Government review of procurement to cover construction

A government review of the way it applies EU procurement rules designed to allow it to give UK firms greater advantage on contracts, will cover construction, a business department spokesperson said this week.

The news came after a £1bn tender for a contract for Crossrail rolling stock and construction of a depot became the first to be delayed by the review. Crossrail announced it will be put back from later this year until early 2012.

The spokesperson said: “Philip Hammond, the transport secretary and Vince Cable wrote to the PM to highlight the issue of public procurement and how we should sustain a competitive supply base that meets the UK’s strategic needs within EU procurement rules.”

Government procurement does not currently take local economic factors such as jobs into account when awarding contracts, even though this would be permissible under European law.

The industry has welcomed the decision. Alasdair Reisner, director of external affairs at the Civil Engineering Contractors Association, said: “There is a concern that UK firms might be beaten to local work by firms from elsewhere in the EU as a result of a poorly structured procurement regime.