The most extensive survey to date of the cost of pre-qualification in the construction industry has revealed that waste associated with this process amounts to almost £40 million a year and this is just for the specialist engineering sector. This huge waste of effort and resource is the result of firms being required to join multiple pre-qualification schemes in order to be eligible to bid for work.
Larger firms may have to belong to as many as 20 schemes run mainly by commercial operators. There is no evidence of any added value to clients of all this activity.
606 firms responded to the survey carried out by the Specialist Engineering Contractors (SEC) Group. The responses were analysed by independent consultants Metra Martech. On average each firm belonging to SEC Groups member bodies spent 9 days a year on paperwork relating to the different schemes. This comes to a total of 60,000 days a year for SEC Group firms. In announcing the results of the survey the Chairman of SEC Group, Trevor Hursthouse, commented: "The overriding message to come out of this survey is that the process of pre-qualification must be rationalised. The waste associated with the duplication of effort is unacceptable. If we can eradicate this waste it will help to promote a more sustainable industry whilst in the longer-run the industrys clients can benefit from having annual savings of £40bn".
Trevor Hursthouse added: "The public sector is a major culprit. While we are pleased that the Government acknowledges that prequalification is a huge problem we need firm Government action to resolve it. To that end, we support the work being carried out by the Department of Business, Innovation and Skills with the support of the Office of Government Commerce to produce a common standard for pre-qualification. But to make real progress with this issue OGC needs to actively support and implement this standard throughout the public sector and right through the supply chain". Tim Keeler, APHC Vice Chairman comments "Whilst pre-qualification is a substantial burden on our industry, I am in no doubt of its importance.
It would be easy to label pre-qualification as an unnecessary cost, which is reducing the efficiency of our industry, but it is an important tool to measure competence of a company and its staff and has secured the success of many projects. The issue that we face is the number of schemes which demonstrate no unity to each other. The answer is the rationalisation of these schemes. With the backing of the Government, Safety Schemes in Procurement (SSIP) is aiming to do just this and I look forward to their success."