the procurement process, under my supervision. It was an important topic for them to learn, even at the early stage in their career, since our profession delivers all services and solutions through some form of procurement. There might be a team of procurement specialists in large organisations, but the topic needs attention on all levels, otherwise it will be neglected.”
Johnstone says there are serious efforts to make procurement a bigger part of the conversation around climate action and the management of carbon. “When a tender is being prepared, there’s always a procurement strategy, part of which is called a sustainability test,” he explains. This seeks to maximise the sustainable procurement duty, looking at a whole range of factors such as Net Zero, Fair Work and Equality. In the procurement process, we would ask the tenders to show what practical steps they were already taking and, if they won the piece of work, what would they do. Carbon reduction emissions was one example where they would minimise the number of meetings where people had to travel in cars, or they would buy a fleet of electric vans to carry out inspections.”
However, Johnstone warns it’s a sub-optimal area, because contractors with innovative ideas are sometimes reluctant to put their ideas forward for fear of losing competitive advantage. “They don't feel there is a level playing field yet or that they get recognition for the investment they've made in the process. So, there are some barriers that are the subject of ongoing conversations.”
Johnstone believes there are many different reasons for recommending CIHT membership, depending on the age and experience of the individual. “For people starting out in highways and transportation, it’s all about getting qualifications and learning from others who have been in the industry. For those individuals who have gained the experience and maintained their CPD – and moved through the industry – it’s more about sharing what they know and taking advantage of opportunities to network. Then our most experienced senior members can lend their wisdom to help the CIHT influence government policies.”
However, Johnstone doesn’t think that exposure should be limited to experienced members. “I have an ambition of taking a young professional to meet top people in the DfT and to talk to them about climate change,” he reveals. “I’ve been energised by the views I’ve heard at the recent Emerging Professionals Summit and believe they would reinforce the case for accelerated action on decarbonising our transport system.”
Register for the CIHT Monthly Masterclass in Encouraging Effective Procurement on 15 December with speakers Sam Markey, Ecosystem Director for Place Leadership, Connected Places Catapult and Mahmood Sidiqi FCIHT GMICE, Senior Transport Consultant.
Renew your CIHT membership today to continue being a part of the CIHT community.
Words by John Challen, with Neil Johnstone
Join other savvy professionals just like you at CIHT. We are committed to fulfilling your professional development needs throughout your career
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