Defence Estates has approved radical plans for new procurement contracts as it tries to meet far stricter spending requirements.

Spending under the new capital works framework is expected to shrink to as low £240m a year, although most optimistic DE forecasts put it as high as £475m.

Despite cuts DE is on the hunt for five firms to join a new nationwide capital framework, worth from £250m-£400m over four years, which will cover major schemes up to £50m.

Only firms turning over more than £70m a year will be able to prequalify for the agreement.

To handle smaller new work packages of up to £12m, the military procurement body has broken work between six new regions.

The new set up has been installed to raise competition and firms will need to show they have turned over £20m during the last three years to be eligible to bid.

These regional frameworks will, however, provide opportunities for SMEs below that threshold to be considered as potential subcontractors.

The work put through the six regions – South West; South East; West Midlands and Wales; East of England, North and Scotland – will be worth between £100m – £250m over the four to seven year lifetime of the framework.

David Olney, the Deputy Chief Executive of Defence Estates, said: “In these financially challenging times, we are looking to suppliers to deliver value for money.

“We recognise the potential for smaller enterprises to contribute here, alongside larger national and multinational suppliers. That is why we are opening these commercial opportunities up to a mix of company sizes.”

Steve Rice, Head of the NGEC programme, added: “We have consulted widely with the DE customer community, industry and wider Government, and have concluded that we need to widen the scope for suitably experienced companies in the SME category to be involved in smaller construction projects.

“Irrespective of size or specialisation, future suppliers will have to meet MOD’s demanding requirements and will need to demonstrate innovation, enough flexibility to meet the evolving requirements of the Armed Forces, and a willingness to make a proactive contribution to energy efficiency.”

Interested firms have until 28 February to submit PQQs. For further information contact Wyn Evans, tel: 01213113740.

Contracts will be awarded to successful bidders by autumn 2011.

The other big potential framework in the pipeline is the National Housing Prime.

DE procurement chiefs are in dialogue with the sitting contractor responsible for the delivery of housing maintenance of Service Family Accommodation (SFA).

An evaluation of value for money is being made on various options, which include extending the current housing prime contract for England and Wales.

A decision will be made at the end of this month on how to proceed. If it is decided to recompete,
then it is expected that invitations to tender will go out in February 2011.

DE is also in the process of selection firms for its hard FM work, which will be slip across four regions.

The framework for Scotland is already out to bid with invitation to tender for the remaining regions due out over coming months.