Civils contractors attack rising bid cost “crisis”

Date: 10 Nov 2016

Civils contractors are calling for a procurement revolution to halt “unsustainable” increases in bidding costs.

Contractors are pointing the finger at the growing use of open tenders, disproportionate quality bid requirements and poor tender documents.

The Civil Engineering Contractors Association has now identified nine key problem areas:

  • Poor engagement with bidders
  • Too many bidders/use of open tenders
  • Poor tender documents
  • Disproportionate quality bid requirements
  • Frameworks that deliver less than forecasted revenue
  • Secondary competition in frameworks
  • Poor management of the procurement process
  • Quality of post tender feedback
  • Lack of enforcement of tender commitments

Open tenders allow any company to submit a bid for a project, without going through an initial prequalification process.

CECA said that although this saves on the administration associated with PQQs it runs the risk of very large tender lists which deters some contractors from bidding.

CECA is calling for open tenders to solely be used where doing so can be demonstrated to be the most effective way of engaging suppliers.

Head of External Affairs Marie-Claude Hemming said: “The way in which infrastructure is procured in the UK is in crisis with the costs of bidding for work challenging for the construction industry as a whole.

“Our research has found that the cost of tendering for a project is a significant proportion of any potential profit arising from its successful completion. This is not sustainable.

“To this end, we have worked closely with our membership to address the challenges faced, and we want to work with our customers to eliminate the costs associated with this bureaucracy, helping to support better outcomes for everyone and help meet the Government 2025 ambitions of 33 per cent lower cost.

“While there may be a case for open tendering in some circumstances, we want to ensure that the costs and potential pitfalls of this approach are well known prior to any decision by a customer to use this route to procure infrastructure.”



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