Work from the £2 billion Priority Schools Building Programme could be shared by just half a dozen firms under plans being considered by the government reports Construction News.
The programme could be batched into five or six packages a year worth about £400 million annually over five years, says the magazine.
Industry sources said that three contractors will be shortlisted for batches of schools based on design bids for one or two initial schemes.
Once a preferred bidder is chosen for a batch of schools, the contractor will be expected to reach financial close on the initial schemes before submitting designs and reaching financial close on the remaining schools within each group.
Willmott Dixon’s head of education Peter Owen said costs will need to be capped.
Under previous procurement routes, it was not uncommon for companies to lose as much as £1.5m when they reached the final two bidders for schemes and fell at the last hurdle.
He said: “The construction industry will be asking ‘do we invest in such innovations as standardised designs or offsite manufacturing or do we spend the money investing in new markets?’.
“With the reduction of work and margins in the construction industry we need more efficient and cost-effective procurement now more than ever.”
Meanwhile, contractor consortiums bidding for work under the government’s flagship £2bn PFI schools scheme will not be told the targeted cost of schemes before they bid, reported Building.
The move, which is being advocated by government officials and is understood to be close to being approved, is designed to force down the cost of schools schemes under the Priority Schools Building Programme (PSBP).
Contractors and their design teams will be asked to bid on the basis of an “output specification” which will set out design goals, without guidance as to the earmarked capital cost or the amount of unitary charge they will be able to recover in regular payments from the client under the terms of their PFI contract.
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