Frameworks: 'Adapt or lose out' on work (CJ conference report)

Speakers warn delegates that local authorities are now faced with enormous pressure to make efficiency savings with frameworks.

If local and regional contractors want to keep working for local authorities they must adapt to the world of frameworks or lose out.

That was the harsh message from clients and government organisations coming out of Contract Journal’s recent ‘Profiting from Frameworks’ conference.

Both David McMeehan, director of the construction and facilities management efficiency division of the Office of Government Commerce, and Chris Allison, director of the East Midlands Centre of Excellence, warned delegates that local authorities were under tremendous pressure to make efficiency savings.

McMeehan said: “The metrics on frameworks are coming through now and we are measuring the efficiency gains.

“The marketplace has voted with its feet and there will be a stampede of frameworks. There is a bigger change going on than we know of.”

Allison reminded the conference that the government was looking for £6.45bn in efficiency savings from local government following the Gershon Review.

He added: “The Gershon agenda is to be extended for another seven years and there will be even tougher targets for local authorities to meet. Construction is the highest spending work stream for councils at around £14bn a year and we intend to lobby government to get frameworks taken on as the first choice procurement method.”

Kevin Kendall, head of design at Nottinghamshire County Council, said: “We are under significant pressure to save money and one of the benefits of frameworks is that we will be able to demonstrate savings – frameworks are here to stay.”

Steve Vickers, general manager of Urban Design at Birmingham City Council (BCC), issued a stark challenge to the audience of local and regional contractors.

“If you stand still you will get left behind. If you want to win a place on a framework, you’ve got to play the game.”

Vickers offered the following advice to smaller contractors in their fight to compete with large national firms. “You need to recognise your expertise and value – many of you underestimate that and you need to be bold about expressing it,” he said.

“You need to develop collaborative working methods.

“We recognise that you need support there, so speak to your regional Centre of Excellence and use the National Federation of Builders’ CAPS accreditation scheme. You must also seek to demonstrate continuous improvement.”

Several delegates pointed out that many contractors in the £5m to £20m turnover bracket were being frozen out by frameworks despite delivering good projects through partnering arrangements with local authorities.

While not disagreeing, Vickers pointed out that one of BCC’s construction partners had started out in that turnover bracket.

“It’s difficult to know where to set the project band value threshold,” he said. “But are you prepared to work collaboratively with a bigger partner? Or do you want to stay as a sole contractor and work together with others in a group?”

[Contract Journal, 11 October 2006, p 8]