Single-stage tendering creeps back as market softens

Aaron Morby 6 years ago
Share

Contractors are starting to agree to single-stage tendering again as nervousness grows about the long-term work pipeline.

Early signs of a turnabout in contractor tendering policies is being reported by Mace’s cost consultancy.

In its most cautious tender forecast for several years, Mace warned that global economic headwinds were putting long-term work pipelines in doubt.

Chris Goldthorpe, managing director for Mace Cost Consultancy, told the Enquirer: “People are starting to get concerned about the tail of 2016 and 2017 and where the work will come from.

“If a project has been taken to stage E design there is now more of an appetite to go with single-stage tendering in the £10m-£40m bracket of projects.”

He said: “London workloads remain high, particularly for the largest contractors, but recent weeks have seen a shift in longer term prospects as the global economic outlook starts to effect clients’ investment plans.”

Mace warned in its latest forecast update that despite the robust recovery and strong workloads, the weakening economic picture would affect investment in the longer term and global market risks would make future pipelines less secure.

The latest tender forecast maintains tender cost inflation for London and the South East in 2016 and 2017 at 4.0% – but expects this to fall to 3.5% in 2018.

The report states: “We expect the high levels of current workloads to generate steady inflation in tender prices in accordance with our previous forecasts for 2016 and 2017.

“We expect to see inflation easing in 2018 as economic factors lead to a reduction in client’s appetites for investment and contractors become more aware of the need to attract new work to fill order books.”

Main cost consultant tender price forecasts

Mace 2016 tender forecast

 

Latest news

Construction leaders launch inflation busting taskforce

All sides of industry urged to work together rather than row over price hikes
5 hours ago

Track worker killed by train was controller of site safety

Distracted rail worker "lost awareness of his position relative to the line the train approached on"
3 hours ago

MechFS went down owing £9.5m to supply chain

Subcontractors left holding millions in worthless invoices
10 hours ago

HG Construction profit jumps 50% to £25m

Multi-storey homes and student accommodation jobs drive sales to record £243m
10 hours ago

Go-ahead for Newcastle’s largest build to rent project

Work to start on 14-storey flats complex in the autumn
9 hours ago

Contractors wanted for £288m Northumbrian Water frameworks

Ten lots up for grabs under latest major civils deal
10 hours ago

Plans in for 142-room Exeter net zero hotel

RED Construction to build first of hotel developer's planned chain of net zero hotels
9 hours ago

Rail workers vote to strike over maintenance job cuts fears

Network could grind to a halt next month
9 hours ago

Race for £100m Immingham ferry terminal job

AB Ports aims to start work in mid 2023
1 day ago

Sisk wins Stockport £60m Weir Mill restoration

Work to start next month on 250 flats scheme
1 day ago

Developer swoops for 1,000-flats landmark Leeds site

Revised plans to be submitted by the end of the year for start soon after
2 days ago

Dominvs seals £173m funding for 713-bed student job

HG Construction to start major Hammersmith student complex in November
2 days ago

Briefings start for £1bn Midland Mainline Electrification plan

Market engagement starts for next seven sections covering 139km route to Sheffield
1 day ago

Forterra pushes back £27m factory refurb plan

Supply chain shortages hit project as brick prices rose another 12% last month
1 day ago

Speedy Hire results slowed down by KPMG

Hire giant left "frustrated and disappointed" by delay request from auditor
1 day ago

London office starts set to surge over next 6 months

Deloitte Crane Survey predicts jump in starts in Capital despite high building costs
2 days ago

Fit-out firm BW Workplace slips into the red

£5.2m backdated R&D tax credit deal lifts after tax performance
2 days ago

Hinkley Point delayed another year as costs rise by £3bn

Covid blamed for construction delays and cost increases
5 days ago

Competition probe launched into Bouygues’ Equans takeover

Bouygues is hoping to finalise acquisition later this year
2 days ago

TfL seeks developers for trio of over-station sites

Plum sites at Bank, Paddington and Southwark come with consent for 600,000 sq ft
2 days ago

Underwater drone used to check offshore wind farm foundations

Underwater robots deployed for inspection and maintenance work
2 days ago

DfE to unveil plans for school procurement shake-up

Supply chain summit to be held next month in Birmingham on future of schools frameworks
5 days ago

Plan for £100m clifftop hotel and flats in Newquay

Developer Salboy's landmark scheme to go in for planning shortly
5 days ago

Top 30 M&E contractors set for growth – ranking

Major M&E firms prepare for work surge after riding out pandemic
5 days ago

Former Mace boss joins Taylor Wimpey board

Mark Castle takes on another non-exec role
5 days ago

ISG starts £28m duo of Yorkshire leisure centre jobs

Harrogate and Knaresborough leisure centre jobs get underway
5 days ago

HS2 workforce surges to 25,000 jobs milestone

Over 2,500 firms form the HS2 supply chain
5 days ago

Green light for 1.4m sq ft Yorkshire logistic hub

Work at the site, located 24 miles from Leeds city centre, is expected in September.
5 days ago

Contractors lift tender margins to 9% on bids in the Capital

Developer Landsec to press ahead with trio of London office schemes this year despite cost inflation
6 days ago

Fire safety work plunges Countryside to £182m loss

Countryside Partnerships forms dedicated division to handle retrofits on a 123 buildings
6 days ago

Contractor services