Analysts are predicting that sections of the UK economy will rise slowly out of recession in 2010. However we know that things will still be tough for the construction industry.
To add insult to injury, the looming election stimulates fears of savage cuts to public sector spending.
If you rely heavily on the public sector, and many of us have been in recent months, you will want to get a decent share of the work that is there. That will certainly mean refining bid tender skills, and improving success rates, in an increasingly competitive market.
With fewer contracts in the pool, national contractors are likely to go for the ‘quick and dirty’ approach of chasing smaller value contracts in the hope of winning more. In doing so they will be moving into regional and SME territory and small and medium-sized contractors could be at a distinct disadvantage if they don’t start working together.
National contractors have rarely had problems negotiating the public sector procurement process. They are geared up for the way it works and are at an immediate advantage with their higher turnovers and in-house teams dedicated to preparing the perfect tender.
SMEs can struggle to keep up with the sheer volume of tender opportunities, and usually have to reassign staff from other tasks in order to complete prequalification questionnaires. In many cases, as individual companies, they don’t have the required turnover to meet prequalification requirements on many contracts.
But, all is not lost. By pooling resources and forming consortia, and partnerships, with like-minded businesses, regional contractors and SMEs are in with a good chance.
A group of four contractors in the South west of England did just that and got together to form the Builders Consortium South West with a particular goal in mind. Their goal was to win a place on a highly competitive £500m regional framework, called Construction Framework South West, itself run by a consortium of 18 councils.
As individual companies their turnover would have disqualified them instantly but as a consortium their combined turnover fitted the minimum requirements of £130m. By pooling their resources, and no doubt emphasising the value of regional contractors to local councils, they achieved their goal which will see them working on schools, social housing and other council buildings across the region.
Mark Whitaker, commercial director of ER Hemmings, the lead contractor in the consortium, said “I’m well aware that it has been argued that these frameworks and the procurement processes that come with them shut out SMEs, but what we have done proves that doesn’t have to be the case. We are on a framework with companies as big as Wates and there is no reason other SMEs can’t do the same.”
Bid consortia and partnerships are the way forward for regional, and small and medium-sized contractors wanting to tender successfully for public sector work in the coming year. If you want to stay in the running, if and when public sector budgets are cut, you will need to find like-minded partners now and pool your resources to increase your chances of success.
Deborah Rowe, principal consultant of Sheba Marketing, is a member of the organising committee for the Chartered Institute of Marketing Construction Industry Group.