In the modern age of electronic information transfer, it has become the norm for main contractors to issue disc or email tenders. These tenders are sent at virtually no cost, to an ever-increasing number of willing subcontractors. The logic being that more quotations means better prices. But is this the case?
It is not uncommon for subcontractors to receive tender lists from as many as four main contractors for the same job. This is due to the cost-saving of electronic distribution, thus increasing the number of mechanical and electrical subcontractors quoting for a project.
To be the lowest out of four is one thing, but the lowest out of 24 is an entirely different story. If you are the lowest, the reason rarely, if ever, relates to margins.
Let's be realistic about this - surely the most important aspect of the main contractor/subcontractor relationship is, in large part, trust. For example, has the subcontractor submitted a compliant bid, opposed to one that implies compliance? And whose true worth is only exposed after the order is placed and when it is effectively too late.
It is inexpensive to send enquiries to as many subcontractors as you can find, but does it really help your cause?
From the subcontractors' perspective, we are well aware of the cost of estimating, and sooner or later we will be deciding which projects to price purely based on the size of the tender list.
Leaving us to question who wins in this arrangement?
Patrick Cassidy
Operations director
ABS London
Comments (2)
Tenders annoy me so much a huge amount of paperwork to go through and after all that you destroy the market price becuase everyone is fighting for the work.
And on top of that sometimes you have to be invited to tender.
Posted by Rodney Hathaway | January 9, 2009 11:42 AM
Posted on January 9, 2009 11:42
I used to get 5 or 6 tenders a week from one company, and wasted a lot of time going around pricing the jobs to find out that they were only pricing it themselves. I would then refuse to tender for jobs they didn't already have in the bag. I wasn't prepared to do their QSs work for them.
In the end, I phoned them and removed myself from their tender list, and now bin any tenders that land on my mat. Sod em.
Posted by Tony Mugford | February 22, 2009 4:15 PM
Posted on February 22, 2009 16:15