RLB: North East leads shift to outcome-based procurement
The latest procurement trends report from Rider Levett Bucknall (RLB UK), suggests the North East is leading the move towards ‘value-focused delivery’.
The sixth annual report from RLB reveals that more contractors are favouring early involvement and collaborative working, with two-stage tendering now matching single-stage approaches on 28 per cent of projects, rising to 65 per cent on schemes valued over £60 million.
Jason Brownlee, partner at RLB North East, said: “The market is clearly pivoting toward outcome-based procurement, with clients and contractors in the North East recognising that sustainable, long-term value depends on aligning procurement with measurable goals.
“This shift is reinforced by increased use of two-stage tendering, even as economic pressures persist.”
Framework procurement remains dominant in the region, particularly in the public sector.
Platforms such as Procure Partnerships and NEPO continue to see steady growth.
NEPO recently named 34 firms to its £1 billion infrastructure framework.
Contractors are showing a clear preference for early contractor involvement, reflecting a wider move towards outcome-based procurement.
This contrasts with the traditional cost-value approach and signals greater demand for shared input and collaboration.
RLB’s report also highlights a growing emphasis on sustainability within tenders.
Nearly one third (31 per cent) now set out defined sustainability targets, up from 23 per cent the previous year.
However, delivery remains inconsistent, with one in three projects failing to meet their stated goals.
Data capture and measurement also remain areas of concern.
Only 22 per cent of tenders clearly define data requirements, and 28 per cent include no requirements at all.
This ‘lack of clarity’ is limiting the industry’s ability to track and deliver on intended outcomes.
The report notes an uptick in collaborative procurement practices, with more than 40 per cent of contractors observing greater collaboration, and 25 per cent reporting increased willingness to share risk.
However, the rate of growth is slowing, suggesting the market is maturing and new behaviours are becoming embedded.
Contractors’ main concerns for the coming year centre on the impact of the Spending Review and Autumn Budget.
Supply chain resilience is a particular worry for larger firms. Big-ticket contracts are moving away from fixed price risk.
Smaller projects remain largely unchanged.
Projects over £100 million are now offering shorter fixed price periods—down by nine months compared to last year.
There has also been a 14 per cent rise in the use of fluctuation clauses.
Design and build contracts remain the most popular at 65 per cent.
Bespoke contract forms have reached 6 per cent— the highest level since RLB began tracking trends.
Modern Methods of Construction (MMC) are also gaining traction.
The average project now incorporates 24 per cent MMC, up 2 per cent from last year.
Barriers to adoption are now more economic in nature, rather than stemming from client or design team resistance.
Legislation is also shaping procurement behaviour.
Sixty-three per cent of contractors are unwilling to take on the regulatory risk associated with Gateway 3 approvals for Higher Risk Buildings.
Despite the sector’s appetite for change, RLB’s report warns that the industry may not yet be fully prepared for a wholesale shift to outcome-based procurement.
While there is broad support for the approach, there remains uncertainty about how and why it should be implemented.