NFB urges the government for a fair procurement process

The National Federation of Builders (NFB) urges the government for a fair procurement process, in response to the Treasury agreeing to terminate PFI on Midland Metropolitan Hospital.

The Treasury has reportedly, decided to end the Private Funding Initiative (PFI) on the Midland Metropolitan Hospital following Carillion’s collapse. The European Investment Bank, Credit Agricole, KfW IPEX, DZ Bank and Sumitomo Mitsui were also part-funding it.

It is understood that the government is now exploring the possibility of putting a revised PFI deal together to complete the outstanding work on the hospital and is going to market to discuss this option. If a new PFI deal cannot be agreed, it will most likely be completed as a government-procured construction job.

A report by the National Audit Office into the contractor’s collapse said that the firm lost around £48 million on the job in 2017.

Neil Walters, national chair of the NFB, said: “Change doesn’t just happen, you have to make it happen. The government has said it wants to learn the lessons from Carillion but appears – yet again – to be using exactly the same procurement method for a quick fix.

“There are more efficient methods of procurement than PFI available now, that are a better use of taxpayers’ money, and we don’t need to wait for the ink to have dried on the investigations into Carillion to implement them.”

In 2007, the NFB, was one of the first organisations to take issue with how the government’s approach to procurement and frameworks put SMEs at a distinct disadvantage. A disproportionately onerous administrative bidding process costs thousands, even tens of thousands of pounds, win or lose. Some of our members report spending up to 30 days each year on bidding for work. We do have mechanisms in place which have levelled the playing field. However, central government and local authorities, where SMEs gain most work, do not apply them.