Supplier cull leads to unhappy environment_2
19 July 2012
The Environment Agency (EA) plans to shave 20 per cent from its annual £130 million construction budget by slashing supplier numbers.
The Environment Agency (EA) plans to shave 20 per cent from its annual £130 million construction budget by slashing supplier numbers.
While the EA aims to develop long-term and risk-sharing “partnerships” with its suppliers in flood defence construction - currently comprising 40 consultants and up to 80 contractors - it wants to reduce the number it deals with directly. “We spend too much time sourcing, training and dealing with consultants and contractors. We need fewer and longer relationships,” said EA capital project manager Bill Grigg at an agency supplier conference. The EA has refused to say exactly how many suppliers will be cut or whether the changes will be made on a regional or national level. But small and medium-sized operators fear they could be squeezed out. Ronald Gardner, business development manager of agency supplier Westminster Dredging Company, said he believed smaller contractors had been “guarded” in their response to the EA’s move for fear of “having their cards marked”. “There is a fear that a lot of the smaller jobs will be grouped and embraced by the larger companies,” he told SM. Peter Andrews, managing director of EA supplier Jackson Civil Engineering, agreed. “As contractors, we have seen the desire for change from government ebb and flow, but big is not always beautiful. Some of the best delivery and service comes from medium-sized regional contractors.” In response, the EA has moved to reassure suppliers. “While not all work will lend itself to joint bigger projects, there will still be room for smaller players at a local level,” said Mark Yeomans, the EA’s head of procurement. The EA has been criticised for regional project management, excessive levels of bureaucracy and parochialism in its procurement practices. “I am frustrated by the number of small schemes, the fragmented work, lack of consistency and lack of central decision-making,” Grigg told delegates. Yeomans said that while he believed the agency was a “tough client to deal with”, the savings were achievable. “It’s true to say [savings of 20 per cent] may be aspirational, but we have cut costs by 10 per cent or £1 million on the north-east combined capital works project, so we feel it is possible,” he said. The Yorkshire flood defence project is being touted as one of five best-practice construction schemes that the agency has been testing internally. The average value of construction projects ranges between £500,000 and £80 million, and the agency currently has 600 live projects, including river maintenance and water sourcing.
While the EA aims to develop long-term and risk-sharing “partnerships” with its suppliers in flood defence construction - currently comprising 40 consultants and up to 80 contractors - it wants to reduce the number it deals with directly. “We spend too much time sourcing, training and dealing with consultants and contractors. We need fewer and longer relationships,” said EA capital project manager Bill Grigg at an agency supplier conference. The EA has refused to say exactly how many suppliers will be cut or whether the changes will be made on a regional or national level. But small and medium-sized operators fear they could be squeezed out. Ronald Gardner, business development manager of agency supplier Westminster Dredging Company, said he believed smaller contractors had been “guarded” in their response to the EA’s move for fear of “having their cards marked”. “There is a fear that a lot of the smaller jobs will be grouped and embraced by the larger companies,” he told SM. Peter Andrews, managing director of EA supplier Jackson Civil Engineering, agreed. “As contractors, we have seen the desire for change from government ebb and flow, but big is not always beautiful. Some of the best delivery and service comes from medium-sized regional contractors.” In response, the EA has moved to reassure suppliers. “While not all work will lend itself to joint bigger projects, there will still be room for smaller players at a local level,” said Mark Yeomans, the EA’s head of procurement. The EA has been criticised for regional project management, excessive levels of bureaucracy and parochialism in its procurement practices. “I am frustrated by the number of small schemes, the fragmented work, lack of consistency and lack of central decision-making,” Grigg told delegates. Yeomans said that while he believed the agency was a “tough client to deal with”, the savings were achievable. “It’s true to say [savings of 20 per cent] may be aspirational, but we have cut costs by 10 per cent or £1 million on the north-east combined capital works project, so we feel it is possible,” he said. The Yorkshire flood defence project is being touted as one of five best-practice construction schemes that the agency has been testing internally. The average value of construction projects ranges between £500,000 and £80 million, and the agency currently has 600 live projects, including river maintenance and water sourcing.
