Public displays of construction present big opportunities to smaller firms

This year has presented tough challenges for firms of all sizes in all industries. There has been an urgent need to adopt a ‘business survival’ approach to ensure the recession can be weathered.

But, despite many challenging financial pressures, one plus point for companies in construction and built environment sectors has been the government’s commitment to deliver new build and refurbishment projects in the short to medium term.

In 2008’s Pre Budget Report (PBR) chancellor Alistair Darling revealed an extra £3bn of construction work to be brought forward to 2009/10, to help maintain demand for work in the sector. Projects across the country, such as the Thames Gateway regeneration and major station redevelopments, have presented construction SMEs with opportunities to benefit from the new contracts. In addition to this, the government remains ambitious to build hundreds of thousands of new homes in the coming years, creating yet more opportunities for firms to contribute and benefit.

One factor that is becoming ever more important in public sector procurement is firms’ commitment to skills and training. In April 2009, the Office of Government Commerce (OGC) published new procurement guidelines, stipulating that businesses using apprentices can be prioritised for publically-funded work. This model was reinforced by housing minister John Healey’s pledge to make apprenticeship schemes and local recruitment compulsory for securing support through the Housing Pledge, announced in
Building Britain’s Future document in June.

It is hoped that these priorities will help initiate a culture change, where it’s the norm that not just the cheapest contractor – but the one that invests in a community’s future – will have additional selling points when it comes to securing public sector work. That means, for example, that the firms building colleges, hospitals, schools will have to demonstrate a strong commitment to employing apprentices, who are, unequivocally, the lifeblood of the industry. No big future construction projects can be approved without proof that a well-trained and dedicated workforce can be mobilised.

In addition to this policy, up-skilling employees during the downturn can put SMEs in a stronger position to win new contracts. Taking on apprentices and providing training and qualifications for more experienced staff will not only increase the entire company’s skills base, resulting in better quality work delivered, morale is likely to be boosted across the workforce.

It is no surprise, that our industry’s output – be it public buildings, commercial buildings or homes – has a major impact on the environment and in order to meet construction targets, and potentially become leaders in sustainable construction, changes need to be made in how we design and build. Sustainability is a long-term, permanent issue that lies at the heart of design, process innovation and construction with lasting environmental, social and economical benefits.

Procurement processes are important in reducing the overall costs of projects and ensuring that completed projects are fit for purpose.The government’s strategies for sustainable construction and the 2008 Climate Change Act seek to identify, and change, how procurement policy can better support the environmental effects of the construction industry.Successful procurement policy requires ethical sourcing and encouragement of early supply-chain involvement.

Environmentally responsible construction and maintenance methods are not only desirable, but will soon be mandatory as increasing emphasis is being placed on building and infrastructure ‘life costs’, opposed to simply the cheapest option.Businesses will be under pressure to develop more innovative approaches to building, and they will only achieve this if they have the right skills set.

After training and sustainability considerations, SMEs must consider their relationships with larger construction companies. Traditionally, projects are delivered by ‘major contractors’, and trades such as brickwork are outsourced to smaller firms or sub contractors.

Certain public sector frameworks, such as Procure21 – used by the NHS to award publicly-funded healthcare construction projects – stipulate that businesses must be able to deliver projects anywhere in the UK, meaning SMEs are unlikely to qualify on their own. But if smaller firms can align themselves with larger counterparts that are on frameworks or regularly deliver work for the public sector, they broaden their potential client base and the chances of an upturn in revenue will improve.

It’s important to consult local chambers of commerce and regional development agencies (RDAs) on contract requirements. Further information is available via 4ps, part of the Local Government Association, which handles procurement practices for the public sector.

Promoting your business to potential clients is another good way of increasing your profile. Supply2.gov.uk, a government-sponsored website, provides advice on winning public sector work. As well as advertising available contracts, it provides a forum for businesses to register their company profiles and expertise.

ConstructionOnline (constructiononline.co.uk) is another resource where businesses can advertise their services, featuring an online database of pre-qualified construction contractors and consultants, which SMEs are encouraged to join.

However, business promotion must be approached with caution. There are strict codes of practice and, for example, councils cannot award contracts to businesses that send gifts or other benefits in kind. Once the opportunity to bid for work has been won, it’s vital that companies complete written tender documents. A common mistake is not covering all aspects of the brief, or submitting more or less than the stipulated number of pages required. Such requirements may seem restrictive, but they allow public sector buyers to compare tenders fairly.

Public sector tenders and contracts need careful planning and precision, so what could you be doing now to be in the best position to win a public sector contract? The best way to succeed during and recover from the downturn is by preparing for the upturn – investing in a skilled workforce and incorporating sustainable approaches to every facet of the business will certainly provide the best atmosphere for business survival.

For further information on construction training, visit Construction Skills.