News

Large firms don't have the skills to take SME work

2 December 2011

Martin Chambers, Shaylor Group

There has been much talk about the big operators moving into the smaller contractors’ market place whilst the competition for construction works remains intense. That’s nonsense says Shaylor’s framework director Martin Chambers.

It is a much hyped threat that the big boys will gobble up all of the work, traditionally undertaken by SMEs, as competition hots up and in some cases has been blown up out of all proportion.

The large contractors are kidding themselves if they think they have the skills and the expertise for small and medium sized jobs.  The reality is that they just aren’t structured to manage direct labour forces or to get right alongside the local client.

Smaller and regionally based contractors have extensive local knowledge, great local purchasing credentials, are very strong in their own patch and most importantly of all have an association with the communities within which they operate. 

There is a much greater synergy and understanding between small and regional contractors and their subcontractors than there is or will ever be between a large contractor and the same sub contractors.   The big contractors are often a much more corporate body that lacks understanding of what makes a small or micro business tick.

An SME contractor will have invested heavily in developing a supply chain that is trusted and well proven and that supports and believes in their own values.  These close relationships benefit those involved and the client as they produce harmonious working relationships that get the job done right first time.

Many clients understand and recognise the skills and attributes that a local specialist contractor brings to the party but others will always want to be associated with a ‘big name’.  This is often for the wrong reasons, maybe prestige, ego or a misguided believe that they need the corporate covenant of a mega player.  These clients need to look beyond the marketing fluff and fear of failure to understand what it really is they are buying into.

The government could do much more to assist SME during these difficult times.   The government’s construction advisor Paul Morrell is happy to communicate the strategy that sets a target of 25% of all government procured orders to go to SMEs.  However when you look at the detail they are proposing  no material change in that they expect the big contractor to cascade this percentage of work down to a smaller contractor.  This agenda is just business as usual and will do nothing to improve the lot of the SME, what a terrible waste of an opportunity.

In my view this does not address the real issue of encouraging and supporting engagement direct with small and regional contractors that are capable of delivering projects on time and within budget.

It would help if the government genuinely engaged more with the SME community and was open and honest about what really lies behind its grand statements and gestures.  Without such honesty their gestures are actually just worthless platitudes.  What they need to do is visit some of the real constructors around the regions to talk about the issues and how they could be resolved.  So come on Mr Morrell we are here and we are willing to explore with you how government can truly contract with SMEs.

Comments

I was a self employed surveyor who has over the years worked for numerous local authorities. The trend seems to be towards larger consultancy companies. One Council I worked for employed good local consultants who were local often gave advice for nothing and were very good. The council in question was instructed to go to tender for consultancy work. All our previous consultants were rejected on the ground of having insufficient turnover.

Eddie Monk, 2 December 2011

Leave a comment