SMEs risk exclusion from public sector contracts

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Construction firms in the South-west have been assured they will not be frozen out of public sector contracts worth tens of millions after new authority Construction Framework South West promised a lower tier for contracts under £1 million.

The National Federation of Builders had warned that thousands of small and medium-sized contractors would be "left out in the cold".

CFSW aims to create a single group of contractors for all public sector projects. Bids to tender have been submitted and lists of firms – many including NFB members in consortia – will be unveiled within weeks.

CFSW denied it excluded SMEs and said it plans to introduce a second tier in the framework for SME contractors.

Thirteen clients including Plymouth and Bristol city councils, Bournemouth Borough Council and Exeter University have signed up to the scheme, which was created to speed up the procurement process.

Previous research by the NFB has revealed problems for members getting access to some public sector contracts.

Talks between the NFB and CFSW had failed to reach a solution, with the NFB calling for the introduction of a second tier within the framework for SME contractors.

Mat Woodyatt, regional services manager for the NFB in the South-west, argues that introducing a second tier is essential to providing local firms with fair access to contracts.

Mr Woodyatt said: "While streamlining procurement processes is in everybody's best interests, it needs to be done in a way that includes the Southwest's SME contractors.

"It is an issue of great importance to the regional economy and the future of our local construction industry."

Julia Evans, chief executive of the NFB, said it was "not for us to be for or against [frameworks] as they are Government policy".

She added: "CFSW have been open and have engaged with us. The NFB is always concerned that its members get exposure to tendering."

An SME tier would replicate framework agreements in other areas. CFSW is based on the South-east Centre of Excellence framework run by Hampshire County Council, which will award about £1.5 billion worth of projects in its first two years.

It is now called the Improvement and Efficiency Southeast and covers 74 authorities. Programme manager Keith Heard told Construction News: "We have created two further tiers of frameworks in Hampshire based on clusters of authorities. SMEs are geographically constricted and tiers like this make sense for both councils and SMEs."