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Defence contracts spark flurry of bids

Evidence is emerging of an increasingly fierce fight for public sector work after the Ministry of Defence’s next generation of construction contracts attracted a flood of interest from the industry.

A spokesman for the Defence Infrastructure Organisation - the new umbrella body created to manage the defence estate - told Construction News 53 firms had entered the running for the £1.5bn single housing contract.

This comes after 115 firms submitted expressions of interest for the first of the regional prime capital frameworks, covering the east of England and East Midlands.

Civil Engineering Contractors Association director of external affairs Alasdair Reisner said the jobs were coming at a time when work elsewhere was “relatively sparse”. He also said the MoD was a well regarded client that would offer attractive long-term workloads for a public sector client.

As part of the procurement process, the DIO is staging industry days for all firms that submit expressions of interest.

ISG Pearce business development director Andy Taylor said he believed this had helped maximise interest as smaller specialist firms were submitting EOIs so they could network with larger players and form partnerships.

He agreed the current market conditions for public sector contractors ensured firms bid for “anything and everything”. The regional SME focus of the tendering process had helped attract even more firms, he said.

“Everyone sees it as a vital source of work but also because these contracts are geared towards SMEs and they are the guys that are struggling at the moment, there is a lot of interest.”

Speaking at the official launch of the DIO, deputy chief executive David Olney played down concerns that insufficient work would come through each framework to support all the firms appointed.

Acting chief executive Andrew Manley said the DIO would remain a significant player despite the cuts as troops returned from Germany and Afghanistan.

He said: “For the UK construction industry we are likely to be spending more of our money here than [overseas] now.

“So if I was engaging with industry I would say we are going to be a very significant spender of money in this country and we certainly aren’t short of offers for people to come and work with us.”

The regional frameworks are designed to provide more SME involvement by requiring contractors to demonstrate a strong history of work in the region.

The first industry day held was for the FM-oriented regional prime contract in Scotland and Northern Ireland and attracted 85 companies including Carillion, Miller, Tarmac and Kier.

The first regional core works industry day was held for bidders on the East of England framework. Some 110 firms attended the event on 29 March at RAF Wyton near Huntingdon, including Apollo, Bam, Costain, Lend Lease, Mansell and Clegg Construction.

The industry day for the national housing prime contract will also be held at RAF Wyton on 28 April. The 53 lead contractors that have submitted EOIs will be joined by 63 companies that registered as supply chain partners.

 

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