Cabinet Office minister Francis Maude has said that the Education Funding Agency’s (EFA) £5 billion Regional Framework should be cancelled and re-procured
The Conservative MP for Horsham – who will be standing down at next week’s election – is understood to have told the National Federation of Builders (NFB) that the agency’s contractor-led framework needed to be scrapped.
The move could potentially pave the way for smaller contractors and a raft of new architects to get involved in school building work.
According to the NFB’s head of policy and research Paul Bogle, Maude had said the Cabinet Office’s Mystery Shopper scheme found the framework was non-compliant with procurement policy notices.
The Crown Commercial Service and the Crown representative for SMEs Stephen Allott were also involved in the discussion, however the AJ’s sister title Construction News understands the EFA was not present.
The surprise move comes a month after NFB and procurement reform group Project Compass issued a report claiming EFA turnover thresholds were ‘unnecessarily high’ and the framework should be cancelled.
Project Compass director Walter Menteth said: ‘The report has helped to get the EFA regional framework overturned by Maude. It is to be re-run, opening up opportunity for a wider more diverse range of SME contractors and their architects to be engaged.
He continued: ‘This is a real win for all wishing to see more and better access, with a democratic and a more open approach by Government and the public sector towards procuring better buildings and environments that deliver more sustainable outcomes for the public.’
Allott added: ‘We need to reach a point where SMEs are able to compete on a level playing field and this report and the minister’s decision are important first steps in ensuring that frameworks comply with mandatory guidance so we don’t spend taxpayers’ money fixing avoidable mistakes.’
For the school building framework, which is divided into six regional lots, the EFA required contractors bidding to have a minimum turnover threshold of £25 million in each region that they bid for.
In consortia, each bidder was required to have a turnover of at least £10 million in each region that they bid for, with each consortium to meet the minimum £25 million turnover threshold.
The framework was awarded in July 2014, with a total of 16 contractors winning 43 places on the four-year deal to deliver school building works worth between £200,000 and £12m.
The Cabinet Office confirmed that in early 2014, while the Regional Framework was being procured, a mystery shopper raised concerns that the EFA was using a turnover threshold to assess the financial strength of suppliers.
The Mystery Shopper scheme reported that it had discussed the concerns with the EFA and drawn its attention to procurement policy note 02/13, which advises procurement bodies against excluding bidders solely on the basis of turnover.
It reported that the EFA accepted its recommendation to apply the policy in future procurements. The Cabinet Office declined to comment further.
Allott said: ‘Government policy is to get full value from SMEs, buying from an SME every time they are the best value for money supplier.
‘A mechanistic turnover threshold preventspotential bidders from even competing for four years.
‘All frameworks should be kite-marked by the excellent Cabinet Office Mystery Shopper Service for compliance with all the relevant Procurement Policy Notices.’
NFB chief executive Richard Beresford added: ‘Setting turnover limits goes against mandatory Cabinet Office Procurement Policy Notices.
‘More importantly, it means companies are shut out and cannot compete in that market for four years.’
The Regional Framework was set up to deliver smaller school-building projects and to give SME and regional contractors access to the EFA’s school-building programmes.
However, only two out of 43 spots on the framework were awarded to contractors with a turnover of less than £100 million when contractors were appointed last July.
Meanwhile, more than half of the places (23 out of 43) were awarded to six contractors, all of which are also on the £4 billion national Contractors’ Framework.
The Education Funding Agency declined to comment due to purdah. The CCS directed enquiries to the Cabinet Office.