SME building companies slam local authority procurement processes

Small and medium-sized construction firms believe that they are winning less work because of changes in public sector procurement and a failure by councils to advertise their tenders properly, research by the National Federation of Builders (NFB) has claimed.

A survey of SME contractors, conducted by the NFB, found that more than a third of respondent businesses (36%) had been less successful at winning public sector tenders over the last two years.

Publicly funded work, as a percentage of each firm’s turnover, had fallen 32% over the last five years, it also suggested.

More than half of respondents blamed changes in public sector procurement practices for this decline.

Administrative burdens and the introduction of procurement frameworks – where a local authority or group of public sector bodies ring fence contracts for a small group of successful bidders – were identified as major barriers. The demands of the pre-qualification stage were felt to weigh particularly heavily on SME contractors, who are unable to dedicate the resource to this that their larger rivals can.

One fifth (16%) claimed local authorities and other publicly funded bodies failed to advertise their tenders properly.

Many respondents said the amount of work they handled in the housing and education fields had fallen over the last two years, despite the government’s heavy investment in these areas.

The NFB said the findings were “unacceptable” in light of the government “apparently championing the ‘small is beautiful’ philosophy”.

Julia Evans, its chief executive, said: “Despite all the rhetoric from politicians and the development of policies as embodied in the Glover Report, it is actually harder for small and medium-sized contractors to win work than it was in 2007.

“What concerns us most is that, at a time when private sector development and house building remains in the doldrums, smaller contractors are being shut out from what little available work there is.”