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National Federation of Builders demands action on "onerous" procurement

The bidding process for public sector construction projects is “onerous, costly and inefficient” and preventing small and medium-sized businesses from competing for work, the National Federation of Builders (NFB) has claimed.

SME firms were “feeling excluded from an ever more competitive bidding process for a reduced number of contracts”, particularly following the demise of schemes such as Building Schools for the Future, the NFB argued.

The Federation called on the government to encourage the public sector to use the common set of pre-qualification questions, PAS91. This will simplify the process and give fair access to a shrinking volume of work for companies of all sizes, it claimed.

In its report, Procurement – the roadblocks to success, the Federation also called on the government to:

  • cut the costs of procurement, rather than cutting back on projects
  • ensure, through contract conditions, that everyone in the supply chain benefits from prompt payment
  • make sure that any streamlined procurement processes that come out of the Office for Government Commerce’s review of central government are pushed down to and adopted at local government level
  • require local government to report annually on their spend with SMEs.

Research conducted for the report found that 49% of respondents cited difficulties with tendering at the pre-qualification stage, and 79% reported worse success rates compared to 2007. SMEs are also spending significant money and resources on procurement exercises, with almost a quarter spending more than four weeks a year on form filling and some respondents pay more than £30,000 annually in registration costs.

Julia Evans, NFB chief executive, insisted that the construction industry was key to the economic recovery.

She added: “Small and medium-sized businesses cover a large range of companies and they are not restricted to the image that may come to mind of a family run business or a man and a van. Many of these have built themselves into formidable enterprises turning over many millions of pounds, yet are still hampered when attempting to win work.”