Procurement simplification 'remains a pipe dream'

Bidding for public sector construction work remains time consuming and costly despite efforts to simplify the process, with more than 40% of SMEs spending over four weeks completing pre-qualification questionnaires, a new report from the National Federation of Builders (NFB) has found.

The NFB’s Procurement Report 2012 (attached, right) found that a major issue for SMEs firms bidding for public sector construction work was the “time, cost and other resources required to complete the pre-qualification process”.

The report, based on a survey of 100 contractors between February and April 2012, found that 62% of respondent reported difficulties with the pre-qualification process - up from 49% in 2010 when the survey was last run.

It also found that 40% of respondents spent at least 4 weeks each year completing pre-qualification questionnaires (PQQs) - up from 20% in 2010 - while 4% of respondents were spending over £30,000 annually on the PQQ process.

The NFB said that although pre-qualification was supposed to simplify the procurement process for clients and contractors, that “still appears to be a pipe dream”.

The survey also found that the use of frameworks was failing to deliver greater simplification. The report said: “As with pre-qualification, the promise of frameworks was one of simplification for clients as well as cost savings.

“Shrinking in-house procurement departments at local authorities as well as the promise of transferred risk and reduced costs appear to working in the favour of local authorities and national contractors.

“The unintended consequence of this shift towards frameworks has been that SMEs that could previously bid for contracts now find similar contracts priced out of their reach, bundled as parts of larger programme of works.”

It said that contractors were responding by becoming a part of a larger contractor’s supply chain, forming a consortium to bid for work or exploring work away from frameworks.

It said 90% of respondents that were bidding for public sector work were now doing so outside frameworks, with 79% saying they do not undertake work as a subcontractor on a framework.