Opinion: Rok fallout could stem suicide bids

Grant Prior 12 years ago
Share

It’s difficult to talk about positives following the failure of one of the country’s best-known builders, but the collapse of Rok could help to slow the spread of suicide bidding across the industry.

Ridiculously low tenders from work-starved rivals are one of the biggest complaints today among contractors as companies fight dirty to win projects.

And an accusing finger is pointed at most clients who have abandoned all thoughts of partnering and collaborative working as they race after the cheapest price.

But the fallout from Rok has now seen public sector clients realise that the lowest bid can work out as a more expensive option in the long run if a contractor goes under.

Councils and other public bodies across the country have faced huge bills retendering jobs left half-finished in the wake of Rok and Connaught before them.

Both firms were accused by rivals of suicide bidding to win work while clients fell over themselves to snap-up their bargain basement prices.

Now Highlands and Islands Enterprise is taking an extra four months to take a closer look at the financial health of bidders for its £20m Inverness Campus.

The Scottish authority doesn’t want to get burned again by accepting a low bid only to see its chosen firm go under.

And with good reason too – Highlands and Islands chose Rok for a £32m framework deal just weeks before the firm imploded.

Other public bodies are expected to follow suit fearing a public relations disaster if they hand out contracts to firms who fold before projects are finished.

A more responsible approach to contract awards by councils could also benefit smaller contractors shut-out by the recent trend to bundle-up work in large framework deals.

The bigger packages may have saved cash through economies of scale. But if a firm goes bust the whole region is hit leaving a lot of embarrassed council officials and even more angry voters.

The lemming-like rush by public clients to chase the cheapest bid is understandable in the current climate to save cash at all costs.

But the whole concept is a false economy which harms everyone and causes ruin throughout the construction industry.

Rok was the biggest victim of chasing turnover rather than profit.

But now the aftermath from its demise could provide a rare chance to stem the tide of suicide bidding from swamping the industry.

Latest news

Administrator details confirmed at Southampton M&E firm

Begbies Traynor now in charge at Working Environments as suppliers face large losses
5 hours ago

Applicant numbers nosedive for construction vacancies

Recruitment market gets even more competitive - how the Enquirer can help
9 hours ago

Housing association shuts in-house modular factories

Swan closes loss-making steel frame and cross-laminate timber factories
12 hours ago

350-homes approved around iconic London Tube station

Housing blocks to be built around Grade II-listed Hounslow West Tube station
12 hours ago

Domis set for £195m Boddingtons Brewery scheme

Developer Salboy buys Manchester site to kickstart long-awaited 556 homes project
13 hours ago

John Lewis £500m funding deal to build 1,000 rental homes

Deal to advance BTR flats at store sites in Bromley, West Ealing and Reading
1 day ago

Esh launches new housing retrofit division

Esh Retrofit Solutions will target market to improve the energy performance of social rented homes
13 hours ago

Eric Wright wins tricky £52m Liverpool transformation

Contractor working with engineers at Ridge and Partners on "challenging" Stanley Lock Flight site
3 days ago

Investment giant buys Bristol M&E contractor

RDCP Infrastructure acquires Avon Combined Electrical Services
4 days ago

Demolition start for £50m Farnworth town centre rebuild

Caddick Construction is tipped for main works due to start in the spring
4 days ago

L&G Modular strikes deal to build 1,000 affordable homes

Modular homes business teams up with Hampshire's Vivid housing association
4 days ago

Former Erith operations director joins John F Hunt

Scott Exell named new operations director at demolition specialist John F Hunt
4 days ago

Green light for £135m Leeds twin tower resi scheme

Construction to start in New Year on 500 build-to-rent apartments
4 days ago

Mace hits 1m tonnes carbon saving target for clients

Present work pipeline betters 2026 carbon emission saving target
4 days ago

Plans in for £40m surf park at former Kent colliery

Seahive surf lagoon and health resort will be built near Deal
5 days ago

Crushed demolition worker vows to return to industry

Shannon Brasier hoping to return to construction following horror accident
5 days ago

Mount Anvil to start 900-home North London estate rebuild

Planning approval paves way for Barnsbury Estate rebuild in Islington
5 days ago

Green light for major laboratory campus in Cambridge

Developer BioMed to tender first building on 600,000 sq ft lab complex in the New Year
5 days ago

Belfast firm signs the biggest work deal yet under Project Gigabit

Fibrus to hook-up rural Cumbria to lightning-fast broadband under £108m deal
4 days ago

McLaren wins Leeds logistics park contract

Work to start imminently on warehouse complex for Firethorn Trust
5 days ago

Work restarts on £683m waste power plant after site death

Construction suspended for a week of investigations following fatality
5 days ago

Demolition starts on £135m Wigan Galleries scheme

Contractor BCEGI starts work on project to redevelop Wigan town centre
6 days ago

Amey CEO to step down following private equity buyout

Amanda Fisher to leave once business is transferred to new owners
6 days ago

New body set up to vet plant operator card schemes

Contractor trades bodies unite to tackle competency concerns over plant operator skills cards
6 days ago

Kier leads switch to hybrid battery generators

Battery units work alongside smaller generators cutting run times by nearly 60%
5 days ago

Plans in for first Leeds co-living scheme

Watkin Jones submits plan to convert old Direct Line HQ into 230 studio flats
6 days ago

Demolition worker crushed by excavator

Court hears 20-year-old woman was left with "life changing injuries"
6 days ago

Government pays £700m for 50% stake in Sizewell C

New body, Great British Nuclear, will be set up to develop pipeline of nuclear projects
6 days ago

Costain wins Heathrow Airport asset renewal deal

Firm takes early contractor involvement role in Terminal 2 baggage handling upgrade
7 days ago

Worker killed on £683m waste power plant site

Fatal collision involving heavy goods vehicle on giant north London site
7 days ago

Contractor services