Government urged to stamp out suicide bidding

Grant Prior 6 years ago
Share

Civil engineering leaders are calling on the Government to stamp-out suicide bidding by not awarding jobs to the lowest quote.

money from flickr

The demand is part of a ten-point plan to reform public sector procurement published by the Civil Engineering Contractors Association today.

The association believes suicide bidding is the biggest blight on the industry today as contractors enter below-cost bids in a desperate attempt to secure work.

CECA said: “Below-cost tendering, known as suicidal bidding, is currently rife in the infrastructure sector as less scrupulous contractors bid at below sustainable levels in order to secure workload.

“This has obvious detrimental effects for all parts of the industry.

“Clients may find themselves with a contractor resorting to claims or corner cutting in order to make a margin on the project, or even an insolvent contractor if the ‘suicidal’ bidding acts as its name suggests.

“Suicidal bidding is encouraged by a public sector procurement process which still in many cases awards work to the lowest bidder, rather than the supplier who will provide the best value solution.

“CECA recommends that the government mandates a more integrated approach to construction, where delivery teams are chosen on the basis of quality, while being incentivised to make savings over the course of the contract.

“Future opportunities should be awarded to suppliers which have shown a track record of delivering quality while reducing costs.”

The Ten Steps To Smarter Procurement is designed to support the government’s own reform of procurement practice which aims to save up to 20% over the current system.

An announcement detailing these reforms is due in June.

CECA’s ten points for better procurement are:

1. Blocking ‘suicidal bidding’ through a move away from price-based contracting

2. Halting stop-start procurement

3. Improving the visibility of workload

4. Standardise pre-qualifi cation

5. Standardise references

6. Establish a new deal for frameworks

7. Increase early contractor involvement

8. Limit tender list sizes

9. Improve the quality of tender documentation

10. Fairer infl ation risk management

Alasdair Reisner, CECA director of external affairs, said: “That procurement practice has emerged as our members’ main concern, at a time of relatively high inflation and worryingly low workloads, is a striking indicator of how serious the problems have become.

“In good times costly and inefficient procurement was an inconvenience, but in today’s market, with razor-thin margins and savage competition, it really does present a real threat to the survival of many firms, as well as adding costs to already tightly stretched procurement budgets.

“This is a rare opportunity to improve industry conditions for private contractors and save taxpayers’ money at the same time.

“The government should seize this chance to cut unnecessary costs out of procurement and create better conditions for clients and contractors alike.”

Latest news

New Bovis Homes boss buys £1.24m shares

Greg Fitzgerald pitches into new job and snaps up 134,369 shares
7 hours ago

Multiplex turnover soars to record £1bn on tower boom

Pre-tax profit slips as builder's revenue jumps by two-thirds
14 hours ago

Groundworker killed by concrete drainage cover

Coourt hears how poorly planned lifting operation at school site led to tragedy
7 hours ago

Graham lands latest Manchester build to rent tower

Work to start this summer on 16-storey tower at Salford Quays
11 hours ago

BAM takes £30m Southampton Uni job

Contractor mobilses for Highfield Campus project
14 hours ago

Sisk set for £37m Sheerness steelwork clear-up

Isle of Sheppey rebar mill clearance plans advance
14 hours ago

Local construction firms demand fair crack at public contracts

North East SME group launches campaign to improve chances for local builders
14 hours ago

Small builders bullish despite rising costs

Rising materials costs and deepening skills shortages dampen optimism
15 hours ago

Roofing firms fined for skylight and snow dangers

Local contractors fined £66,000 each after workers put at risk
15 hours ago

Balfour bags southern England power line upgrade

Pre-construction works to start this year to refurbish five 132kV overhead lines
3 days ago

Atkins agrees £2.1bn takeover by Canadian group

Atkins and Fathful + Gould brands could disappear. Bosses offered £5m to stay on
4 days ago

Sellafield seeks 20-year construction partners

Procurement shake-up to see four long-term partnering deals for vast construction programme
4 days ago

First strike threat hits Hinkley construction work

Bonus row erupts just three weeks after first concrete poured
4 days ago

Construction VAT fraudster ordered to pay back £2.2m

HMRC to claim back cash from crime gang leader who set up a web of bogus building companies
4 days ago

Cemex drivers ballot on strike action

Seventy four Cemex drivers to ballot for strike action over pay
4 days ago

Willmott Dixon poaches Galliford Try northern ops boss

Operations director Andrew Hurcomb will drive expansion in Yorkshire
4 days ago

Paul Sheffield to join Royal BAM board

Former Laing O'Rourke md and ex-Kier boss joins Dutch construction giant
5 days ago

HS2 to make firms name all people involved in bids

HS2 to tighten bid disclosure rules after development partner fiasco
5 days ago

Betting Spy: FA Cup cheer for Spurs and Man City

Tottenham and Man City can land a 4/1 double while Everton look too strong for West Ham
4 days ago

BIM-ready Yorkshire builder goes under

Up to 60 job losses threatened in George Hurst & Sons administration
5 days ago

Leeds Council backs £35m Headingley stadium funding deal

June start set for new joint stand overlooking cricket ground and rugby pitch
5 days ago

Go-ahead for Oxford Balliol College scheme

Sports pavillion and student accommodation to be built around cricket pitch
5 days ago

Work up for grabs across Sussex for subcontractors

Meet the Buyer event in Brighton to highlight raft of opportunities: Register now
5 days ago

Europe’s tallest modular tower rises at Wembley

Modular construction scales new heights as final unit of 679 craned into place
6 days ago

Ardmore swoops on latest £80m Aldgate tower

Vinci understood to be have been originally lined-up for 21-storey apart-hotel job
6 days ago

Skills training plan for next generation of offsite workers

CITB set to launch courses for growing offsite sector
6 days ago

Go-ahead for £250m “triple towers” in Liverpool

Three contractors on shortlist as work set to start this Autumn
6 days ago

Fire hits London hotel under construction

More than 70 firefighters tackle blaze on roof of Ibis hotel in Ealing: Video
6 days ago

Bechtel named for HS2 contract after CH2M row

Second placed bidder Bechtel wins £170m phase two development partner role
6 days ago

Green light for Coventry 580-bed student tower

Crosslane's 19-floor Friar's Road scheme will be its first in the city
6 days ago

Contractor services