Views of procurement success vary between Main Contractors. One perspective on success is a signed contract, within budget, with the Subcontractor meeting the main programme dates. Another is a subcontractor’s engagement at a low price, carrying the majority of the risk, and signed to strict contract terms and conditions. In other words, the construction industry can take an incredibly short-sighted view on procurement.
Here is an alternative view of procurement success – a job well done, a reasonable final account, and a happy and engaged supply chain.
If we take this example as a solid procurement process, how can we ensure we meet these aims? This can start with a strong focus on relationships and paying close attention to the quality of the Invitation to Tender.
Construction can be adversarial, and often this is already apparent at the procurement stage. We seem to forget that we have shared aims in construction. The Subcontractor also wants to achieve handover and completion of their package of works with a happy client. Goals usually include avoiding stressful and time-consuming disputes, feeling pleased with the quality of the work at completion, and a decent profit margin.
Subcontractors are also thinking about their future pipeline of work. If they can complete the project with a good relationship intact with the Main Contractor, they will have better prospects of securing future work. With engaged supply chains and ongoing working relationships, the Main Contractor also wins. This should be the outcome we are all looking for.
If both Main Contractors and Subcontractors want the same thing – to happily part ways at project completion feeling that both parties won and that there is scope for working together in the future, then Main Contractors should approach the procurement stage with this in mind. And they should bring Subcontractors on that journey too.
What to include
It is not unusual for Invitations to Tender to include overwhelming packs of documents that don’t make sense, that include conflicting advice, and that requires an enormous time investment even to understand the scope.
For absolute clarity of tender responses, the responsibility rests with the Main Contractor to create a tender process that makes this as simple as possible. A little extra effort upfront at the tender stage could mean an emphasis on clarity of tender documents, taking the extra time to sense check the documents and make sure they are not conflicting with each other, perhaps sending simpler tender packs that don’t include every single drawing. Or, if you want to include them all – outline to the tenderer the essential drawings they should be focussing on when they return their price, and what is ancillary.
The Scope of Works should be crystal clear. Bills of Quantities should always be included in Invitations to Tender unless there is a specific reason for not doing so, such as the Subcontractor having design responsibility for their package of works. Phone calls and meetings should be standard at the tender stage.
Start with the end in mind
This time investment upfront with Subcontractors can make an enormous difference to the quality of tender returns and sets the tone for relationship throughout the project. Start the Subcontract relationship with the end in mind and set yourself up for a collaborative project and ultimately successful project outcomes.
Keep the end results in mind during procurement – project success begins at the procurement stage.