Kvaerner, Balfour Beatty and Citex form alliances to scoop work in new multibillion-pound market.
Top contractors and consultants are teaming up to create powerful new alliances to bid for billions of pounds of prime contracting work.

Building has learned of at least three new consortia formed to bid for prime contracting, the procurement method being pioneered by the Ministry of Defence that calls for single-point responsibility for the construction and costs of a building for up to 30 years. The consortia are:

  • an alliance between Kvaerner and project manager Symonds
  • a team led by QS and project manager Citex, also likely to include engineer Thorburn Colquhoun, contractors Thomas Vale and Pearce Construction and architects Percy Thomas Partnership and Temple-Cox Nicholls
  • an alliance between Balfour Beatty Construction, Balfour Beatty’s project management arm Heery and engineer White Young Green.

    In addition, other companies have been forming strategies and groups to focus on prime contracting:

  • Kier has set up Kier Defence, a new company that is now interviewing for architectural structural and civil engineering partners
  • Tarmac is grouping its building, civils, M&E and private finance teams, as well as interviewing for outside help
  • Mansell, which carries out about £80m of MOD work a year, is interviewing for partners all over the UK with the aim of allying itself with local experts on MOD work
  • Shepherd Construction is drawing up a list of architects, and structural and consulting engineers to work with the firm on prime contracting deals. There will be three external firms for each discipline, as well as Shepherd Construction’s interior design team.
The Kvaerner/Symonds venture will initially have a core staff of four who will focus on developing the supply chain, value management and risk management.

Andy Sturgess, managing director of Kvaerner’s building company, said: “We felt there was an advantage in forming an alliance with a consultant because there are things that we are good at and things that they are good at.” Symonds director Tony Harden said he was impressed with Kvaerner’s record in rationalising the supply chain and the firm’s work on PFI projects. He also said he believes that prime contracting is suitable for firms other than major contractors.

“We do not see this as a role for consultants to be subservient players. We are equals,” he stressed.

Harden will head up the consortium for Symonds, while Willie Smillie, a director of Kvaerner Construction, will lead Kvaerner’s side of the alliance.

The consortium’s first foray into prime contracting will be a bid for the MOD’s £30m Faslane jetty scheme in Scotland.

Citex director Tony Bevan declined to name the firms that it is teaming up with, but said he was convinced that strong consultants were well-placed to be prime contractors.

He said US-backed Citex had drawn up a business plan that will see it achieving £25m-50m of contracting turnover.

A new division, possibly called Citex Prime, will also bid for prime contracting work from other government departments.

The prime contracting route and other “innovative” forms of procurement received strong backing from the Treasury and other departments at a major conference this week.