£500m-a-year client holds conference to outline plans to senior contractor executives.
BT has told leading contractors that it wants to cut its construction supplier base radically to come into line with the recommendations of the Egan report.

The £500m-a-year client outlined its strategy at a meeting with senior executives from about 40 contractors.

Amec, Laing, Bovis, Kier, Interior and Mansell were among the firms represented at the meeting in the Forest of Arden on 17-18 February.

After the conference, there was speculation among delegates that BT planned to cut its construction supplier base from 500 to about 10, but a BT source denied this.

Although the source confirmed that BT wants to reduce its suppliers to reap the benefits of repeat business, the client still needs to work with contractors that can offer varied services.

These can range from minor refurbishments, such as small contracts for asbestos removal, to major new-build projects worth more than £30m. BT sources said contractors could team up in consortia to provide it with a range of services.

The firm used the BT Construction Suppliers Conference to explain that it wants to improve contractors’ quality of delivery, speed of response and continuity of service.

It believes that implementing the Egan recommendations is the best way to do this and asked contractors for views on how to incorporate them within the restrictions that BT faces.

For example, it must advertise all its work in the European Union’s Official Journal, although it can select contractors to work for it on a repeat basis instead of having to re-advertise. BT expects to produce a detailed strategy within a year.

Delegates applauded BT’s philosophy but warned that it must not repeat the mistakes of other clients that have moved to smaller lists of suppliers.

Another client, BAA, has annoyed some contractors and consultants over the past four years by awarding framework agreements and then using them less than they expected because it overestimated the amount of work it had.

One supplier said BT’s workload could be more predictable. It is making headway into the booming mobile phone market and is planning a huge national refurbishment programme for buildings it intends to lease out to other occupiers.