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………..

Doom and Gloom????

Cuts doom and gloom seems to be the theme of our industry right now or should I say the media in general, nothing like a good old moan from us Brits- even the weather is doing its bit for flaming June!

The thing that bugs me though is the scale of the figures and the fact that like most business around we’ve made massive changes to respond and we are still here alive and kicking ….

Now I’ve been trying to find some stats to back me up, and perhaps someone can help me here but I remember attending an event organised by the sadly now defunct Contract Journal magazine about the Olympics (only 787 days to go). The stat was it was around £9bn of work over a 5 year period and that this represented less that 5% of the total construction output at the time. But what is the total output of the UK construction industry? That’s the bit I couldn’t find. I did find this graphic showing what’s happening to GDP though – looks like things are on the up!

So my point is that there is all this talk of multi billion pound cuts and the dramatic effect it will have on us but I remain to be convinced. The percentage of actual reduction is not that huge. How many of you out there have made huge cost savings and or cuts to your personal life and or business beyond say 5%? A huge number of us I’d guess. So for the government to make savings in it’s wasteful expenditure of our money is a good thing. Surely?

Anyway if you fancy a new mobile phone you could always take a look at how things have come on since 1922. I wonder what they were saying ………

Election Brick Walls!?*

Is it me or does it seem that we are forever banging our heads against a brick wall and everything as a result is slowing down even more? And the wretched excuse everyone trots out is we can’t do anything because of the election? We are well used to oh it’s Christmas or oh it’s the holiday season or oh I can’t be ……. well you know what I mean.

Anyway I’m off to the Lake District this weekend for some walking and to visit some good friends of ours, he is the chief executive of the Holker estate up there and they own, amongst other business, Burlington slate so it will be interesting to catch up with him on how things are fairing for them.

Back to the politics though, did you see the debate last night, I didn’t realise that the Liberals wanted to put VAT on new housebuilding, I suppose no surprise that the Tories want to reduce the school building programme (guess whoever gets in will reduce that somehow) but did you also hear Gordon Brown say that the lack of housebuilding was the housebuilders fault! I just don’t know who to pick none of them particularly inspire me for the industry.

Have to say it’s getting all quite worrying about the economy if you listen to how Greece, Spain and Portugal are performing. Still on the up side we could be in for a good World Cup soon not many days to the kick off now. Lets’ hope their football teams perform just as badly as their economies!

Construction Loony Manifesto?

Today’s the day that the major political parties issued their manifesto’s for the forthcoming election, so what would we want in Construction?

Here are some thoughts of my own:

1. Get serious about CO2 reductions in existing properties, and give some incentives to the general public to make us do it
2. Reduce VAT on conversions/alterations to domestic work to 5%
3. Keep the momentum going in the Building Schools for the Future programme, don’t cut back
4. Cut regulations for private house building, give some relaxation to section 106 agreements and allow some flexibility for what a local authority really needs
5. Get serious about our energy infrastructure, gas and oil will run out eventually make use of the great intellectual talent that the UK has to offer and look at the alternatives available. We need to generate more power now. We need a joined up strategy and policy.
6. Get tough with companies that pay late, give SME’s some real power, stop letting big companies use little companies as another source of funding.
7. Stop developing Heathrow and build a new London airport in the Thames estuary
8. Build the high speed rail link from London to Scotland
9. Bring in decent transparent reform within the banking sector that we all understand, that enables banks to lend sensibly to everyone
10. Cut government waste

Now alternatively if you want something to make you smile take a look at the Monster Raving Loony Party Manifesto – there’s something in there for everyone!

What a waste?

Well I’ve saved my blog until today because I went to the game last night against Barcelona and what a game it was! We were outplayed from the start but you have to hand it to our lads; they did get back into it and Theo really did make the difference for us. At the end it was 10 v 10.5 men with Cesc limping around the pitch, but what an atmosphere! It was good to see Thierry back there too and he got a great ovation when he came on, then nearly broke through to score so we all started booing! He was the last man off the pitch at the end to rousing cheers and applause. A game like that makes it all worthwhile paying the season ticket fees. It’s a shame that Bendtner wasted such a good chance in the second half.

Speaking of waste… Next week I expect we will have the election to occupy the media, but I for one think that a lot of the stuff being said about government waste is valid. If the country was run as a proper business there would be far more cuts in government waste. How do they think companies like mine in the private sector survive? We cannot go out there and borrow money on the never never, the banks won’t lend anything; we have to make painful and hard decisions about people’s lives. I’m really undecided this time who to vote for; nothing inspires me about politics at the moment. Having said that I’m meeting someone today who is standing as an MP so I’d better be careful, as we may be able to help him in a business venture…