"There is widespread cowardice - or perhaps laziness - among government clients concerning construction projects", writes Erik Hellqvist, CEO of the Swedish Building Centre.

There is widespread cowardice - or perhaps laziness - among government clients concerning construction projects. The vast majority procure contractors and suppliers solely on price. This is done with reference to the Swedish Public Procurement Act, (LOU).

But focus solely on the production price rarely leads to high quality and low costs during the occupation phase. LOU does not force the public purchasers to work by price alone. It is perfectly possible to pay attention to the end use and occupant perspective whilst still working within the Act.

It is these areas our public construction clients should pay attention to. It is not their duty to drive down costs in the short term, without regard to future consequences. Their mission is to offer good societal benefits at low cost in the long term.

State and local governments talk a lot about creating an economically, ecologically and socially sustainable society. But by selectively using LOU as a false argument, public construction clients are working by restrictive quarterly-economy principles.

Fortunately, there are exceptions. The municipal housing company Uppsalahem has developed its own model for construction procurement. This means that they work an analysis of life cycle cost into the contract for each construction project.
It requires more time and effort in the evaluation stage and also in the design of the tender schedule. Uppsalahem uses partnering to form synergies with its contractors and suppliers.

They interview all who have submitted offers. Then the interviews are assessed and given points according to different parameters, including organisation, experience and approach. The goal is to create a long-term, positive and effective cooperation.

Uppsalahem believes that its model provides better housing and lower costs from a forward thinking total-life-cycle perspective.
Another interesting model was developed by Micasa – a property company which owns and manages the City of Stockholm's Social Care properties. The company's new model for the procurement of government services is based on quality instead of price.

Micasa simply lets the bidders know how much money it intends to pay for various services. The bidders may then specify how to perform them, and are evaluated against a number of quality aspects.

Uppsalahem and Micasa are good examples how public procurement can work in the construction and property sector. I hope they can inspire more public construction clients to begin procuring with a view to the long-term and with low costs and good societal benefits as guiding principles.

Erik Hellqvist
CEO, Swedish Building Centre (Svensk Byggtjänst)