National Federation of Builders wants small companies to be able to bid for projects under £4m.
The National Federation of Builders has this week written to the NHS Estates urging it to reform its procurement rules to help more small firms compete for work.

NHS rules say that projects worth more than £1m must be let under the Procure 21 initiative. This means they are bundled into large contracts that can be carried out only by a few preferred contractors.

The NFB is pressing for the threshold at which the bundling takes place to be raised to £4m, giving more scope for small and medium-sized firms.

The NFB issued its call after the first meeting of its working group on prime contracting last Friday. This group was set up to identify how changes to government procurement methods will affect small and medium-sized contractors.

NFB deputy chief executive Barry Stephens said: “What we are looking to do is get the threshold that brings Procure 21 into operation raised. If that is secured, then traditional work will be continued for the smaller builder.”

Malcolm Clarke, chairman of the NFB, said the move to create less adversarial forms of contract was supported by the NFB, but he wanted to ensure that the terms and conditions did not work against the interests of small to medium-sized contractor.

He said: “There has to be a balance for our members who form the backbone of our industry. These builders need the small contracts to sustain themselves and let them train their staff.”

The Ministry of Defence’s property arm, Defence Estates, has also introduced prime contracting.

The NFB working group is examining the terms and conditions of the prime contract, and the federation may write to Defence Estates next month to ask for a meeting to air its concerns.

The prime contract has already attracted the criticism that it places too much risk on the prime contractor.

The NFB wants to make sure the contract complies with the principles of Rethinking Construction, Sir John Egan’s 1998 report.

Clarke said: “We are to look at the details of the contract to understand what the pitfalls are. There is a massive opportunity here to move the industry forward in a positive way.”