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Contractors fret that college procurement will return to the drawing board

Contractors fear that colleges will return to the procurement drawing board after being forced to drastically re-scope their construction projects.

Learning and Skills Council chief executive Geoff Russell wrote to all college principals earlier this month asking them to radically reduce the cost of their plans.

The body is keen to rescue as many of the 71 stalled projects as possible by spreading its emergency funding as widely as possible. But this means that rescued schemes will have to make do with less expensive projects, which could mean substantially altered plans.

The worry for contractors is that colleges will then be required to put the proposals back into OJEU under European law.

This would be a blow to contractors that have been trying to keep site teams together to work on college jobs they have won but that have not received funding.

UK Contractors Group director Stephen Ratcliffe said: “My fear is that if the colleges start re-scoping their projects then they might have to take them back out to tender.

“The LSC has assured us that it will try to keep project teams together as far as they can within European law. But it may become inevitable that jobs are re-tendered, and we are not sure that has been fully thought through.”

Chancellor Alistair Darling pledged £300 million in his April Budget to get college projects underway this financial year. This left the LSC with a dilemma as it had a £2.7bn funding gap having found money for just eight of 79 jobs recently given approval in principle.

After a period of assessing which colleges were ready to start on site this summer, the LSC moved on to the next stage of its prioritisation process this month. It is judging the shovel-ready jobs against a five-stage criteria devised by consultants PwC.

A shortlist of colleges will then be drawn up, and the final stage will see all shortlisted colleges asked to come back with revised plans that require less funding. Final decisions on funding will then be made from July.

The UKCG has estimated that 40,000 jobs through the construction supply chain are reliant on the 71 stalled projects going ahead.

Shadbolt Law senior associate Paul Henty warned that colleges could be legally bound to re-procure projects that had been changed “substantially”.

“That will be the case where the new scope, had it been included at the outset of the contest, would have affected the identity of the bidders, the content of the bids or the outcome of the competition itself,” he said.

“Where a substantial change is introduced either to the parameters of a competition or even to a concluded contract, the contracting authority will usually be legally required to hold a fresh competition, issuing a new OJEU Notice to reflect the changed requirements.”

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