20 July 2010 | Angeline Albert
The Treasury’s decision to axe the Building Schools for the Future programme could cut the number of vendors willing to spend time and money bidding for Whitehall deals, says a leading procurement professional.
The announcement by education secretary Michael Gove that BSF would close dealt a blow to councils and suppliers. Portsmouth City Council (PCC) was looking to select two contractors for its £200 million BSF programme, which included starting construction work on two schools in 2011 and work on 10 other schools.
David Pointon, a former chairman of the Society of Procurement Officers and procurement manager at PCC, said: “It is very disappointing as we spent the best part of 18 months getting things organised. If I was a contractor who had spent money on bidding for a contract, I’d be more than a little irritated by the government’s decision.
“This may weaken contractors’ appetite for big ticket schemes. I think companies will be more selective in future.”
BSF projects for nine schools in Sandwell in the West Midlands have also been axed. Contractor Interserve had signed a deal to carry out building work at 20 Sandwell schools, but only 11 schemes will proceed. Interserve believes it is unlikely to receive compensation because no work had started.
“A rash decision before a review of alternatives damages supplier relationships,” said Rudi Klein, chief executive of the Specialist Engineering Contractors’ group, which represents 60,000 firms.
He said: “There is deep resentment among firms, especially smaller firms. We have advised them to write to Gove and their MP to ask [for] a review to take place before making a decision. We have been saying they should spend more time looking at efficiency in procurement and delivery, which would lead to significant savings for the coalition.”
He added: “Supplier relationships will recover if the government starts looking at procurement best practices.”
When Gove announced the final list of cancelled schemes, 1,592 schools were going through the BSF programme. To date, 96 schools have been rebuilt and 84 refurbished.
Last week, the Local Government Association estimated that councils had been obliged to spend more than £161.4 million on public consultations and tendering for cancelled projects.