Civils contractors want fewer open tenders
Civil engineering contractors firms are calling for improvements in the way that clients procure their services.
In particular, they are pressing for a reduction in the growing use of open tenders that they see as a key factor behind the rising cost of bidding for work.
Disproportionate quality bid requirements and poor tender documents are also cited as factors behind ‘escalating and unsustainable bidding cost’.
Over the past year, the Civil Engineering Contractors Association (CECA) has worked with its members to look at how procurement could be made more efficient. The full report will be published at CECA’s 20th anniversary conference later this month but the key findings are been revealed to day
CECA has identified nine common procurement flaws that should be addressed to make savings for both contractors and their customers.
- 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. This saves on the administration associated with prequalification questionnaires (PQQs), but runs the risk of very large tender lists which deters some contractors from bidding. CECA is therefore calling for open tenders to solely be used where doing so can be demonstrated to be the most effective way of engaging suppliers.
CECA 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% 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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This article was published on 10 Nov 2016 (last updated on 11 Nov 2016).