Carillion is reducing its supplier base by up to 80 per cent, it confirmed this morning.
The contractor said it had embarked on a process to slash the number of suppliers on its system from 25,000 to about 5,000.
Sub-contractors are being rated on a range of factors including price, health and safety, reliability and ethics. Successful firms are being notified that they will be eligible for increased workloads, while unsuccessful firms are being told there will be no work for them in the foreseeable future.
Carillion is using an electronic auction system to eliminate some suppliers, and is considering extending the system to cover construction sub-contractors.
A Carillion spokesman told Construction News: “Every time someone at Carillion wants to buy something they create a supplier account, and there are 25,000 on the system. We are looking for best-value services and to build long-term relationships with fewer suppliers.”
He added: “Those that are getting on the list are ecstatic. They could be getting three or four times the volume of work. It is a hugely complicated process that will continue into next year.”