Breaking: Cabinet Office minister Francis Maude has said that the Education Funding Agency’s £5bn Regional Framework should be cancelled and re-procured, according to the National Federation of Builders.
Mr Maude said in a meeting with the NFB that the EFA’s £5bn Regional Framework needed to be cancelled because the Cabinet Office’s Mystery Shopper scheme found it was non-compliant with procurement policy notices, the NFB’s head of policy and research Paul Bogle told Construction News.
The Crown Commercial Service and the crown representative for SMEs Stephen Allott were also involved in the discussion; however, Construction News understands the EFA was not present.
As part of the school-building framework, which is divided into six regional lots, the EFA required contractors bidding to have a minimum turnover threshold of £25m in each region that they bid for.
In consortia, each bidder was required to have a turnover of at least £10m in each region that they bid for, with each consortium to meet the minimum £25m-turnover threshold in each region.
The Cabinet Office confirmed that in early 2014, while the Regional Framework was being procured, a mystery shopper raised concerns that the EFA was using a turnover threshold to assess the financial strength of suppliers.
The Mystery Shopper scheme reported that it had discussed the concerns with the EFA and drawn its attention to procurement policy note 02/13, which advises procurement bodies against excluding bidders solely on the basis of turnover.
It reported that the EFA accepted its recommendation to apply the policy in future procurements.
The Cabinet Office declined to comment further.
Mr Allott said: “Government policy is to get full value from SMEs, buying from an SME every time they are the best value for money supplier.
“A mechanistic turnover threshold prevents potential bidders from even competing for four years.
“All frameworks should be kite-marked by the excellent Cabinet Office Mystery Shopper Service for compliance with all the relevant Procurement Policy Notices.”
NFB chief executive Richard Beresford added: “Setting turnover limits goes against mandatory Cabinet Office Procurement Policy Notices.
“More importantly, it means companies are shut out and cannot compete in that market for four years.”
The Regional Framework was set up to deliver smaller school-building projects and to give SME and regional contractors access to the EFA’s school-building programmes.
However, only two out of 43 spots on the framework were awarded to contractors with a turnover of less than £100m when contractors were appointed last July.
Meanwhile, more than half of the places (23 out of 43) were awarded to six contractors, all of which are also on the £4bn national Contractors’ Framework (see list below).
A report co-authored by the National Federation of Builders, consultancy DeNové and architectural group Project Compass published last month claimed the EFA had set “unnecessarily high” turnover thresholds for contractors bidding for a place on the framework, and said it should be cancelled.
It also recommended that some contractors are “called off the framework” and to limit competition to contractors that are not appointed to the main Contractors’ Framework.
The Education Funding Agency declined to comment due to purdah. The CCS directed enquiries to the Cabinet Office.
EFA Regional Framework winners
|North-east (£500m)||East of England (£750m)||London & South-east (£1.5bn)||South-west (£500m)||West Midlands (£875m)||North-west (£875m)|
|Bam Construction||Bam Construction||Bam Construction||Bam Construction||Bam Construction||Bam Construction|
|Bowmer & Kirkland||Bowmer & Kirkland||Bouygues||Bouygues||Bowmer & Kirkland||Bowmer & Kirkland|
|Interserve||GF Tomlinson||Bowmer & Kirkland||Galliford Try||ISG||Conlon Construction|
|ISG||ISG||Galliford Try||Interserve||Kier||Eric Wright|
|Willmott Dixon||Willmott Dixon||Rydon||Skanska||Thomas Vale||Shepherd|
*Contractors in bold are also on the EFA’s national Contractors Framework.