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Prime contracting: so what?


What is prime contracting? Briefly, it involves a single firm assuming responsibility for the project from start to finish. As project supremo, it will manage construction, make sure all methods and systems are integrated and co-ordinate supplies.

How does it work? Robust negotiation to start with, followed by lots of touchy-feely culture sharing.

Why does it exist? The Government needed to update its procurement process to get away from lowest cost tendering. This way, delivery of the job is guaranteed and the client bears no risk.

What is it trying to achieve? 40% whole life cost savings. Theoretically, we also get structures that are fit for purpose, happier clients and contractors improve their bottom line.

Is it just an MoD thing? No. The Government has recently adopted prime contracting as one of its preferred procurement routes - we should see it right across the public sector and there is private sector interest too.

How do I become a prime contractor? First you need a turnover equivalent to or greater than the contract value you are bidding for. Alternatively, get some very rich friends.

How do I get to be a supplier? Tender hard and prepare to alliance, partner and generally be co-operative.

And? Those involved in prime contracting say it is very different to conventional contracting - more focus on design, shorter time on site, no confrontation, no claims, no earning of fast bucks, for starters. But once you've adjusted mentally, the ability to turn over work faster and improve profit are appealing. And because prime contracting is about close relationships, the likelihood of winning repeat work appears good.

Sceptics argue prime contracting is about client convenience, where farming out risk and demanding huge cost reductions as well places consultants and contractors under duress.

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