Posts Tagged 'Temporary Recruitment'

Double Dip Time?

Here we go then….the Construction Products Association is saying we are in for a rough ride again this year and next year too. They predict that this year output will fall by 0.8% and next year by 2%. This will make it the most miserable time for many of us if that’s true.

‘The Mail’ on line even predicts the same (but don’t they always) stating that construction output in the three months to end of February fell a massive 18.3%, fuelling fears that things are about to get even tougher as this is all before the government’s austerity measures kick in.

The IMF has also downgraded it’s 2011 growth forecast for the UK to 1.75% (it’s third downgrade this year)

Yet here is some contradictory evidence.

Take a look at this from the Train4TradeSkills News section. They quote from the Markit/CIPS UK Construction PMI Index ‘UK construction companies reported a strong end to the first quarter, with activity rising at a similar pace to the eight month high recorded in February’.

So what’s going on?

What do you think?

Is it all doom and gloom out there or are there chinks of light for you and your business?

I’d be really interested to hear your views on this. 

I know for us it’s one hell of a rollercoaster ride, one moment you are really busy and the next you are in the doldrums, but then that’s the joys of being in this game isn’t it?

And on a lighter note perhaps we should all go to Brazil and build Lego towers instead…

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………..

So where is the future for us?

Let’s start with Professor Brain Cox and his wonderful programme on Sunday evenings Wonders of  the Solar System, all burnt up in the sun is the most likely outcome but that’s billions and billions and billions (or whatever he says)…….of years away.

By the way is it just me or does he send you to sleep too, and you have to watch the programme again to understand it?

Well enough of that, we did our annual State of The Economy Survey again this year and one of the questions we posed was where do you think the work is going to come from this year?

And without giving names of anyone away, I thought you all might like to see the most popular answers we received and whether you agree with them or not, so here goes…..

1. High End Residential –and/or high income private clients with money to invest
2. Refurbishment – all sectors
3. Retail
4. Schools, including Free schools
5. Student accommodation
6. Hotels
7. New office developments
8. Health
9. Regeneration of brownfiled sites
10. Infrastructure – power, rail, utilities

Now if any of these rock your boat or are in an area you were or were not thinking about you’ve got some like minded people out there. The wittiest comment of them all however I liked was ‘Finding oil!’

All I can say is the very best of luck for what is going to be another challenging time ahead for everyone associated with the construction sector

If you missed the link above full details are on our website www.gf-partnership.co.uk/news/

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………..

Measurement is for Dummies!

Shhhh! Here’s something that we’ve kept secret over the years:

We don’t mind teaching people how to measure properly (if you’re interested that is) to SMM7 standards.

Shocking I know isn’t it!

You see the thing is the more people that know the better the standard will be in the industry for us all.

A bit of an outdated view perhaps?

Well what is the first thing anyone wants when they price a job? A set of quantities, what else would you need? And the thing is it’s getting harder and harder to find people that can do it.

So here’s the deal (I’m sure that’s a line from an advert, and this is one by the way) we recently did a training session for a contractor for his staff on groundworks. We used a sample of a current job they were looking at as the basis of the session.

Result:

They liked it

We liked it

We taught some younger folk the rudimentary elements of taking off, and they also found some mistakes in the tender they were looking at – potentially we saved them a lot of money as a result!

Everyone happy!

It’s my favourite topic at the moment, measurement or the apparent lack of it by the RICS in encouraging it to be taught. If you saw their recent training brochure dated January 2011 there’s absolutely nothing included for it. Unless of course you include (no offence guys) teaching estate agents how to measure gross or net internal floor areas for the sum of £295 per person! Now how on earth are all these new recruits going to know how to do things? Rely on the Universities? But they aren’t teaching it! It’s dreadful…

So for those of you who want a little taster of the sort of thing we can offer, have a look at this link to our website on the basics of how to measure excavation and earthworks – I hope you enjoy it!

Advertisement over!

Pitfalls of Design and Build

I was reading the article by Rudi Klein in building magazine at the weekend (yes I still subscribe and get a paper version, old fashioned I know!) and his article HOW TO STAY OUT OF HELL about design risk.

