Contractors have warned clients to reduce the number of firms invited to tender as the excessive levels of competition mean the chances of winning work is low.
The number of firms reaching the tender stage of the bidding process has risen throughout the recession as clients and contracting authorities have sought to reduce costs through competition. This has led to contractors being reluctant to assign in-house resources to complete PQQs and tenders at the risk of being beaten on price.
Major contractors have addressed this issue, stating that unless shortlists are cut down then they will simply not be able to cope with the volume of tenders over the next couple of years. “When we sit down and look at what we are going to have to bid, it is a massive list, with loads of big projects,” said a bid leader at one major UK civil engineering contractor.
“And that’s before you get to all the little ones. Contractors won’t admit it publicly, but I can tell you, we can’t cope…we need clients to cut their tender lists to three or four maximum.”
Large firms have stated that the amount of invited bidders is hindering the tender process after the release of several notable framework agreements. This week the Highways Agency is expected to invite bids for its £5bn collaborative delivery framework, which replaces the current major projects framework operated by Balfour Beatty, Bam Nuttall, Morgan Sindall, Carillion, Costain and Serco.
Meanwhile, Network Rail is set to go out to tender for its CP5 workload, along with Heathrow Airport looking for tender submissions for a number of projects. There are also a number of large standalone projects such as the Thames Tideway Tunnel at £4.5bn and Sunderland City Council’s New Wear Crossing.
The issue with big tender lists has been fairly prevalent during the recession but as the country moves out of the dip it is causing problems with companies’ available bidding resources. Large organisations are being spread thin across many major contracting opportunities and their bid teams are struggling.
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