SME drive ‘will not apply to construction’

Two major contractors will not put all their government subcontracts out to public tender despite an announcement by Cabinet Office minister Francis Maude suggesting the opposite.

Maude last week used a pledge by nine businesses, including construction firms Balfour Beatty and Amey, to publish their public sector subcontracting opportunities on the government’s Contracts Finder portal, as the centrepiece of a drive to double the £3bn of government work currently going to small businesses.

However, Balfour Beatty, which does £3.4bn of UK construction work, said it would only publish subcontracts on one specific job - the £10m fit-out of the Scottish Crime Campus, on which it was a condition of the contract.

Even then, Balfour said it would expect its existing supply chain “to be aware of the opportunities and have registered an interest on the portal”.

Amey said it would use Contracts Finder only on a case-by-case basis.

Small business leaders called on the government to ensure contractors obeyed the “spirit” as well as the word of the announcement.

John Walker, national chairman of the Federation of Small Businesses, said: “We want to see the government ensure that its major contractors begin to put all of their government subcontracting opportunities on the portal.”

The criticism came amid concern from construction firms that the online tendering of subcontracting work could run counter to the government’s Construction Strategy, which calls for supply chain integration to improve efficiency and innovation on government building projects.

The drive to include SMEs just doesn’t fit with the Construction Strategy

David Mathieson, T&T

Paul Morrell, the government’s chief construction adviser, said it was “quite clear” that the greater use of open tendering detailed in Maude’s announcement “will not apply to construction”.

He said: “There will always be a need to refresh [supplier] lists, and there will be some enquiries, at main and subcontract level, whose scale, location or nature make it appropriate to look beyond incumbent businesses.

“The intention then is that these open enquiries will be advertised through Contracts Finder.

“It is up to the contractors themselves as to how they make use of Contracts Finder.”

David Mathieson, director at consultant Turner & Townsend, said: “The drive to include SMEs just doesn’t fit with the agenda in the Construction Strategy. If you’re driving for an integrated agenda, it’s not very practical to publish things for open tender.”