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Scottish Water to increase supply chain contractors

The number of contractors on Scottish Water’s next four-year framework is set to increase as the firm changes its procurement strategy to make sure it has the resources for its huge spending programme

In the 2010-2014 spending period Scottish Water expects to be splashing out between £450 million and £500 million a year.

It is looking to increase its contractors from its existing nine so it has more companies available to deliver work. It is also changing how it tenders work to offer contractors steadier workloads.

The firm’s general manager for capital investments Mark McEwen told Construction News: “We have no massive jobs coming up so we’re trying to work ahead to avoid boom and bust.

“In Scotland we’re being badly affected by these huge infrastructure projects that are going on, for example the Commonwealth Games in Glasgow and the M74 extension.

“It makes it difficult for contractors to bring in workers for the short-term if there are these other jobs where they’re guaranteed work for four or five years.

“By working more closely with contractors we want to deliver projects more effectively.”

Contractors will be split into three groups - large design and build projects, infrastructure and regional and smaller works - from 2010 to 2014.

Head of capital procurement at Scottish Water Lorna McGregor said: “We’re expecting a minimum of seven contractors in each group, but in reality there will be a lot of crossover. So far we’ve had about 25 firms approach us across the groups.”

All the big names from its current framework, including Balfour Beatty, Barhale, Farrans, Rok, Interserve and Morrison, are thought to be bidding.

At the moment Scottish Water is working together with the Water Industry Commission for Scotland and the Scottish Environment Protection Agency to agree its capital projects programme for the next period.

But the utilities firm has decided rather than letting out each job separately, projects will be divided into clusters of work that reflect the three groupings.

Ms McGregor said: “These will be subject to mini-competitions within each framework and we hope that because they’re grouped we’ll get better contract management and a smoother profile of work.”

Whole life costing

In the next spending period Scottish Water will introduce whole life costing for its projects in terms of carbon.

Mr McEwen explained: “We’ve been developing carbon pricing for our construction operating costs, which will be included for infrastructure projects from 2010 in our estimating programmes.”

“It’s not clear yet how it will affect our investment decisions going forward.”

Scottish Water will also place more emphasis on the efficiency and green-ratings of the components it uses in its structures.

Mr McEwen said that this is included in its supply chain selection criteria.