Posts Tagged 'building'

Honest tendering

I’ve had a rest this week from my normal blogging and provided a guest blog for John Langford a good friend of mine.

it’s about, as the title says above………. Honest tendering.

It can be found at http://www.cmmuk.com/honest-tendering-derek-mynott

Tender lists, who cares?

Now this might start as a strange story, so bear with me, you’ll get the drift of my theme I’m sure.

Why is it, that assuming exactly the same product is available, if you went to buy it from say, Harrods as opposed to any other high street retailer such as Argos and the like, you’d expect to pay more for it at where?

Well Harrods of course, everyone agrees on that.

So far so good.

Then why is it that a current trend I’m picking up on is to line up the likes of Harrods and Argos against each other and expect Harrods to give you the cheapest deal? Now substitute those names with any diverging set of Contractors or Subcontractors or Suppliers you care to name. Oh and then also have a very extensive list too, don’t just go to Harrods and Argos. Now I can hear you all groan as you say we’ll never win that project with ‘X’ on the tender list they are ‘buying’ work all over, what an unfair listing.

Sound familiar?

What damage is this practice doing to the industry as a whole?

Well here’s my take on a bit of that.

Part of our State of the Economy Survey we carried out recently contained a question ‘Whats the single biggest likely area for costs to increase this year for you?’ We had the usual expected answers of fuel, steel, concrete and the like, see the recent building article we are living  in a materials world for more on that….…but, one of the other top answers was ‘the increasing cost of putting together a bid to win a project.’

Interesting.

Well we know for sure about that in a small way for our contribution of providing bills of quantities to contractors bidding on design and dump, errr sorry, design and build projects these days. Let alone the pqq’s that go before that, the subsequent bid team that is needed and the various documents that everyone seems to require for the bid and then no longer refer to for the duration of the project. As after all who considers those when ‘X’ has put in a bid so much cheaper than anyone else………you go with ‘X’ don’t you……… it’s such a bargain you cannot refuse it.

Now where does everyone think these costs end up?

Well on the face of it with the contracting party.

But in the long run?

Well the end user of course.

 What a waste of time, money and effort.

Who advises clients on this?

Well professional advisers naturally. So come on guys instead of lining up Harrods with Argos, make the competition realistic and keep the numbers bidding to a sensible list. Stand up to Clients who insist on having you compile unbalanced tender lists. You’ll be surprised about the outcome.

And a final thought, what practice came about as a result of extensive tender lists and contractors not wishing to decline a tender opportunity………..

Calm before the storm…….

I don’t know about you but we’ve been rushed off our feet since we came back after the Christmas break and things have only really just slowed down for us – producing boq’s for contractors that is. Time to draw breath we think. Conversely our Consultancy site based QS services has been at a low level of activity for quite a while now, everyone getting by the best way they can.

But is it just me, or is there something in the air………things are about to get more, dare I say sinister this year?

Buildings headline news of insolvencies being down in January compared to last year is more optimistic news – sad news for those 205 companies and all their employees mind, not a great start to the New Year for them.

But I think things are about to take a turn for the worse…….. (and I’m not the only one, take a look at Neil Edwards blog for some words of warning too)

Now I normally look on the bright side when I can, but I can hear too many alarm bells starting to ring now, meaning it’s going to get tough and nasty for us all. And soon.

Fuel prices, raw material prices, interest rates, extended payment periods, government spending cuts, increases in national insurance contributions….I feel like I could go on ……the thing is nothing is going to get any cheaper.

Where is the pressure for everyone?

To reduce costs, and we just cannot do it any longer…..…there’s only one direction for costs this year and that’s upwards.

What has everyone been doing this last year or so? Living off the higher priced projects on the past, and taking advantage of their supply chain reducing its costs over the same period.

What is happening now? Prices are still being submitted at low rates anticipating that things will be bought even cheaper later on.

The bad news………….It’s just not going to happen.

The supply chain is at rock bottom and cannot go any lower. Look also at the Construction Products Association recent press release ‘Sharp Material Prices Add to Construction Woes’. I predict some serious repercussions for lots of organisations as a result. So now is the time to be vigilant and if the bank says that client is a bad bet, you know what? They are probably right.

It really is the calm before the storm………..

Rebuilding Confidence… My take on the Comprehensive Spending Review

Being a pupil of a former comprehensive school I thought that I would be reasonably well qualified to comment on the comprehensive spending review, so here it goes…!

Having spent Sunday evening reading The Sunday Times, The Sunday Telegraph and Building Magazine, it’s difficult to compute all of the information being thrown at us and make sense of it all. It’s interesting to compare: The Times reads quite downbeat and negative, while The Telegraph is far more upbeat and positive about the opportunities that will be created. So much so, in fact, that they are even launching a campaign this week for Rebuilding Confidence! Ok so they carried two interviews with David Cameron and Vince Cable, but I do believe there is hope out there for all of us. Why? Well…

  • We’ve had four consecutive quarters of growth now.
  • Though 490,000 jobs are to go in the public sector by 2014-2015, this puts us back to around 2005 levels. Around four times as many people work in the private sector than the public sector.
  • BUT, 1.8m jobs will be created in the private sector according to the OBC (Office for Budget Responsibility) and 308,000 were created over the summer!

So what for construction…

  • According to The Telegraph, British Land has committed £600m to new developments this year, which is in line with pre-crisis levels. They also say rents are improving and occupiers are starting to take new space in  prime sites across the country.
  • Westfield shopping centre at Stratford also starts to deliver 1.9 million square feet of retail and leisure space for us to indulge ourselves in from February 2011 (well, the fit out works anyway).
  • In The Telegraph Cameron interview he is quoted as saying… ‘Crossrail is estimated to generate benefits of up to £50 billion, High Speed 2 could provide over £2 of benefits for every £1 spent, with the London to Birmingham line promising the UK as much as £32 billion’
  • In Building Magazine’s article So what’s left after the all the cuts?  James Wates, Chairman of the UK Contractors Group, said ‘…there are real opportunities for construction especially in transport and energy but also in education and health.’ Their report also seems to confirm that whilst spending will be curtailed the key message being taken is that Transport will be the seen as a key driver of economic growth (no pun intended).
  • Education is the bleakest spot for everyone in construction… But to echo a message I’ve heard from many Estimators over this period: Who seriously made any money at schools?! Enough said.
  • The thing that interests me most is the housing sector, as this has some interesting twists and turns to take. Is it the end of Social Housing as we know it? Well yes I think it is. But wasn’t it time for us to make some sweeping changes anyway?! A consultation scheme will be launched in November for the New Homes Bonus Scheme to be launched in April 2011, its aim being to bring in private sector funding on a much larger scale than ever before. I think its bold, but I also think it will create some great opportunities for us all. So get your thinking caps on and be creative and get involved I say. There’s more about this in Grant Shapps open letter that he tweeted on Saturday.

Now let’s hear what has to be said today by David Cameron at the CBI on growth, and also what The Telegraph publishes on Rebuilding Confidence…


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About Me

I’m now the Managing Director of Mynott Associates Limited my own specialist measurement business. I’ve been in the industry all of my life since I left school. My first job was with Bovis Construction as a management trainee where I trained to become a quantity surveyor. I’ve worked for contractors all through my career, I am FRICS, FCIOB and MCIHT qualified and act as an RICS assessor. I’m also a keen Arsenal supporter having followed them from a young boy

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