Contractors snub ‘unusual and unappealing’ council tender

Graham has been granted a 16-month extension to a local authority building-services framework after a lack of interest from potential bidders for its replacement.

A group of West Midlands local authorities, led by Solihull Council, was forced to revise its offer after its initial terms were deemed “unusual and unappealing” by contractors.

The single-company framework, for an initial period of seven years with an option to extend for up to an additional three, would have seen the successful bidder supply building repairs, maintenance and construction services to the councils.

The current 10-year contract, held by Graham, was due to expire on 30 June. It had been advertised as being worth £400m, but has not yet generated that value for the contractor.

Solihull Council said the 16-month extension was needed after potential bidders gave its procurement the thumbs down.

“Consultation with a broad range of the supplier market was undertaken who expressed that the upturn in market conditions brought about due to recovery from COVID-19 has led [to] a more selective and risk-adverse [sic] approach to tender opportunities,” it said in a tender-modification document.

“In addition, despite the model of contract being similar to the current contract which when tendered had generated considerable interest, in a recent tender the contract was deemed to be unusual and unappealing by the companies consulted.”

Solihull said it would extend the current contract to October 2024 and use the time to develop a proposal that would be more attractive to the market.

“The authority intends to conduct a thorough market engagement during the period of this contract extension in order to prepare and present an opportunity that will be of interest to the wider industry to establish a long-term partnering agreement, and at a time when the market conditions have stabilised,” it said.

Although it did not give specific details of the issues, the authority said that the need for the extension had been brought about by the pandemic and its impact on the industry, which a diligent contracting body could not have foreseen.

It added that the realised value of the framework to date was lower than advertised and the cumulative value, including the extension, would still be lower than the advertised £400m.

Neither Solihull Council nor Graham had responded to requests for comment at the time of publication.