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Scottish construction contracts are 'a lottery'

Scottish construction contracts are 'a lottery'
Bidding for construction contracts in Scotland has become a lottery, according to the Scottish Building Federation (SBF), which said that businesses are spending large amounts of money on procurement processes that they have little chance of being successful in.

Michael Levack, chief executive of the SBF, said that the latest Scottish Construction Monitor survey showed a true picture of what faces organisations in the sector.

The study revealed that confidence among businesses is at its lowest level, with over two-thirds feeling less optimistic about the next year when compared to the last 12 months.

Mr Levack added that he has heard employees say that they would have a better chance of generating revenue if they were to place bets at the roulette table, rather than attempt to tender for public contracts.

"The root and branch reform of construction procurement the Scottish government has promised is clearly long overdue. It's particularly concerning that so many small and medium-sized companies in the industry are avoiding public procurement altogether because they find the costs so prohibitively high," he noted.

"Scottish ministers have set great store by their commitment to give them greater access to the public procurement market. This survey demonstrates the urgent need to tackle sky high procurement costs if more smaller construction firms are to be persuaded of the benefits of tendering for public contracts."

Mr Levack said that the current procurement system is "broken" and Scottish ministers need to act immediately as the industry is heading into its second recession in four years. He noted that a fairer and more cost-effective access to publicly funded building contracts for firms of all sizes is needed.

Ken Macintosh, finance spokesman for Labour, went on to say that the Scottish National Party appears to be dragging their feet on the issue. He claimed that Alex Salmond (first minister) and John Swinney (secretary for finance and sustainable growth) have "shovel-projects" waiting in the wings, however they are not making it possible for Scottish firms to bid for the contracts.

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Date: 29/08/2012 12:57:00

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