Defence Estates considers cutting the number of regional construction and repair packages from 13 to as few as six.
Defence Estates, one of the UK's biggest clients, is considering shaking up its regional contractors' lists to create fewer, larger deals for winning firms.

The Ministry of Defence's estate will be divided into 13 regions under current plans. In each, a single prime contractor will carry out repair, maintenance and small capital works valued at between £100m and £300m.

But sources close to prime contracting said Defence Estates could halve that to as few as six regions.

Ted Pearson, the commercial director at Defence Estates, confirmed that it was was investigating proposals to create larger but fewer deals for this work, but refused to be drawn on the precise number.

He said: "From our point of view there is no decision but we are considering it in the light of developing experience and in the interests of providing our clients, the armed services, with an even better service.

"If we go down this route it will mean contracts are even larger and more valuable to the industry."

He said: "I wouldn't want to give the impression that it's cut and dried because we are in the very early stages of examining it."

Paul Lester, Balfour Beatty's managing director, welcomed the move. He said: "We see it as more positive than negative – and the larger the contracts the better."

Balfour Beatty will bid for the first of these one-stop shop regional deals in partnership with engineer Babcock. The firm is also talking to potential partners to bid for other regions. The £200-300m Scotland deal will go out to tender in the near future.

Pearson could not confirm the precise date but said it would be soon.

It is understood that a firm will be able to act as prime contractor in only one region but will be able to work in partnership in other regions.

Meanwhile, the Construction Confederation is to draw up a consultation document on how to put pressure on Defence Estates to bring prime contracting more into line with the partnering principles identified in Building Down Barriers. Building Down Barriers comprised two pilot schemes run by the MOD to identify ways of integrating the supply chain.

The move follows a workshop held by the confederation last week to identify and resolve the concerns contractors had about Defence Estates' prime contracting, and the similar NHS Estates initiative, Procure 21.

A total of 60 people, ranging from members of the National Federation of Builders to major contractors, were present at the meeting, which was described as fruitful by one attendee.

Pearson said: "The whole basis of prime contracting is built around collaborative working and working very closely with the prime contractor. Further down the supply chain, the model is designed to promote precisely the same sort of collaborative relationship. We want to establish long-term relations with reliable suppliers of quality products."