Contractors hit hardest by BSF blow

Aaron Morby 12 years ago

Hundreds of thousands of jobs are expected to be lost as a result of the schools cuts.

Some of those hit hardest will be experienced in-house bid teams who have worked hard on proposals over the years.

What main contractors lose

  • Balfour Beatty Preferred bidder: £300m Ealing, £231m Derby, £175m Oldham, £100m Hartlepool. Shortlisted bidder £125m Worcestershire
  • BAM Preferred bidder £600m Somerset, £235m Camden, London. Shortlisted bidder £355m Coventry, £180m Stockton
  • Carillion Preferred bidder: £400m Durham
  • Interserve Preferred bidder: £150m St Helens
  • Laing O’Rourke Preferred bidder £270m Barking & Dagenham, £257m Wigan. Shortlisted £355m Coventry
  • Shepherd Shortlisted: £180m Stockton
  • Skanska Preferred bidder: £150m Essex. Shortlisted £1.2bn Kent, £200m Southampton
  • Wates Shortlisted: £200m Portsmouth, £200m Southamption

Contractors are also angry about the wasted expense of bidding and are seeking advice about recouping costs from the Government.

One told the Enquirer: “It is obviously early days, but we cannot be expected to foot the bill for millions of pounds of bid costs when the Government can on a whim cancel the project.

“They are big on detail about who gets cut but don’t seem to have thought through the compensation issue at all.”

Balfour Beatty and Bam Construction have been hardest hit by the savage cuts with around £1.6bn of pipeline bid work scrapped.

BAM Construct UK said ahead of Gove’s statement it would be better to save money by simplifying the procurement system rather than axing projects altogether.

“You could build a primary school for the price of what it currently costs to bid successfully for a BSF (project),” said BAM Construct design director Chris Gilmour.

Stephen Ratcliffe, director of the UK Contractors Group, warned about the extent of jobs losses

“Contractors will have to lay people off as no one knows the outcome of the review, so workers cannot be kept on. The industry needs clarity fast,” he said.

Carillion, which could have been hit badly, escaped the brunt of the cuts after reaching financial close on a number of schemes over the last six months.

Within the various local authority programmes at preferred bidder stage several projects have been left earmarked for further discussion about whether to proceed.

If a handful do get the go-ahead it may help to offset bid costs.

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