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Liverpool council defends e-procurement

Liverpool City Council has defended its use of online procurement system The Chest after criticism from subcontractors.

Local firms told CN The Chest – introduced to increase the chances of small firms winning work – had led to more competition from large contractors.

But the council insisted construction companies were mistaken about the extent to which work was being awarded to large firms.

A spokesman said subcontractors’ complaints related to contracts awarded through the North West Construction Hub, and the council uses The Chest to procure all projects over £20,000.

He added: “My advice to smaller firms is to register for The Chest e-procurement system.”

John Maddock, managing director of construction firm Lockwoods Group, said the system had been pushing out smaller firms competing for tenders.

“The council hasn’t been restricting the number of tenderers to those projects on The Chest system,” he said.

“There have been 30 or 40 bidders for some contracts and prices have been driven down so far that there’s no sense in bidding.”

Another local source said: “The only ones that are being successful at the moment are those with a turnover of £10m-plus”.

He added: “Unless they do a banding of turnover, everybody will have to join a consortium.”

It has been suggested that Liverpool may move away from e-tendering following the criticism.

Minutes of a recent council adult health and social care committee stated: “LCC procurement are looking at the possibility of setting up a Merseyside-wide cluster procurement working group to consider common issues.

“Meetings have taken place with procurement teams from other local authorities, progress has been made, and further meetings will be taking place.”

But the council spokesman denied the council was looking at altering its procurement process, and said the report referred only to health services.


System used across the North-west

An efficiency agreement between local bodies that backed The Chest system expired in March this year.

The Chest was the preferred e-tendering portal for the North West Improvement and Efficiency Partnership, but the body closed on 31 March this year.

The procurement system was intended to increase access to contracts for regional firms and SMEs, involving local authorities in Cheshire, Cumbria, Greater Manchester, Lancashire and Merseyside.

Local authorities in the North-west spend £6bn to £6.5bn annually on procuring goods and services.

Meanwhile, procurement practices at Wirral Metropolitan Borough Council - one of five councils in Merseyside - have been the subject of controversy.

An Audit Commission report this month warned the council may have breached EU rules in the awarding of a highway and engineering services contract to Colas in 2008.

The report found that Wirral’s director of tech services David Green had met a Colas representative to discuss the contract in the pre-tendering phase, without declaring a personal relationship.

Mr Green was suspended in March while the council investigates.

There was no suggestion that Colas acted improperly.

 

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