Rethink procurement to help SMEs, says Construction Alliance NorthEast

Construction Alliance Northeast (CAN) has published a Construction Charter calling for reform of public procurement to give regional SMEs more chance of competing for contracts in the open market.

CAN was officially launched a year ago and represents over 500 regional SMEs in construction in the north east. Its charter sets out a six point plan for public sector procurement reform, highlighting the need for a greater focus in tender documentation on increasing participation from local contractors.

According to CAN, tightly drawn selection criteria have excluded SMEs by being focused on high turnover and a track record of similar contract framework experience. Commenting on the development of the charter, CAN chief executive Jeff Alexander said:

“During the recession many regional construction businesses were badly affected by the lack of private sector development.  At the same time, the shift in public sector procurement practice resulted in national and large regional framework agreements for publicly funded projects and many of the region’s long established smaller and medium sized construction firms as well as tier one consultants were locked out.  Some went out of business. With the new Construction Charter we have developed, we hope to ensure this situation does not arise again.

“The companies CAN represents have a combined turnover of some £3 billion and employ in excess of 10,000 people. Between them they are in a prime position to make a significant contribution to regional GDP.  Given the recent forecast for construction output and the opportunities generated by the UK leaving the EU, there is a chance for rules on public procurement strategy to be urgently reviewed so that there is more of a level playing field for regional companies.”

One of the biggest opportunities for north east construction SMEs comes from the North East Procurement Organisation’s (NEPO) Building Construction Framework and its related supply chain, which is due to be re-tendered in May 2017. According to CAN, a new construction framework is being developed by NEPO to reflect more intelligent procurement practice, with greater input from a wide range of regional companies.

NEPO’s regional category specialist for construction, Michael Curtis, said:  “We have undertaken market consultation to engage with the supply base.  This has been invaluable and as a result, we will simplify evaluation criteria in order to open up the opportunity to regional firms. This should provide greater opportunity to SMEs who obviously play a key role in shaping the economy in the North East.”

Mark Thompson is managing director of Ryder Architecture and a board member of the North East Local Enterprise Partnership. He said:

“The North East LEP is fully committed to supporting the development of a multidisciplinary construction strategy for the region, which should support CAN’s Construction Charter at a regional level and look at all areas of construction-related skills. The North East Strategic Economic Plan (SEP) highlights the importance of infrastructure, new homes and work space as key drivers for the North East economy. A cohesive approach to construction is fundamental to achieving the SEP’s targets of creating 100,000 more and better jobs for the region by 2024.”