U-turn over ‘pay to bid’ framework proposal

A controversial proposal to charge suppliers to bid for work on the new North West Construction Hub framework have been dropped following protests.

The proposals were outlined at an event earlier this month hosted by the Centre for Construction Innovation North West at Cube on Portland Street in central Manchester. Suppliers would have paid £1,000 per lot to sit on the small or medium frameworks, with no guarantee of being appointed on any work, and £9,000 to sit on the large contracts framework.

One architect who attended the Cube event said: "We did a quick calculation and it would have cost us £39,000 per annum to pay to have the privilege of bidding for work – with nothing guaranteed. That's outrageous.

"Our concern was that there would be no incentive for the NWCH to have a shortlist of consultants, there was no idea as to how many consultants would be selected in the first instance so we were concerned it would be a long list to generate income."

The architect added: "Not surprisingly there was almost a riot and load of people walked out of the open day in disgust – hence the fee retractment."

Instead, the new plan is to charge suppliers a small administration fee of an undisclosed percentage of the contract when they win work.

The U-turn was announced in an email sent by the CCI two days after the open day event. It said: "The North West Construction Hub wish to announce that, as a direct result of the feedback and consultation that has occurred at recent open events, the proposed fee charging structure for the Professional Services Framework for the region will be aligned to the other NWCH suite of frameworks. For clarity this means that the proposed 'per lot' fee arrangement will NOT be administered. The intent is to administer a charge upon usage, which will directly attach to the projects awarded under the Framework and will arise at the point of award to be administered in collaboration with the commissioning Client."

The four-year framework will cover ten disciplines from project management to quantity surveying. There will be a total of 78 lots in the framework with discipline bands broken into small, medium and large contracts; up to £50,000, between £50,000 and £150,000 and over £150,000. Lots are also divided by sub-region for Greater Manchester, Cheshire, Lancashire, Merseyside and Cumbria. The framework is run by Manchester City Council, advised by CCI NW, and is open to local authorities and quangos across the region.

Andrew Thomas, chief executive of CCI NW, told Place: "In order to cover the cost of the overall management of the framework and re-procurement costs we thought it would be a good idea for prospective bidders to put money in upfront, rather than a fee for each project.

"This is not a new concept, having been used on other public sector procurements, notably the original NHS Procurement model.

"The plan was dropped after we conducted an open session and prospective bidders said that they did not like the idea. We're up for doing things differently, we tabled the idea in an open way and sessions are about getting it right for all of us."

Of the new proposal Thomas said: "The exact detail is not yet cast in stone. The charging will be in line with those applied to the NWCH frameworks that are in place already. This a transactional fee at an extremely small percentage value."

Steve Burne, managing director of AEW Architects and chairman of the Greater Manchester Chamber property and construction committee, said: "There was almost disbelief at having to potentially pay to not even get work but just to be on the framework. But most people, if they if they come out with a net gain, wouldn't mind paying a tariff."

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