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Gap between ‘Tier 1’ and rest of the market is narrowing

The gap between the quality of bids submitted by smaller and larger contractors is closing, the Framework Director of a the Procure Partnerships frameworks says. Robbie Blackhurst, Framework Director, told the Construction Frameworks Conference panel on best value in procurement that the organisation had set out to encourage greater participation by SMEs when setting up its framework.

He said the when launching the Procure North West framework has spent four months assessing best practice from eight other frameworks in order to ensure that it would offer something different.

Blackhurst said Procure North West had grouped bids into four value bands, and that when tender documents went out contractors could bid for no more than two value bands.

The bands had to be related so that contractors could only bid in the top, middle or bottom two of the bands: ‘’We didn’t want to have eight Tier 1s in each value bands predicated on the fact that they could write a better bid because they have a dedicated resource.’’

The strategy has steered Tier 1 contractors towards higher value projects, leaving space for smaller contractors, whilst he said he was ‘pleasantly surprised’ by the quality of bids that Procure North West had received.

Expressing confident in the bidders being able to deliver he said: ‘’The market has really moved on and the quality of bids coming in from all levels is really close.’’ But he said that there is ‘no problem’ with bidders undercutting each other if the framework has shown through its due diligence process that bids are profitable and sustainable over the bidding period.

Chris Blythe, Chief Executive of the Chartered Institute of Builders, however said that the Grenfell tower disaster illustrated that corners has been cut on quality, saying: ‘’If best value and life time costs were appropriate we wouldn’t be looking at Government spending £350m retrofitting classing. We’ve got into a low-cost situation because that was the metric at the time.’’

He praised the NHS P22 framework for providing suppliers with information by holding open days before bids that been published which ‘allows contractors to make informed decisions about whether to bid or not’.

Dave Pennington, Service Manager for Property Development at Lincolnshire County Council, said the authority had set up its own framework after having been at the receiving end of a court settlement. He said: ‘’Added social value is not the driver for using frameworks, it’s about risk mitigation and smoother delivery on site.’’