CJ Construction Blog

More and more clients are taking advantage of the recession to rebid projects in the hope of unearthing further savings.

At a time when the cost of some building materials is dropping, they can be forgiven for trying to drive a hard bargain. But when clients misuse their power and overstep the mark, as now appears to be the case, there will be no winners.

Recent reports in CJ show framework agreements are being torn up and Dutch auctions are back, forcing contractors to submit at or below cost bids. With payment periods also starting to slide, there is a worrying sense that the countless attempts to improve procurement over the last few years are being cast aside at the first sign of recession.

The construction industry is standing at a crossroads. And the unwelcome return to short-term thinking has to be challenged by the contracting industry. Clients must remember that bullying contractors into submitting ridiculously low bids only guarantees strife and soar-away project costs, with QSs and lawyers the only winners.

In 1993, construction reformer Sir Michael Latham published a landmark report called Trust and Money in the wake of the structural business damage caused in the preceding recession.

He argued it was time to abandon narrow self interest in favour of co-operating to share gains from lower transactional cost and reduced conflict. That sentiment is as true today as it was 15 years ago.

There are ways of getting through this recession suicidal bidding is not going to be one of them.