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Federation of Master Builders Report: What SMEs Need to Know

January 30, 2014

Discover how the Federation of Master Builders are planning to improve the process of completing pre-qualification questionnaires for SMEs.

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In February, the Government pledged that at least 25% of central government contracts should be awarded to SMEs by 2015, but a subsequent report from the Federation of Master Builders shows that as many as 40% of construction SMEs lose out on 90% of the public sector work they bid for, while over half of SMEs said they have seen their success rate fall when bidding for public sector contracts over the past five years.

The report, Improving Public Procurement for Construction SMEs, identified the expensive and resource-intensive process of filling in pre-qualification questionnaires (PQQs) as one of the main factors impacting on SMEs’ ability to win work on government frameworks.

Almost half of survey respondents described their experience of completing PQQs for public sector clients as being either “quite negative” or “mostly negative”. Of these, 27% said the single biggest issue they face is the length of time it takes to complete the forms, while 25% said the complexity of the PQQs and the level of detail required posed the biggest issue.

It’s a damning indictment given that back in February 2011 Whitehall announced a plan to eliminate PQQs for all central government procurements under £100,000, as well as require firms to submit just one set of pre-qualification data for all procurements in common commodities.

PQQs currently in use by public sector clients include Constructionline, the Contractors Health and Safety Assessment Scheme (CHAS), Safe Contractor, Exor and Achilles, but there are many more in circulation used by local authorities and others.

One FMB member operating in Barking highlighted the burden PQQs filling out so many forms can put on small firms, saying: “Our company employs four administrative staff who spend much of their time completing PQQs and therefore we are relatively successful, but many SMEs do not have this type of office-based support. Also, when our company isn’t successful, it’s rare for us to receive feedback from the public sector client, which makes things difficult when you’re trying to review your approach and improve your chances of success next time around.”

What next?

To improve the situation, the report recommends that:

  • All public sector clients, including local authorities, should use PAS 91 (2013) standard PQQ document produced by the BSI, to be used by all public sector bodies carrying out construction procurements.
  • Central Government should properly promote to all public sector clients the benefits of using PAS 91.
  • Public sector clients should not request a firm to complete a PQQ more frequently than once per year, unless there is a significant change to the circumstances of the firm or additional information is required due to the specific nature of the contract.
  • The FMB should develop guidance and associated training to help members through the PQQ and tendering processes.

One example of best practice is NEPO, which represents the 12 North East unitary councils, and recently worked with the Federation of Small Businesses and the North East Chamber of Commerce to simplify their PQQ. This is now online on the NEPO Portal enabling suppliers to input the required information, upload certificates, with their responses stored for future use.

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