Tackling the M&E knowledge gap in the framework world
With M&E works normally being undertaken by a subcontractor, these professionals traditionally hold a position within wider supplier chains. However, particularly when awarded work via a framework, M&E organisations can also hold a project lead role. A knowledge gap in this market is now emerging when it comes to these businesses maximising frameworks and resources. Here, Rebecca Oglesby, Framework Manager at Pagabo, reflects on this pattern being observed and how it is leading to missed opportunities.
Mechanical and electrical (M&E) organisations provide what can be called by some ‘the lifeblood of built environment projects’, providing buildings with the ‘power tools’ to run, they hold a vitally important position within the wider construction industry. Indeed, the M&E contracting market in the UK is worth around £20 billion and makes up almost a fifth of the whole construction sector’s GDP.
However, while the nature of the works mean that firms are usually appointed as a subcontractor, this is not the only route to appointment. With many public sector organisations seeking greater assurance on quality and security of the companies they appoint for projects – and greater certainty on quality delivery – there is an uptick in appointments via frameworks, which position M&E organisations in the lead role.
Understanding frameworks
The biggest trend emerging is that the M&E market’s understanding of frameworks and how to maximise their opportunities is at a different maturity point than other areas like major main contractors. This is not hugely surprising when examining the difference between these groups, particularly regarding overall experience of using frameworks – with M&E offerings much newer to the market in the grand scheme of things compared to major construction works.
Another element of difference is the M&E market having a higher level of SMEs. It is traditionally main contractors that have a better understanding of procurement, along with having more resource for bidding, both to be appointed to and for jobs through frameworks. This is a reasoning for framework providers like ourselves reserving a certain percentage of supplier positions specifically for SMEs, making sure that ample choice is there for clients and ensuring that smaller businesses are afforded the same opportunities as larger ones. Transparency is key here, along with a focus on quality over price – and indeed around three quarters of the suppliers on our own M&E offering are SMEs.
Being one of the UK’s largest framework providers we often see a lot of crossover with businesses being across various frameworks thus creating an improved understanding, but with a niche service offering like M&E, this isn’t the case.
From what’s being seen, there is undoubtedly a correlation between business size and a lack of understanding of frameworks mechanics. Part of the provider’s role is to work closely with our suppliers to truly understand how to maximise the opportunity from appointment. Frameworks are not a guarantee of work, but a vehicle to accessing it. It isn’t a case of just bidding and watching the work fly through, it’s about relationships and how you very much get out what you put in. Whether that be from direct award or further competition across framework suppliers.
All of this is why changes in the forthcoming Procurement Act to increase transparency of pipeline opportunities is so important, helping to level the playing field across businesses of all kinds when bidding resources can be planned ahead of time.
Common misconceptions
False impressions naturally go hand-in-hand with a lack of understanding, and this is certainly the case here. As well as maximising the opportunities through frameworks, there is clearly a knowledge gap in the actual mechanisms too.
One such aspect that can cause confusion is framework hosts, which are typically public sector organisations. Frameworks can be managed by public sector organisations themselves, or by specialist organisations like us at Pagabo. In those cases, the framework is managed by the specialist on behalf of the public sector body, which holds the ‘contracting authority’ role – to which a percentage of fees from projects through the framework will be returned to the public organisation in the form of rebates.
When it comes to frameworks and project fees, again transparency needs to be top of the agenda for everyone involved. For ourselves at Pagabo, our fees are completely transparent and clear for all parties, and only become chargeable when work is underway.
Securing work when on a framework
Businesses often think that once appointed it becomes a waiting game and jobs will fall into their laps, but this isn’t the reality. As mentioned previously, you get out what you put in.
A supplier position on a framework will put you in the shop window, but then it’s a case of doing all you can to become the most appealing choice with the bids put in for projects. This means presenting the best options to meet what a client wants to achieve with a project, aligning any bids to the desired outcomes – and putting quality and social value as core focuses should always be recommended.
It’s about building relationships, networking and bringing everything together that makes sure your business and the great work you’ve carried out is front and centre to those making the final decision for the next potential job.
Frameworks offer those in the M&E sector an opportunity to not only increase their project pipeline, but also improve their understanding of the public sector. The utilisation of frameworks will allow these businesses to think and act like a main contractor and effectively have more control of the work they carry out. Those that see an appointment to a framework as a step in the right direction, as opposed to the final destination, stand a much better chance of turning it into a revenue stream.
Framework appointments are only the first step – and working with the procurement specialists managing framework agreements to make the most of those forthcoming opportunities, enhancing the knowledge within internal teams and allowing to allocate the right resources will push a greater level of success.