Government urged to stamp out suicide bidding

Grant Prior 8 years ago
Share

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

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

Kier chief Haydn Mursell exits

Mursell resigns with immediate effect amid mounting shareholder pressure
2 hours ago

Digger driver destroys Travelodge in pay row

Site worker goes on rampage over unpaid wages claim: Video
10 hours ago

KPMG suspends Carillion’s lead auditor

Peter Meehan and three members of audit team suspended
24 hours ago

Bouygues to start work on 26-storey Bristol tower

Construction to get underway this month on city centre site
1 hour ago

Balfour ground engineering project boss joins Volker

Jane Towse-Laval joins Volker Ground Engineering as project director
2 hours ago

£100m Clydeside build-to-rent development gets green light

Developer to pick contractor to start work in third quarter
2 hours ago

Hunt starts for £25m Royal Vet College builder

Work due to start this summer on Hertfordshire campus hub
2 hours ago

Sanctuary and Galliford Try JV to start fourth major scheme

Around 375 homes will be built in Leamington Spa
2 hours ago

BAM bags £27m brace of Scottish healthcare projects

Work starts next month on Greenock Health Centre and Glasgow mental health campus
23 hours ago

Vital Energi lands £3.8m package from Berkeley

Major M&E infrastructure deal at west London site
22 hours ago

Boost your online presence – join the Enquirer Directory

New site for suppliers and buyers showcases products, services and latest stories
9 months ago

TCS to start northern apart-hotel and PRS schemes

Town Centre Securities to start Leeds and Manchester projects early this year
1 day ago

Hirer Plantforce saves over 100 Hawk jobs at Hinkley

South west hirer buys over 100 Hawk machines from administrator
1 day ago

Forecasters slash 2019 construction growth to 0.3%

Building contractors feel pinch as Brexit uncertainty drags on
1 day ago

Willmott Dixon wins National Gallery revamp

Latest London landmark win for interiors division
1 day ago

Serious Fraud Office launches probe into North West sites

Series of addresses searched over suspected fraud on developments in Liverpool and Manchester
5 days ago

20 consultants win £100m Homes England framework

Aecom, Atkins, Jacobs, Mace and WSP make new multi-disciplinary framework
5 days ago

Summer site start for £200m Birmingham mixed use scheme

Colmore Tang to build Connaught Square scheme featuring 27-storey tower
4 days ago

Hitachi halts construction work at Wylfa nuclear site

Japanese giant fails to strike funding deal with UK government
5 days ago

Build-to-rent home construction jumps 40%

Number of rental homes in planning jumps 10% to over 60,000
4 days ago

BAM wins £320m Scotland and North East railways deal

AmcoGiffen, Story Contracting and QTS also secure framework places
5 days ago

Galliard and O’Shea team up for £130m Nine Elms scheme

Plan for over 260 homes on one of seven plots at former Royal Mail site
5 days ago

Buyer deposits repaid as Manchester’s tallest tower axed

54-floor St John's Place residential tower pulled in face of cooling demand
5 days ago

Billionaire Warren Buffett targets UK construction insurance

Berkshire Hathaway Specialty Insurance enters market as contractors struggle for cover
5 days ago

Skilled trades pay rates hit £1000-a-week in Midlands

Self employed workers enjoyed wage rises of 6.7% last year
5 days ago

Kier boss leaves to become Rydon construction head

Mark Norris leaves operations director role at Kier after 13 months
6 days ago

Go-ahead for £60m Nottingham HMRC hub

Bowmer & Kirkland believed to be in line to build Unity Square offices
5 days ago

Crooked bookkeeper stole £100k from cladding contractor

Court hears how mother and daughter used company cash to fund their lifestyles
6 days ago

£50m stands approved for Lords cricket ground

Builder ISG to start in August on new Edrich and Compton stands
6 days ago

Roof trusses fall on labourer

Darlington Council fined for poor site management
5 days ago

Contractor services