As an electrician with firm business values, who runs a business that employs engineers and apprentices and believes in CPD, I wonder, can we hold on while the race to the bottom is underway?
It’s very apparent to me that a lot of clients, whether private, main contractors or developers, will judge a tender purely on its cost. They must either assume that a cheap quote will provide value for the project, or they believe that by some miracle a good job can come from a cheap price. Or maybe, they feel safe knowing the murky Ts&Cs in the project’s specification will ensure a top-notch job at the sub-contractor’s expense either way. I really hope the latter isn’t the case.
I can predict that by my suggesting that some contractors are intentionally getting away with underpaying subcontractors, I may well get some contractors’ backs up, but please don’t take this as an attack. This is all simply my view on sub-contracting and the tender process.
I’ll start by making clear my feelings on clients that bottom line skim. I simply do not want to work with you. I would however, like to educate some of you and show you some examples of the cheaper quote ending up 10-30% higher than my ‘expensive quote’ in the long run. However, I’m too busy for that, focused on building my business with integrity and honesty.
This takes me to my key point, which is ultimately about honesty, and gives reason for this blog post’s title, ‘the race to the bottom’. How long can a sub-contractor last trying to do the right thing?
At the starting line of ‘the race to the bottom’ in my opinion, is the client. How can they help improve standards and encourage integrity?
I would like to point out here that we have a fantastic client base, that I am proud to say are almost all 100% retained customers and we appreciate you all. Some are main contractors, some are private developers, some are private clients. The one common factor across all our clients is… they appreciate the value we offer them.
For us it is easy to work with most domestic clients; we deal with them direct, they accept our quotation, we deliver, we build a relationship, and we do repeat work for said client (most of the time with no need to price the works as there is then trust there). So, on the repeat work we don’t waste hours pricing against competitors.
The commercial client is the tricky one, because (a lot of the time) they are hidden behind layers of people and generally never seen until handover day. We rarely get to work directly with commercial end users due to those many others put in place to represent them, supposedly to look after their best interests. In fact, when we work directly with a commercial client, it’s the best kind of project. A project where client, contractor, consultants and subcontractors work collaboratively and open book (where all parties can make money). In our experience, this gives the best results, a successful project and a truly happy client at the end. Why don’t you all see the benefit of working in this way?
I think the problem is with clients needing to be better informed when first embarking on a project. If they’re not aware or advised appropriately, they’re at risk of being taken advantage of at best, overcharged at worst. So, I’m hoping this is an education to the clients out there who want the best job done, fairly, honestly and to their requirements.
The first port of call in the commercial instance in my opinion is to make sure the package being tendered for is informative enough to guarantee all three tenders come back like-for-like and with no ambiguity in them. A comprehensive brief written by someone qualified to do so, and, equally importantly, having that same person review the responses, is fundamental to the overall success of the project. If this was to happen in the real world, all you would find out from the responses is the difference between each sub-contractors’ mark-ups, overheads and profit margins. But what happens more often than not, is that we receive a middle ground package, not mind-blowingly informative, nor is it worthless.
At eco, we will price all elements requested, with quantities detailed on drawings etc, to the specification as written. Then we will allow for all the other items you will need to complete the work to the standard we want to deliver, work which may have not been specifically mentioned or quantified but we know is necessary. We will also note any value engineering items we feel would be beneficial, without having a detrimental effect on the MEP consultant’s preliminary design. We aim to offer a tender that avoids the need for variations and give you the best results, in terms of both efficiency and value.
With most tender package, it is almost guaranteed that your three tenders received won’t be like-for-like. An experienced and qualified MEP consultant or quantity surveyor for example, will be able to evaluate all the clarifications, and adds and omits the responses may include and judge the tenders based on what has and hasn’t been allowed for. However, if the client is using someone other than the person who wrote the brief/spec or someone not qualified to assess the tenders, then guess who wins the job? The one who wants to win the race to the bottom, that’s who.
What we send as a tender is our interpretation of what is required and most importantly, a complete offer, with all ambiguity stripped out of it. Our quote therefore is invariably not the cheapest, because we don’t work cheap, we work comprehensively, providing quality and added value, to the highest standards.
Our intentions are to keep our standards at the highest level, using directly employed, fully qualified electricians to manage and run your project, while also employing and training apprentices to ensure the skills gap is filled for generations to come. We continually develop our employees through an ongoing programme of CPD and we ensure the engineers running your project arrive to your sites in a timely and presentable fashion, using up-to-date, fully serviced and efficient vehicles. All members of our staff have the relevant health and safety qualifications, not to mention, we continue to commit to the self-certification schemes that we subscribe to as well as various other governing trade bodies that keep us sharp.
It really is simple Mr/Mrs Client; to get the best value for your budget, let’s gather as a collaborative team sooner rather than later, working together, not against each other.
