SMEs disappointed by regional framework decision could benefit from ‘mixed’ procurement approach


The Education Funding Agency is likely to route work from the £2bn second phase of the Priority Schools Building Programme via local authorities in a move that may appease SME contractors that have missed out on the body’s new £5bn regional framework.

It emerged last week that just a handful of SMEs had won a place on its £5bn regional framework that it was originally anticipated would benefit SME firms.

The Education Funding Agency (EFA) has previously indicated it is open to the possibility of procuring work through local authorities in the second phase of the Priority Schools Building Programme (PSBP2), rather than through its own contractors’ frameworks.

However, it is now understood that the most likely outcome is that the EFA will opt for a “mixed economy” approach: some batches will be procured using the regional framework, and others will be given to local authorities.

This week EFA capital director Mike Green said the body hadn’t yet decided how it was going to procure the programme, and wouldn’t make a decision until the exact make-up of projects had been determined.

Speaking last week Green said he was “giving serious thought about” whether to deliver the programme direct or via councils. “We could give them out as individual buildings to very small regional contractors, or we could batch them, or we could do a combination of the two,” he said.

The move follows grave concerns from regional contractors after the EFA this week allocated a tiny proportion of the 37 places on its £5bn regional framework to genuine regional contractors. Sixteen contractors made it on to the regional framework, with all but four recognised national businesses.

Kier and Bam were the main winners, both winning a place on all six regional lots.

Preston-based Conlon, with a turnover of £35.4m, was the smallest firm to win a place on the framework, with Derby-based GF Tomlinson the only other firm with turnover beneath £100m. However, sixteen other regional contractors who were shortlisted for the framework did not make the final cut, despite the fact the government has committed to giving 25% of government work to SMEs by 2015.

The chief executive of one shortlisted regional contractor who failed to make the final framework said the outcome was “totally ridiculous”. “It defeats the whole object of the exercise,” he said,

Brian Berry, chief executive of the Federation of Master Builders (FMB), said: “Questions need to be asked about the design of the framework and why so few smaller contractors were successful.”

An EFA spokesman said: “The EFA encourages the involvement of SMEs in its projects and programmes.  Indeed, significant effort was focused on market engagement in the early stages of the development of this framework, and many SMEs attended supplier days and registered their interest.

“Many of the successful bidders do work in the regions. The procurement for the regional framework was undertaken in a fair and transparent manner, and in accordance with the Public Contracts Regulations 2006.”

Meanwhile, as Building revealed last week,the EFA has responded to increasing construction prices by raising the benchmark construction rates on its national framework, with Green this week saying the increase will amount to “approximately 5%”. This will impact upon work being procured under PSBP phase one.

Regional firms that didn’t make the cut:

  • Clugston Construction
  • Robertson Group
  • SET Construction Projects
  • Clegg Construction
  • Lindum Group
  • R G Carter Construction
  • Built Offsite
  • Geoffrey Osborne
  • Lakehouse 
  • T&B (Contractors)
  • Midas Group
  • E G Carter & Company
  • Speller Metcalfe
  • Stepnell
  • Cruden Group
  • John Turner Construction Group