Scores of firms have expressed an interest in bidding for a lucrative five-year contract to carry out building work for West Midlands councils.
Almost 200 representatives attended an industry open day organised by Birmingham City Council, where plans to invite tenders were outlined.
The council aims to expand on its existing construction partnership, which has seen three firms share £850 million of work since 2004.
The firms – Thomas Vale Construction, Wates Construction and G F Tomlinson – won the right to carry out most of the council’s building work including a £400 million housing modernisation scheme.
With the contract coming to an end, it is proposed to set up a new construction partnership possibly covering all seven West Midlands councils.
The new body would also carry out routine repair and maintenance work as well as construction, putting the potential value of the contract at billions of pounds.
The proposal has attracted “considerable interest” from the construction industry, according to Steve Vickers, general manager of Birmingham City Council’s urban design unit. He expects the main tendering exercise to commence in February 2011.
Some of Birmingham’s Conservative councillors have expressed concern in the past about the principle of automatically awarding most council building work to the partnership rather than advertising more widely and accepting the lowest tender.
They question whether such an arrangement represents value for money for council tax payers.
But Mr Vickers insisted that giving work to the Birmingham Construction Partnership was a far more efficient way of awarding contracts than existed before 2004.
The volume of business undertaken by the partnership allowed the council to drive down prices and support small local businesses by sub-contracting some work.
A report published by the council last year suggested the partnership had saved taxpayers’ £120 million since it was formed by “ironing out inefficiencies, budget overruns and missed deadlines”.
Mr Vickers said: “Historically, Birmingham City Council had always undertaken lowest cost tendering which was proven to be inefficient and costly, in that approximately 70 per cent of projects overran in terms of cost and programme.
“This also led to many protracted contractual and legal disputes which took time and money to resolve.”
He added that Birmingham’s method of awarding contracts was recognised nationally having won a number of awards from the construction industry.
Mr Vickers said: “The Birmingham Construction Partnership has attracted widespread acclaim for its innovation and approach to collaborative working.
“The Office of Government Commerce and Constructing Excellence have showcased the BCP as an exemplar of collaborative working.”