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Firms struggle to justify bidding for BSF jobs

A number of firms have voiced complaints about the cost and time involved in bidding for Building Schools for the Future jobs, despite attempts to streamline the process.

Mouchel said in a trading statement last week that it would review bidding for any more BSF jobs following concerns about the soaring procurement costs.

The consultant said it would “review its approach” to the £45 billion BSF programme given the “lengthy and costly procurement model, and the fact the firm did not proceed beyond the last two in Southwark”.

Skanska is also lamenting the cost after spending £5 million on a failed bid for the £600 million first phase of Kent’s BSF programme. The sum is thought to be by far the largest amount spent on a losing BSF bid, with sources blaming the bureaucratic bidding process.

Rok’s finance director Ashley Martin told Construction News the firm has never applied for work on the BSF programme because of the cost involved.

Meanwhile, Willmott Dixon said that while there will always be a cost in bidding for work, in the recessionary environment it is difficult to justify a multi-million-pound bill when every cost is being closely scrutinised.

BSF chiefs said that as part of their procurement review earlier this year the average cost of bidding for work will be reduced from about £3 million to just over £1 million.

The changes, which should result in bid cost savings of about £250 million across the whole programme, will apply to projects in Wave 5 and onwards.

The changes will also see the procurement process reduced from the current 82-week model down to 75 weeks with two lead bidders selected earlier in the process, after 29 weeks rather than 44 weeks in the current process.

A spokeswoman for Partnerships for Schools said: “The deselection of bidders sooner in the process, and the reduction in the number of sample schemes requiring design work should lead to an overall reduction in bid costs.

“The amount it costs to bid will vary, but the figures in the procurement review show it is likely to be more than £1 million.

“In the old procurement process it was perhaps somewhere in the region of £3m for design, commercial and bid management costs. It is a commercial decision to be taken by individual companies regarding their intention to bid for BSF projects.

“But we can report that market interest in BSF schemes remains buoyant as the programme gathers momentum, with further financial closes due shortly and an update in early 2009 regarding the entry of Waves 7 to 15 to the programme.”