Tender costs must be reduced, says senior government official
Frame suppliers are expected to cut costs for contractors wanting to join them, said Crown Commercial Service (CCS) commercial director Noreen Winhall.
The bidding process to obtain executives, which are increasing in number and value, can be costly for contractors. Additionally, these costs can be difficult to recoup if the framework does not produce enough work for individual contractors.
Speaking on the first day of the CN Summit last week, Winhall called for lower bidding costs: “I recognize that bidding costs are really high,” she said. “I think we have to try to lower the bidding costs first.”
To reduce costs from the start, Winhall suggested including more generic questions that apply to all bundles in one framework instead of bespoke questions for each bundle, which would help avoid duplication and reduce administration. “It will also help to reduce the initial burden of the tender for suppliers and also facilitate the evaluation of the tender process,” she added.
Additionally, Winhall recommended that the pre-qualification questionnaires be aligned with those found in PAS 91, which aims to standardize the first part of the bidding process.
The number of vendors appointed to executives should also be carefully considered, the CCS director said. If too many companies are named, there is a risk that some companies end up earning little work and try to recoup project costs. Panel chairman Peter Yates, regional executive director for Constructing West Midlands, raised the possibility that this effort to recover costs could compromise safety and quality standards.
Earlier this year, Building News deepened into industry-wide challenges around frameworks and the difficulty of recovering costs in the bidding process.
Using the contract value-based lot structure was also a way to ensure that the vendors best able to provide that work value were in competition with each other. Winhall said value-based lot structures gave contractors a better chance of winning work and recouping costs.
Kingsley Clarke, Southern Construction Framework (SCF) operations manager for the South West, cautioned against simplifying tenders: “We don’t want to create unnecessary work just to get it. But facilitating access, I don’t think is the right thing,” he said.
“We have a fairly stable pipeline of north of £600m a year. We have more applications than places and the only way to ensure we choose the best contractors for our framework is to have challenging, quality questions and push the boundaries of what we can ask,” said said Clarke.
He added that he recognized the need to avoid duplication and said PAS91 was helpful in avoiding this.