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Small firms voice concern over prime contracting

News

SMALL CONSTRUCTION firms this week raised concerns that the Ministry of Defence's new prime contracting procurement process would leave them open to exploitation from larger rivals.

MoD construction procurement arm Defence Estates this week announced a new model by it will negotiate with only one player in the supply chain. This will see small consultants, contractors and facilities management firms forced to join consortia if they want to win work.

One leading contractor told NCE: 'I am concerned we're going to be steered too much by the prime contractor and lose autonomy through lack of direct access to client.'

His worries were echoed by a consultant who feared alliancing with major contractors would yield only short term gains: 'There is a danger that large firms are going to take us on to win one prime contract, suck us for knowledge and once they have grown the skills base in-house, drop us.'

But DE chief executive Ian Andrews insisted that small firms had nothing to fear as they would be able to diversify and develop relationships with a range of prime contractors as the initiative spread. 'DE is leading a Government initiative that we believe will have a knock on effect in the private sector. There is huge potential for diversification,' he said.

(See Client guide, page 24)

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