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Is the tender tide turning for main contractors?

Binyamin Ali

The south coast boroughs of Lewes and Eastbourne may seem like unlikely sources of public procurement innovation. Yet something is stirring by the sea.

The two local authorities set up the Clear Futures framework last August alongside Aecom and Robertson Capital Partners, basing its new approach on Scotland’s Hub Programme.

Since the start of this year, Lewes and Eastbourne have been funnelling suitable capital works projects through the framework, which is managed by a 50:50 JV between Aecom and Robertson.

The pair’s fees are built into the total cost of capital works projects that go through the framework, which takes full responsibility for procurement and delivery.

Some 20 projects are currently in the framework’s pipeline, which features jobs worth between £2m and £30m.

Aecom and Robertson can also act as main contractor or operate in the supply chain of these projects, although neither are set to take a contracting role in any of the planned jobs at present.

What’s more, the framework has a PFI capacity built into it, giving both Aecom and Robertson the option to fund projects that take a DBFM (design, build, finance and maintain) approach.

Scotland has been using a similar model in its Hub Programme for eight years now. However, while the public sector clients for Hub JV companies are mostly fixed, a key difference with Clear Futures is that almost any public body can sign up to use it.

As a result, the potential pipeline of work that could come through the framework, as well as the returns Aecom and Robertson could make by managing, delivering and funding projects, are substantial.

CN has been tracking gradual shifts in the tier one business model for some time. As recently as yesterday, Damon Schunmann considered how technology increasingly promises to transform the role of main contractors.

Meanwhile this year’s CN100 revealed that the top 10 contractors are operating on an average margin of -0.9 per cent, down from -0.5 per cent in 2017.

Against this backdrop, you feel something has to change – and public procurement can be fundamental to the industry’s direction of travel.

Is Clear Futures a sign of how tier one business models are already changing?

If it is, you’ll want to keep your eye on the tide in Lewes and Eastbourne – look out tomorrow for my in-depth case study of what’s happening on the south coast.

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