Sector News
Suppliers and Subcontractors to Built Environment Give their Views on Public Sector Contracting

Scape Group is a public-sector-owned built environment specialist; it offers a suite of OJEU-compliant frameworks and design solutions that are available to any public body in the United Kingdom. More details on the organisation can be found here. Worthy of a quick mention we thought was that earlier this year the procurement body announced a big change to the national major construction framework for public projects worth more than £2 million. The existing framework is currently led by one main contractor, but after May 2017 multiple winners are expected to be appointed for the first time, with new regional lots covering projects from £2 million to £20 million will be rolled out. Over 4 years, the new framework is the the biggest yet to be offered  to contractors with an estimated value of £5.5 billion. More details here.

That aside, Scape Group also produces some sound research. One particular study, carried out just this summer, we think will be interesting for many of our readers. Although based on the outcome of UK responses, from over 150 senior managers at public sector organisations across local and central government, and a range of suppliers and subcontractors delivering built environment services, its findings will ring true in many European countries as well.

The survey asked questions about tendering processes, bid opportunities, stability of the supply chain, supply chain management, skills shortage and the sector’s reliance on public projects. It makes for some interesting reading as it provides individual perspectives from  the public sector itself, the supply chain side and SMEs.

Some brief highlights include:

Public Sector Perspective

“Each year the value of public sector construction activity is around £30 billion. It is vital that in austere times for both central and local government, this investment attains maximum value from the public purse.”

*72% of public sector organisations said they use frameworks to procure goods and services from suppliers – it is the most successful method.

“However, a key issue in the tendering process from the perspective of the public sector remains the lack of forward visibility suppliers have of new public sector work.”

28% believe that suppliers are ‘poorly informed’ about opportunities to bid for work.

79% said inadequate visibility of future contracts is a barrier to delivering a sustainable supply chain.

42% of public sector managers highlighted the skills shortage as one of the biggest barriers to a sustainable supply chain

35% rated the skills shortage in their local area as ‘bad’ or ‘severe’ with 80% saying the skills shortage had a direct impact on their ability to deliver on time

50% said that they would typically like to see 50% or more local spend within 20 miles of each project. However, 80%** believe that the public sector ‘needs to do more’ to engage with its supply chain.

Supply Chain Perspective

“The public sector remains one of the most important clients for those who provide built environment services through the supply chain. However the nature of the public sector has changed as a result of the financial restrictions imposed since 2010; and that has also impacted the supply chain.”

66% said that less than 50% of their work currently comes from the public sector.

*45% of the businesses surveyed use frameworks for public sector projects and contracts

68% said they typically bid for public sector work 6-12 months before a project or contract starts, 33% believe they should be able to bid up to 18 months before

** 75% said the public sector needs to do more to engage with its supply chain

39% say the skills shortage has a negative impact on their ability to keep to budget, with 1 in 10 listing this as a ‘critical’ impact on budget

SME Perspective

26% of SMEs said that more than 50% of their work comes from the public sector

42% receive work through public sector frameworks

36% learned about new opportunities to bid for work through OJEU while 88% receive work through invitations to tender or quote directly by a procuring body or client

51% said they did not feel well informed about future public sector contracts

57% said the skills shortage was one of the biggest barriers to maintaining a sustainable supply chain

77% said the public sector needs to do more to engage with its supply chain

These are telling comparisons, especially with regard to engaging with supply chain, visibility and skills shortage – and you can draw you own conclusions. The report contains much more detail and analysis about what these figures tell us and gives its recommendations for moving forward. It can be downloaded as a pdf file for free, without registration, here.