Public clients plan to retender jobs to drive down prices

Grant Prior 11 years ago

A quarter of public sector clients will ask suppliers to slash prices over the next six months as budget cuts continue to bite.

Housing associations will exert the biggest squeeze with 50% demanding price cuts from subcontractors while health authorities will retender a third of projects to secure lower bids.

One in four public sector clients are also likely to cancel construction projects this year according to a survey by pre-qualification certification scheme Constructionline.

Public sector organisations are working with Constructionline to deliver cost savings to their construction budgets in the hope that projects won’t have to be cancelled or prices slashed.

Tactics include adding new contractors to supply chains (25%), retendering for frameworks (21%), price benchmarking future tenders (32%) and retendering for projects (34%).

Philip Prince, sales and marketing director at Constructionline, said: “Despite the financial pressures public sector organisations are under, our survey has highlighted the positive steps many organisations are already taking to deliver effective savings.

“We are helping many of our own clients look at ways to save on procurement costs and therefore reduce their overall construction costs.

“In the last six months, nearly a third of public sector clients joined framework agreements and a further quarter started trialling new forms of framework working. Frameworks can guarantee certainty on time, cost and quality, which means greater predictability and a more timely and efficient programme of delivery.”

“Health authorities have been the most active in joining frameworks in the last six months, with half (50 per cent) signing up in search for cost savings. Local authorities, the police, and universities have also joined frameworks.

“Our survey reflects the state of public spending cuts and the lack of building grants available from central government, which has been facing the industry for some time now.

“In these difficult economic times, it’s important to adapt and find ways to save time and money.

“Constructionline’s priority is to do just that. We work with clients and suppliers to help improve efficiencies and hope we can help public sector clients to continue building.”

Latest news

Plan approved for tallest resi tower in Wales

£55m project will be built next to Cardiff's Central Square
6 hours ago

Costain dropped from £1.3bn A66 road job

National Highways pulls Costain off TransPennine upgrade and demands its £1bn A12 widening now shared as a JV
22 hours ago

Laing O’Rourke plans to cut 200 staff jobs

Dartford head office to see bulk of job cuts
2 days ago

SES Services restructures senior team

New MD Rob Clifford to head four new divisions at M&E specialist
23 hours ago

Galliford Try ranks top in May contracts league

Kier holds pole position for highest value of work won over last 12 months
22 hours ago

£800m NEPO construction framework winners

BAM, B&K, Caddick, Esh and Morgan Sindall secure places for first time
22 hours ago

Manchester Uni reboots 3,300-bed campus plan

Initial £7m demolition package out to tender ahead of planning submission
22 hours ago

Subcontractors wanted across Derbyshire

Register now to meet big name buyers at latest Constructionline event
22 hours ago

House builder Lane End owes £12m to suppliers

Administrators probing claims by creditors about company transactions prior to failure
3 days ago

£500m Suffolk construction framework winners

Fourteen contractors and seven M&E specialists secure spots on East of England framework
2 days ago

Illegal cartel whistleblower reward raised to £250,000

Competition watchdog hikes rewards to flush out more construction bid rigging activity
2 days ago

McLaren wins £28m East London health centre job

New three-storey health centre to be built in Hornchurch
2 days ago

Balfour sells telecoms division to Obelisk

Irish infrastructure firm continues expansion plans with Balfour acquisition
3 days ago

Blackburn M65 £20m junction 5 revamp to go-ahead

Balfour Beatty to be confirmed this week to start mobilising in November for 2025 start
2 days ago

Unfit planning system means 4,700-year wait for onshore wind

Call for urgent planning reform for even a chance to meet net zero and housing ambitions
2 days ago

Commercial work boosts construction new orders

Buyers report inflation easing to its weakest for 32 months
3 days ago

Mace, T&T and Atkins secure place on MoD framework

JV wins provide technical services on £5bn defence optimisation programme
2 days ago

Enabling works start on £200m Cambridge station

Murphy starts site preparation ahead of main contractor award next month
4 days ago

Industry aims to be almost diesel-free by 2035

Big players agree first steps to eliminate diesel from most sites
3 days ago

Weston Homes plans £50m East London scheme

Land deal for 147 homes at Town Quay Wharf in Barking
3 days ago

Lee Marley Brickwork hires Countryside regional FD

Matt Sheehan joins from house builder's partnerships arm
3 days ago

Demolition deal awarded on Chancery Lane refurb

General Demolition Ltd lands demolition and enabling works package
3 days ago

Contractors no longer lagging on digital transformation

Construction shrugs-off image as late adopter of technology
3 days ago

Work stops on MAC education job

MAC-Interiors seeks protection from creditors as subbies walk away from Birmingham site
4 days ago

HS2 labour supply firm posts loss despite revenue jump

Hercules Site Services confident about future prospects despite HS2 slow down
4 days ago

Graham to lead UPP push for next generation green campuses

Student campus developer strikes deal with Architype to design and retrofit next generation net zero student halls
4 days ago

NG Bailey appoints Sellafield chief as NED

Martin Chown joins M&E contractor main board
4 days ago

EN:Procure wants firms for £700m new-build homes deal

Regional social housing consortium Efficiency North to renew house building partners
4 days ago

£470m tunnel plan for Scotland’s landslip-prone A83

Scottish Government plans 1-mile long debris flow shelter to protect vehicles from falling rocks
4 days ago

Developer dumps Henry Construction from London tower job

Growing list of subcontractors and suppliers complain they have not been paid
7 days ago

Contractor services