Exclusive: Contractors on a £1bn council framework will be given lay-down areas so they can stockpile supplies to mitigate the impact of a no-deal Brexit.
Barking and Dagenham Council’s regeneration company, Be First, revealed last month it had inserted a clause in its framework insisting all bidders show they have managed the risks of a no-deal scenario.
Speaking to Construction News, Be First commercial director Iain Ferguson (pictured) has now revealed that it is identifying sites within the borough for contractors to stockpile components and materials.
“One of the things that we are actively looking at is providing contractors with lay-down areas in the borough,” he said.
“It’s nothing other than a fenced-off piece of land that the contractors can use to store components.”
Mr Ferguson said he expected these areas would primarily hold supplies, but that they could also be used for certain items of plant if big enough sites could be secured.
The commercial director added that sites would likely be unused council land, but that Be First was also looking to acquire some land for this specific purpose and had identified one “vacant site that would be ideal”.
The lay-down areas will not come into operation until the first quarter of 2019, but Be First has already discussed the move with contractors that have expressed interest in being part of such a scheme.
Barking and Dagenham Council’s £1bn framework has more than 44 projects in the pipeline and will span the next four years.
Firms are being sought to deliver 2,500 residential units along with supporting infrastructure such as schools, libraries or community centres.
Mr Ferguson told CN that the regeneration arm wanted to take a proactive approach to Brexit to ensure responsibility was shared across stakeholders.
“Why should I just sit on my bottom and say to the contractor, ‘It’s your problem?’,” he said. “Brexit at the end of the day is [everybody’s] problem here in the UK.”
Mr Ferguson revealed that Be First had received a variety of responses to the no-deal Brexit planning clause in its £1bn framework.
He said the client was broadly pleased with contractors’ efforts, although a small minority had focused purely on cost.
“We’ve had a really good response, but it’s been a bit varied,” he said.
“Some have told us they’re doing quite a lot of investigatory work – going back through their supply chain looking at the origin of specific components, and with that in mind they are looking at the extent they can dual-supply in the UK or find a similar product.
“Others are saying, ‘We recognise there are a series of risks, but let’s recognise upfront how those risks are going to be shared and in what proportion’.
“And there are a minority that say, ‘I don’t know and you don’t know what’s going to happen, so we would like a clause that says if there is a Brexit issue then you’ll have to pay’.”
The Be First director singled out currency devaluation as one of the biggest issues relating to Brexit.
“You could see sterling go below parity to the euro and if you’re working on fixed-price contracts that could affect [contractors’] profitability and cashflow,” he said.
Mr Ferguson added that the UK’s departure was likely to worsen any labour problems that already existed, but that this issue varied from company to company.
“There’s a skill shortage in the sector; if there’s a migration outwards that will exacerbate the situation,” he said.