A quarter of local authorities plan to abandon framework agreements over the next year, a survey by government prequalification register Constructionline has found.
Eight of the 32 local authorities surveyed said they would scrap their frameworks to encourage competition between contractors in the hope of securing lower bids.
Almost half of local authorities said they planned to do more to help smaller firms from their area compete for tenders. When it comes to the tender process, a contractor’s financial performance had become more important to 90% of respondents in the last 12 months. A contractor’s health and safety competency had also become a key consideration for 95%.
Around 70% of local authorities had seen regular suppliers become insolvent during the last 12 months - over 650 construction firms failed during the first three months of 2010 alone.
Constructionline also revealed that 88% of local authorities are under increased pressure to cut their procurement processes costs.
“Increasingly, the public sector is employing more sophisticated techniques at the pre-qualification stage, such as real time financial monitoring, as well as placing tougher demands on their main contractors to thoroughly assess their own supply chains,” said Constructionline director Philip Prince.