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Carillion's BT job hit by a lack of bidders

CARILLION'S £500 million facilities management deal with BT is in crisis after being hit by contract procurement difficulties.

The five-year project Jaguar contract, won by a consortium headed by Carillion in May, is believed to have failed to attract enough interest from M&E contractors, which have been put off by a demand to stump up cash to take part in the scheme.

Documents seen by Construction News reveal that Carillion is asking firms for a payment of between £400,000 and £600,000 to become the lead supplier, called a Regional Service Provider (RSP), in each of the eight regions.

About half of the cash is intended to pay for start-up costs after a successful firm has been granted an RSP franchise licensed by Carillion. It will then be responsible for appointing subcontractors and delivering a facilities management service to all BT buildings in the region.

The appointment of the first RSP was due to be announced this month, followed by a national roll-out soon after.

A source at one leading M&E firm said: 'We have heard nothing since May about how the project is going and the situation has become worrying.

'We have heard there are a number of problems. One of them is finding enough of the right sort of companies to become lead partners within the RSP.

'We also understand that Carillion is facing difficulties implementing the project nationwide because of the size of the deal.'

Another source said: 'When we saw the documents we were shocked to see how Carillion had decided to procure the work.

'We decided not to bid for the lead partner role in one of the Regional Service Providers because of the amount of money being asked for.

'I would be surprised if many subcontractors could put that kind of money up front.'

A Carillion spokesman said financial close had still to be reached on the deal and the contractors were still at the preferred bidder stage.

A company statement said: 'We are not aware of any problems and are pushing ahead as planned.'

A BT spokesman said the scheme was still running to schedule.

Carillion, which is in a consortium with Haden Building Management and Reliance Integrated Services, was announced as preferred supplier in May after beating off a challenge from Amec.