Smaller building firms missing out on £6.5bn
SMALLER BUILDING firms are passing up the chance to share in an estimated £6.5bn of regeneration work on Teesside because the cost of bidding for public tenders is too expensive, while they said joining a tender consortia pose unnecessary risks to their business.
David Foreman of Forefit Structural Glass Solutions - a glass installation specialist currently conducting maintenance work for three Teesside schools - said he was not planning to bid for work from Building Schools for the Future (BSF), a £150m public-private sector scheme that will involve the building and renovating of education facilities across Stockton Borough.
He said: “Larger companies can make a corporate decision that you are not going to get paid for two or three months. We can’t afford to wait that long.”
Chris Howitt, owner of CMH Joinery in Darlington, said forming an alliance with a larger construction firm could put his firm in jeopardy.
Regeneration bosses insisted that small firms had a good chance of securing business from multi-million pound projects, although they admitted that cost of tendering was prohibitive.
Lionel Danby, Stockton Council's BSF project director, said: “Bidding for work on a project of this size could incur costs of up to £2m, which are not reimbursed if the company doesn’t get the work. Most small contractors would struggle to cover this on their own.”
Specialist procurement websites have been established to put companies in the shop window for public sector contracts.
The Office Journal of the European Communities (OJEC) site - www.ojec.com - contains a tender tracking system that automatically sends contractors work opportunities by e-mail.
Meanwhile, Supply2.gov.uk provides access to lower-value contract opportunities, typically worth under £100,000.
But firms that have used the sites say they don’t deliver work, and Government should instead give financial help to smaller companies bidding for large-scale projects.
Shaun Cooper of Middlesbrough-based CT Contractors said: “It may cost more than £15,000 to conduct the necessary audits, site visits and surveys and train staff up to ISO 9000 standards. The Government should subsidise this cost for small firms.”
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