The axing of BSF last year was a bitter blow to the industry. However, the horizon is brighter than first perceptions might suggest.
A government appointed taskforce has been established with the aim of recommending a new system of procurement to replace the £55 billion programme (CN 9 Dec). And according to a source close to the Capital Review team, a private developer could theoretically halve the cost of schools projects, which could put all axed BSF schemes back on the table.
In any case, there is still work available within the education sector. The top 30 projects yet to appoint a main contractor are worth £2.4b, according to Glenigan, with universities particularly seeking to extend their premises. Around 59 per cent of cash allocated for education projects is coming from universities, but councils are also still working to deliver schools and academies, with 37 per cent of the top 30 projects being developed by the public sector.
Getting into the public sector
Within the public sector, price is an important part of winning an education contract for standard projects. Cardiff City Council procurement officer Alan Jones says “We always do a price and quality evaluation, and for a traditional project it’ll be weighted 80-20 in favour of price. However, that will change with higher value projects that will have extra features.”
City of Edinburgh Council category manager for construction Kenneth McKinnon agrees that price plays a role: “The policy for traditional build contracts is to focus on price, with the split maybe at the 60-40 point in favour of quality.”
He says that factors such as sustainability credentials and a good health and safety record are important, but that for larger projects attracting major contractors, it is possible to be confident that they will meet the standard. “Big contractors know even better than we do about sustainability and safety, and get it done.” Mr McKinnon adds that experience in the sector is also an important quality for a bidding contractor to have.
Mr Jones says sustainability is particularly important for high-value school projects, with the Welsh Assembly Government particularly pushing the sustainability agenda. Cardiff City Council is currently in the pre-planning stages of a £22 million high school. “We’ll probably be looking for a BREEAM Excellent rating,” says Mr Jones. “As a result, if the project goes to tender, we will be looking for contractors who’ve worked within the BREEAM restrictions.” He adds that the council also has a preference for main contractors who incorporate local firms into the supply chain.
Contractors tendering for public sector school projects should also be aware of changes to the OJEU procurement process. All schools developed by the public sector worth over £3.9m have to have a contract notice placed in OJEU, and the relaxations applied last year regarding timescales have been extended into 2011, meaning speed is of the essence for councils eager to start building. Mr McKinnon says: “Usually with OJEU, the procurement process will take five to six months. The relaxation of the rules lets you use an accelerated procedure which makes quite a difference to the length of the process, and means you can shorten some of the stages.” He says the ability to shorten procurement times to three or four months is very attractive. “If it’s a restricted pre-selection process, you have to wait six weeks for notes of interest. That can be shortened to two weeks,” he says.
As a result, contractors seeking to plug the gaps created by the axing of BSF need to move quickly – and make sure they focus on cutting costs for some potential clients.