07 JAN 21
Is Infrastructure the Next Big Growth Area in the UK?

While the UK still doesn’t exactly have Covid-19 under control, at BiD Masters, we can see a glimmer of hope on the horizon. Make that two glimmers: they’re called Pfizer and AstraZeneca. Vaccination rollout is going to take some time, but even at this early stage, there are whispers that we’re on the road to recovery, in more ways than one.

Economic health may seem a way off still, but some sectors are likely to fare better than others. One we’re putting our money on is infrastructure.

Why Infrastructure?

Back in June 2020, the Infrastructure Projects Authority (IPA) released analysis of the National Infrastructure and Construction Pipeline focusing on the next two years. The pipeline covered £37 billion worth of contracts that are to be brought to market before the end of 2021. In all, 340 separate procurements were identified across more than 260 projects and programmes to deliver construction, repair and maintenance and consultancy. Can anyone spell “OPPORTUNITY”?

Of course, some of the high-profile projects have been on the cards for a while, like HS2’s Curzon Street station in Birmingham and the refurbishment of the National Portrait Gallery, but there’s more to it than that. According to the IPA, economic infrastructure accounts for more than half of the estimated value of planned procurements (worth up-to £22.3bn), with the remaining split between social infrastructure (up to £5.3bn), defence (up to £5bn) and regulated utilities (up to £4.7bn). All good news for the big players in these sectors.

Construction, from building to design and build and civil engineering, is looking good, making up over half of the work going out to market. Of the remaining estimated contract value, up to £11.6 billion is architectural and engineering services, up to £0.8 billion is research and development and consultancy services and up to £5.7 billion is for repair and maintenance services.

Let’s face it, big business needs this after a pretty dismal 2020.

What does this mean for SMEs?

That’s great for big business, but what about all of the SMEs that are the backbone of the British economy? Repeat after me: “Supply Chain Opportunities”.

Big contracts may target big businesses, but those business rely on supply chains comprised of players of all sizes.

We’re not saying it’s easy. Despite a government pledge that at least 25% of all central government contracts should be awarded to SMEs by 2015, according to a recent Construction Online Survey, 60% of participants find it difficult or extremely difficult to source supply chain opportunities. The Federation of Master Builders (FMB) published research suggesting 41% of construction SMEs are successful only 10% of the time or less when bidding for public sector contracts and 55% of firms have seen their success rate decrease over the past five years.

What are the barriers?

There are multiple reasons SMEs struggle to get involved in government tenders. Here are just a few:

  • Framework agreements: have increased and many SMEs struggle to get onto these frameworks.
  • Public sector contract visibility: The Government publishes a pipeline document that provides detailed projections of public sector spend on central government construction contracts, but the projects are often too large for SMEs to consider.
  • Portals: there are multiple portals outlining opportunities but finding the opportunities across these disparate sources and assessing the win probability takes time.
  • Tender documents: PQQs, RFPs, ITTs and ITNs are complex.

Where should an eager SME start?

Not all is lost for an SME that doesn’t know where to start and doesn’t have the resources to pull together a bid team. There are a few simple steps to take to get on the procurement path:

  1. Bring in a bid consultant to workshop the what, where, how and why. Share your company’s strengths and weaknesses, experience and business goals, and get some advice on what opportunities might be right for you, where to find them, how to get started and why it’s worth doing (as well as why some opportunities are not worth doing).
  2. Register on all of the procurement portals, including the new Find a Tender website that has replaced the OJEU, and set aside time each week to assess the most promising opportunities.
  3. Build a relationship with a bid agency that can flex to your needs and provide the expertise you need at a cost you can afford. (BiD Masters is happy to discuss this with you. Contact us here).
  4. Budget for bid support. There’s no point in submitting a weak response to a tender. Only submit if you think you have a chance of winning and get the help you need to craft that winning response. You know you can do it, but you need to be able to demonstrate that in writing.
  5. Learn from your wins and losses and build on your experience. With a little planning and a lot of effort, 2021 could be your year to shine.