Have to say he has a point doesn’t he? Why as an industry do we separate the design process from construction? As he says any manufacturer worth his salt wouldn’t separate design from manufacture.

But don’t you find that the design and build contract process is being abused?

Here’s a recent example to mull over….

Contractor calls our office: ‘I’ve got a potential contractual problem on a job, can you help me please?’

GFP: Well I’d like to think we can, tell me more….

Contractor: I’m trying to handover a job, and I’m having difficulties because the building was originally built in the wrong place!

GFP: Oh, now that is a problem, tell me more….

Contractor: You see we set the building out as the drawings and documents, all checked out ok on site, and then we looked at the proximity of some overhead power lines to where the imaginary building (as of then) would have been built. And well quite frankly we thought it wasn’t right.

GFP: What did you do? Tell me more……

Contractor: Well we sort advice from the design team who checked everything over and we were told we had built it in the right place. All as per the contract drawings. Except that nobody had considered the implications of the overhead power lines and the proximity to the building.

GFP: What happened next then? Tell me more….

Contractor: The design team worked out that we had to move the building. So we were instructed by way of a priced and agreed variation under the contract to carry out some remedial works so the building could be built in a different position (now not as the approved planning drawings). This we did and finished the building, albeit a bit later than scheduled. But as it turns out it was only relatively minor works to what we thought could have been a major problem. So we all felt quite pleased we’d come up with a good solution.

GFP So what’s the problem then? Tell me more….

Contractor: The client says it’s all our fault and won’t accept the building.

GFP: Why is that I don’t understand? Tell me more….

Contractor: I forgot to tell you it’s a design and build contract, the design team have been novated to us and as far as the client is concerned we are responsible for all of the design and the risk that goes with it.

GFP: Now I understand, I’m afraid we’ll have to look at what you’ve signed up to. Send us over some documents……

So who is right, and is it the Contractors fault?

To be continued……

Cut Throat Tender Pricing….

So another year begins and listening to all the pundits this is going to be tougher than the last one.

But what of tender prices? Inflation is allegedly running at near 4% (although it feels a lot higher to me) so tender prices on the up? No, not a bit.

So whats happening?

Well I wonder how many tender bids are going in at lunchtime today that have been priced below net cost? I’d never be able to prove it but I suspect nearly all of them.

So why is that?

Well as we know there isn’t a lot of work around, and there’s probably still too many of us chasing that amount of work too…and clients know that. So more of you are being asked to tender…and do you consider you are pricing against like for like competition? No, is the most likely answer.

So what to do?

Go in as cheap as you can, beat the opposition, keep your team intact, gain a contribution to your overhead, pray the job goes well, there are lots of variations and changes to claw some money back, over value the job on interim valuations, screw the supply chain further (after all they never put in a sensible bid at tender stage, and if they did you ask them to knock it by 15-20% anyway), and oh that the client still has the funds from his finances to pay you!

But consultants you’re not helping either.

Don’t stuff your tenders with huge provisional sums because designs haven’t been resolved or you haven’t made your mind up, or the client hasn’t. Don’t include provisional quantities or items, keep your specifications tight and detailed to what you want. Don’t send out vague, confusing, incomplete, conflicting designs, drawings and information as the contractor will see this as a great opportunity. And please stop issuing tender addendums when you’ve only just sent out the documents, send it all out once and be done with it!

And finally don’t burn everything you can possibly think of and put it on a cd, as all the contractors do is the same, but pass it on to the supply chain. And what happens? The man in a van gets it, doesn’t understand it, either doesn’t bother with it, puts in a price because he thinks he understands it, only to find he’s committed to something he doesn’t understand.

Then  he doesn’t do the job and leaves everyone with a problem.

By way of an side, but on the same vein, we’ve got a project in the office that we are doing the bills of quantities for the contractor. Tucked away in part of the tender documents there’s a clause that states if your bid is above £7.2M don’t bother sending it in! (The job has already been tendered last year at around £8M, sent out again with no design changes, what do they expect I ask?)

So clients don’t expect the impossible, but if you do ask for it be warned as if you step out of line, dither over a decision, play with the contractors cash flow expect the worst as it will come back and bite you!

Thanks to John Langford for his tweet @ConstructionMM for being the inspiration for this.


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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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