Scotland Excel launches £1.5bn new build housing framework
A £1.5 billion framework has been launched for new build residential construction services in Scotland.
The ground-breaking framework is the largest ever to be developed by Scotland Excel and will help accelerate the delivery of 50,000 new affordable homes.
The Centre of Procurement Expertise joined forces with 11 Scottish councils to create the four-year framework to support the Scottish Government’s £3bn commitment to fund the building of 50,000 affordable homes, including 35,000 for social rent by 2021.
This investment is expected to leverage economic output of around £1.4bn per year, supporting up to 12,000 jobs.
The New Build Residential Construction framework, which went live on August 26, was developed to significantly reduce the time taken to procure the building of a range of social housing properties from contractors. The unique framework covers a wide range of property types including affordable houses, flats, residential homes, student accommodation and social rented or mixed tenure.
The framework was specifically designed to create opportunities for SMEs to participate. Companies could tender to build small projects of 1-15 properties with the choice of ‘build only’ or ‘design and build’ depending on their capabilities, and there are further lots for 16-25, 26-40 and 40+ properties. Companies were also given the opportunity to bid to deliver projects nationally or submit offers for specific council areas.
Councillor John Shaw, convener of Scotland Excel, said: “The £1.5bn New Build Construction framework is a major opportunity for Scotland’s councils and housing associations. The contract makes it easier for contracting authorities to engage with suppliers and deliver housing that benefits society.
“It covers all 32 council areas and supports the Scottish Government’s ambitious plans to build 50,000 new homes by 2021. The way the framework is designed means it will not only speed up the process, but it will also free up resources and finances that can be invested in employment initiatives, deliver community benefits and reduce environmental impact.”
Nineteen suppliers including 13 SMEs were placed on the £1.5bn framework, after a robust two-stage restricted procurement process. The suppliers are:
- Andrew Shepherd Construction Ltd
- Ashleigh (Scotland) Limited
- Bancon Construction Ltd
- CCG (Scotland) Ltd
- Central Building Contractors (Glasgow) Ltd
- CHAP Group (Aberdeen) Ltd
- City Building (Contracts) LLP
- Clark Contracts Ltd
- Cruden Investments Ltd
- McLaughlin & Sons Limited
- ENGIE Regeneration Limited
- Hadden Construction Limited
- JR Construction (Scotland) Ltd
- McTaggart Construction Ltd
- Mears Limited
- MM Miller (Wick) Ltd
- Springfield Properties PLC
- Stewart and Shields Ltd
- Urban Union Ltd
A 0.5% rebate has been built into the contract that will be split between the 11 funding councils and Scotland Excel. This will ensure the continued development of the framework and provide vital income into the public purse.
Local economic development and community benefits were paramount when assessing the submitted tenders. The use of local labour and materials is not only important to the local economies of the funding councils, but it is also a major environmental benefit and one that Scotland Excel encourages.
Councillor Shaw added: “The 19 suppliers on the framework represent a cross-section of the construction industry in Scotland today. Almost 70% are SMEs and all pay the Scottish Living Wage to employees as standard.
“If we can help to create jobs in the areas where the houses are being built then we’re not only contributing to employment opportunities, we’re helping to create communities.”
The framework allows for innovative construction methods including offsite construction and PassivHaus, creating greater flexibility for contracting authorities. The framework has also been designed to allow contracting authorities to easily select designs to accommodate a range of access needs.
Another innovation in the framework is the use of project bank accounts. Where selected, these support prompt payments to the supply chain, often within five days. In an industry where late payment is a key issue for subcontractors, Scotland Excel’s inclusion of project bank accounts and 30-day payment terms to help protect SMEs and sole traders are a welcome addition.
The pioneering strategy scored suppliers on subcontracting commitments to supported businesses and social enterprises. As a result, all 19 suppliers have committed to engaging with supported businesses or social enterprises when the delivery of work exceeds £1 million. This also extends to apprenticeships, graduate placements and opportunities for the long-term unemployed.
Scotland Excel will be officially launching the framework at an event ‘Accelerating the delivery of affordable new homes’ on October 8 at the Radisson Blu Hotel in Edinburgh, with Derek Mackay, cabinet secretary for finance, economy and fair work, as the keynote speaker.