Balfour and Amey sign up to government's SMEs push

Contractors Balfour Beatty and Amey are to bypass their existing supply chains to welcome all bids on any UK government work.

The contractors are amongst nine firms who have today signed up to a commitment with government to publish their subcontracting opportunities for government work on the government’s Contracts Finder website.

The commitments are part of a series of further measures announced by cabinet office minister Francis Maude today designed to help small and medium-sized businesses (SMEs). He said the government was on track to double the £3bn of government work undertaken by them before the end of the financial year, but wanted to go further.

The government said putting subcontracting work on the Contract Finder website would give SMEs more visibility than ever before on the government subcontracting work available.

However, it is not clear how the policy, which could see existing supply chain agreements bypassed on public work, fits with the agenda of the government’s wider Construction Strategy to integrate main contractors and their supply chains.

Other commitments include the wider roll-out of “project bank accounts” from the construction sector to other areas of government business – arrangements where money for a project is paid by the client into a separate account which subcontractors and main contractors can claim simultaneously.

In 2011/2 just £500m of the £230 billion of goods and services brought are set to have been paid for through a project bank account, but Maude said the government is now committed to increasing this to £2bn next year and £4bn in 2013/4.

Francis Maude said: “We said we wanted to improve things for smaller businesses and today we have shown that the measures we introduced a year ago are making a difference.

“Doubling the amount of business going to these companies is no small feat but we will now go further. We are determined to shake up public buying so radically that there is no turning back to old days of SMEs being shut out.”

Chief construction advisor, Paul Morrell, said: “Construction has lead the way on innovative solutions like Project Bank Accounts, addressing the number one problem for companies operating in the supply chain - secure and timely payment, and the Government is now looking to extend this kind of measure to other sectors.

“While in some areas we are leading the way, in others we face unique circumstances. The Government is clear that while initiatives such as limiting contract size will deliver great benefit in IT, for example, it is working together to unlock the potential in the supply chain that will deliver the greatest benefit in our industry. That’s why supply chain integration runs right through the construction strategy.”

The announcement was welcomed by the Association for Consultancy and Engineering, which said there needed to be a change to the “culture of late payment”.

An ACE spokesperson said: “Late payment creates cash flow challenges, particularly for smaller businesses.  At a time when the UK needs its business community to be operating at maximum potential, late payment is a barrier to growth.

“It is a key aim of ACE to work with clients to ensure that bills due are paid on time and in full.  We look forward to working with all parties to deliver significant progress on this vital issue.”

The full list of firms signed up to publish all government subcontracting opportunities are: Hewlett Packard, Airwave, Amey, Balfour Beatty, CapGemini, Capita, Level 3, Logica and Serco.

Opportunities will be published at: http://www.contractsfinder.businesslink.gov.uk/