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Armitt report demands ‘urgent action’ on Olympic marketing

ODA chief executive John Armitt has called for his organisation’s approach to procurement and programme management to be used for all public projects worth more than £10 million

Armitt’s report, London 2012 – a global showcase for UK plc, was released today (see attached) and also calls for ‘urgent action to ensure that marketing restrictions applying to London 2012 suppliers are relaxed as soon as possible’ after the Games, reported sister title Construction News.

The report surveyed construction firms who worked on the games and 276 companies contributed to its findings, including that ‘smaller contractors have not enjoyed the same degree of success as larger businesses, and do not have the same optimism and confidence about the future’.

Armitt said: ‘The next 12 to 18 months represent a crucial window of opportunity for UK businesses to capitalise on their involvement in the project, particularly in terms ofsecuring work on other major sports events - a fast-growing sector that is creating many new opportunities.’

Government statement on marketing rights:

The building of the Olympic Park and other Games venues for London 2012 has been a great success story for the UK. We understand and support the reasons why restrictions have been in place to protect the marketing exclusivity of London 2012 sponsors.

Government, however, is committed to working with relevant partners, most notably the BOA and through them the IOC, to find a way to ensure that contractors and sub-contractors can seek a form of recognition of their superb contribution to the Games to support them in competing for new contract opportunities.

DCMS is in discussion with the BOA and hopes to have a workable solution in place through which supplier companies can make reference to the work they have undertaken by the end of 2012. The discussions will run into the autumn given the immediate focus of both the Government and the BOA/BPA on delivering a successful Olympic and Paralympic Games.

The report found that:

  • 68 per cent of companies said working on London 2012 had enhanced their reputation, rising to 77 per cent for larger companies
  • 37 per cent of ODA contractors said they had already got new business thanks to their experience working on the Games
  • More than 48 per cent of businesses said their company’s financial situation had been enhanced by working on London 2012
  • To date, only 12 per cent of companies have secured work through CompeteFor, something Armitt attributed to ‘the high levels of registration, far in excess of the number of contracts’.
  • 66 per cent of companies were more optimistic about their prospects as a result of working on London 2012
  • 74 per cent anticipated future work as a result of London 2012 at home and abroad – with only 18 per cent believing there would be none
  • Almost a third of companies have already secured further work as a result of their experience with London 2012. This figure (31.6 per cent) rose to 37 per cent for larger companies and those whose contracts were solely with the ODA
  • Almost three-quarters of companies (74.3 per cent) anticipated future business opportunities as a result of their involvement in London 2012, half of these believing they would secure international contracts.
  • A third of participating businesses had expanded their supply chain, almost all saying that these new relationships would be used in future projects. A quarter had developed joint ventures that would be taken forward.

However many respondents cited restrictions on publicising their involvement as a negative factor. One complained: ‘To get any real commercial benefit, companies need to be allowed to demonstrate that they have, and are indeed working, on the London 2012 Games and this is virtually impossible in any real sense at the moment.’

Another said that although their reputation had benefitted ‘this has not been a major enhancement due to the restrictions on promoting our involvement with the construction of the 2012 facilities.’

Among the report’s recommendations were that government should adopt the principles of the procurement and programme management approach used by the ODA for all public sector projects valued at over £10 million – including recognising the benefits of a ‘balanced scorecard’ approach to procurement, incorporating other criteria like Sustainability and health and safety, in addition to time, cost and quality

Armitt said that a comprehensive marketing tool should be created to promote the success of UK plc, government and its agencies, and individual companies, in building the venues and infrastructure for the London 2012 Games

He added that the CompeteFor network should be retained for all public sector projects, given fresh promotion and its database expanded.

The government said that UKTI has recently launched version 2 of Springboard to Success - a Suppliers Directory which showcases over 700 UK companies who have won contracts to supply major global projects including London 2012.

It added that CompeteFor will be promoted where appropriate. Work is currently underway within the GLA Group’s Responsible Procurement team (based in TfL) to create a sustainable business model for CompeteFor that will enable it to continue after the Games. In addition, future host nations are looking at the CompeteFor model as a vehicle for their own procurement opportunities.

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