New MoD partnering plan causes concern

Fears are growing that the Ministry of Defence's new partnering scheme to be launched in April will lead to a concentration of power in the hands of a small clutch of prime contractors.

Construction Confederation chief, Alan Crane, is writing to defence minister John Spellar outlining the concerns of the confederation's 5,500 member firms and asking for clarification.

Crane said: "If there is to be open supply-chain management with open contracting management systems then we will have no problem. But at this stage we cannot say whether we will support it because we are not clear on how it is going to work."

Other industry leaders, while publicly welcoming the initiative, are also privately concerned at the current lack of detail about how the scheme will work and the risk of reducing competition. Some fear that MoD's middle management may not be able to make the culture switch to partnering.

The MoD first announced major changes to the way it spends its £1.5 billion annual construction budget in October in order to achieve 30 per cent savings.

Starting in April 1999, it will slash its contracting base to a small number of prime contractors, bundle contracts into large packages and adopt a partnering approach.

Last week Spellar wrote to construction bosses asking for "positive feedback" on the proposals. Thus far only Laing, Amec and Balfour Beatty seem likely to gain prime contractor status for the first tranche of work.