Take our survey to reveal the true extent of post-tendering negotiation and price-cutting.
If you are young enough to have Pokemon Go installed on your mobile phone; young enough to consider Kanye West a musician; or if you are young enough to believe premiership footballers to be style icons, then allow me to lay some wisdom upon you.
There was a time when a client would seek tender submissions from a number of demolition contractors; compare them for suitability and value; make a choice; and then stick with it. Weird, huh?
That process still exists but it is now regularly blighted by a further round of post-tender negotiating, haggling and wrangling in which the demolition contractor effectively starts to hand back great big lumps of his hard-earned profit margin to satisfy the insatiable greed of the client.
In addition to credits against scrap and recyclable materials, demolition contractors are increasingly forced to sharpen their pricing pencil post-tender, eroding their profit margins and – effectively – becoming the authors of their own decline.
Of course, this “value engineering” process exists in other market sectors. But nowhere is it as endemic and all-pervading as it is in demolition; an industry sector in which risk is a key component in the pricing of any job.
So where do the savings come from when a client starts to whittle down a supposedly agreed tender price? Well, it’s not wages – They are fixed. It’s not fuel costs as they are beyond the control of the demolition contractor. And it is not insurance, pension contributions, national insurance, haulage or any of the plethora of other unseen intangibles that eat away at the demolition man’s bottom line.
All too often, this margin shaving is met with cutbacks in expenditure on supposed luxuries like training and equipment with contractors doing just enough training to get by, and replacing equipment less frequently than, perhaps, they might like.
Of course, this is the law of diminishing returns made real and, ultimately, it is the client that will suffer from having a contract carried out by men that are not as well trained as they should be using equipment that is, perhaps, past its sell-by date and – therefore – more likely to break down. Ultimately, clients run the risk of saving money at the expense of safety.
Despite all this, it remains an issue that dare not speak its name. Contractors are afraid to speak out lest they find themselves blacklisted; and no-one seems prepared to make a stand against this ill-advised penny pinching.
But we will. If you have any examples of clients forcing you to jump through post-tendering hoops merely to keep a job you already won fair a square, we want to hear about it. We will gladly protect your anonymity and that of your company or organisation.
So if this is an issue you have encountered, please take a moment to complete our (very simple) online survey. It will only take 30 seconds of your time and it might (hopefully) shed more light on the true scale of this problem.
Click here to take the survey.
We will report back soon.
