NFB condemns decision not to allow small builders to bid for contracts worth more than £1m
Small builders have said they will not work on contracts let through NHS Estates' Procure 21 system and have accused the health department of not listening to their views.

The move is a response to NHS Estates' refusal to raise the lower value threshold of contracts let under Procure 21 from £1m to £4m. This would have allowed small builders to bid for jobs worth up to £4m.

Speaking at the Winning Work with Central Government conference on Thursday, NHS Estates chief executive Kate Priestley confirmed that the department had listened to the requests of builders but decided to keep the lower threshold.

The National Federation of Builders had received a letter from NHS Estates last week stating that their proposals to change the threshold had been rejected.

Under the Procure 21 system, NHS Estates lets contracts worth between £1m and £20m to a small number of large contractors.

Speaking at the conference, which was organised by Building and sponsored by iScraper.com, Priestley said the £1m threshold was necessary to ensure that large contractors had enough work to make the system viable.

NHS Estates argues that this does not exclude smaller firms from the £3bn a year that it spends on construction as they will form part of the main contractors' integrated supply chains.

This claim was rejected by Malcolm Clarke, chairman of the NFB. He said: "They are claiming that small firms will work as subcontractors to major contractors, but SMEs won't work for major contractors. It is not viable because of the payment regimes."

He added that Procure 21 would fail without the backing of small builders, as main contractors lacked the skills and labour to carry out the work.

The NFB said it will continue the fight to get the threshold raised. Clarke said the federation was likely to press construction minister Nick Raynsford to step in.

He added: "To me it seems that there is a hidden agenda to push out smaller contractors. It is a classic example of government not listening and we are going to make a lot of noise now."

Barry Stephens, deputy chief executive of the NFB, said it would continue to press NHS Estates to raise the threshold to £4m.

NHS Estates will begin to put the Procure 21 system into practice this month when the first contract to be let will be advertised in the European Union's Official Journal.