EP 142

The Future of Contracting Series: The end of the ‘subcontractor’ and the start of something new. (EP 142)



This week, Paul is joined by his close friend and QS, Chris Barber. Chris is a Chief Visionary Officer (CVO) at C-Link and Prosper, and also a passionate advocate for subcontractors on his YouTube channel, School of Sub.

In today’s conversation, Paul introduces the first episode of a new 4-weekly series titled The Future of Contracting. In today’s episode, we explore an eBook that Paul recently wrote titled Why Main Contractors seriously need a Tender Strategy. In the eBook and the show, we explore:

  • 🔮 Why Main Contractors must embrace long-term thinking. 
  • 💰 The profound impact of dwindling subcontractor numbers on Main Contractor profits.
  • 📊 Unveiling the blueprint for Main Contractors to master their supply chain through an ingenious tender strategy.


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I’ve shared a link to the eBook here: Why Main Contractors seriously need a Tender Strategy.


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Paul Heming: Hello and welcome to episode 142 of the Own the Build Podcast With me, Paul Heming. Today we are starting something new. We’re introducing a new series called The Future of Contracting. We will be running the future of contracting episodes every four weeks. And in these episodes we are going to be seriously taking a look at, you guessed it, the future of contracting. We’ll be talking about why main contractors need a tender strategy, how to tackle the UK’s quantity surveying shortage, why QSs shouldn’t only have margin as their KPI and much, much more. And for all of these episodes, I will be joined in the studio by a very close friend of mine, Christopher Barber, who is the Chief Visionary Officer at our Business C-Link and Prosper. As you know, we’ve created software that connects main contractors and subcontractors and saves main contractors 600 hours of quantity surveying time. We are quite sad individuals if I’m honest with you, but both Chris and I care deeply about both main and subcontractors. I’ve been a suby, as you’re all very much aware of. And what we want to do is grow the understanding of both sides, improve the industry, and just generally help everyone improve the future. So Chris, I’m blabbering on here mate. Welcome back to Own the Build.

Christopher Barber: How many episodes is this now?

Paul Heming: Four now.

Christopher Barber: Four.

Paul Heming: Too many. Too many. Yeah.

Christopher Barber: Wow. I must be doing something…

Paul Heming: I still…

Christopher Barber: Supposed to be desperate for guests. Right?

Paul Heming: No. Must be, maybe the latter, but you’re still not the number one returner, but with this series, you probably will be. So we are going to get there. So the important change, I guess, about this series, and we’re going to run it every four weeks, like I said, is that there will be a downloadable, directly linked to each show. And so if you’re a main or a subcontractor and you’re thinking about the future of your business, the future of the industry, go into the show notes right now and you will find an eBook titled ‘Why Main Contractors Need a Tender Strategy’. Now, when I go about writing these eBooks, I always ask you Chris to edit them, review them, take a look at it to see if I’m talking nonsense, right? I come from a little town in the Midlands called Stratford upon Haven. And Stratford upon Haven is famous for William Shakespeare. The school I went to was the same school as William Shakespeare and you knew this. And so if you read that eBook now guys, you will see that the first sentence says something like, when Shakespeare said that, Shakespeare invented the word subcontracting, right? He invented 1700 words apparently that are now in our current dictionary. And one of them was subcontracting. And what he meant by that was that you would remarry, to subcontract was to remarry and to remarry and remarry. And when I read that, when I was writing this piece, I did think that is pretty hilarious in the context of the way main contractors currently manage some subcontractors, right. Because so often you remarry and you remarry and you remarry, relationships, partnerships, they don’t go on for too long. The question I have for you, first and foremost Chris, is knowing me when you picked up that piece that was titled Why Main Contractors Needed a Tender Strategy and the First Line talked about Shakespeare, what did you think??

Christopher Barber: I thought if I had a pound for every time you mentioned you went to Stratford upon Haven and to Shakespeare School, I’d be a very, very rich man.

Paul Heming: Well, I do want to be a journalist. I always wanted to be a journalist and Shakespeare was a writer. I went to the same school. So you know, read, download eBook everyone and read that, you’ve got to be done. All jokes aside. So we work with main contractors a lot, right? And at Clink we know there are high achieving main contractors and there are main contractors who are still on their journey to improve their tender strategy. Let’s talk about what a tender strategy is. Chris, what do you think a tender strategy is and why are you laughing so much?

Christopher Barber: What’s the tender strategy?

Paul Heming: Yeah.

Christopher Barber: On the proud one. I think you need to kind of scale it back a bit more from what is a tender strategy. I feel like that’s the wrong way of looking at a project when it lands on your desk. I think it needs to go a bit more internal ops for the company and more like what’s a supply chain strategy. And I would bring it back to what is your supply chain change strategy as a business before we even look at what a tender strategy is for a project. Because they differ so much and my focus would be on, and we never had this, I mean a lot of organizations don’t have this, the bigger ones do where they’ve got like head of supply chain or supply chain manager who is actually fostering those relationships and making them consistent through from estimating to construction and then coming back around to estimating construction again on the next set of projects. And I would look at that first before even diving into a tender strategy. What I liked was the episode with the MD of Sedan.

Paul Heming: I believe it was Peter Jackson.

Christopher Barber: Yeah. And how he’s revolutionized his strategy and it’s not actually…

Paul Heming: Rocket Science.

Christopher Barber: No, it’s not revolutionary in the sense of just treating people like humans and just being that open and transparency and collaborative way that is probably written into all our contracts but never really adhere to.

Paul Heming: Well, what’s funny, and Peter, I imagine that you’re listening because I know that you’re an Own the Build listener. I loved that episode because it taught to the heart of everything that we want to change in the industry. We want main and subcontractor relationship to not be remarrying as Shakespeare would say, got it in again. But more that collaborative partnership, human relationship. And it’s so simple. And we recently had a new employee join our business and he joined in the role of product manager and he was looking at our product, he’s new to the construction main contractor, subcontractors. He was thinking about it and he listened to that episode and he said it was a really interesting episode. But is that really a thing that the main contractor and subcontractor relationship, it’s such a revolutionary thing for the main contractor to invite the subcontractor into that. I think you called it a supply chain day, right? And I said, bizarrely, in some respects it is right. And that’s true, isn’t it? And it is absolutely ridiculous in some ways that that is so groundbreaking. We need to get to a point where that relationship is incredibly close. What do you think?

Christopher Barber: Yeah, I think it was amazing, really. And it takes me back. So my best friend and my partner, two different people, just to clarify that.

Paul Heming: I was going to say.

Christopher Barber: They both work in the retail section and they’re suppliers to big retailers. And I won’t mention the retailer, but they had a particularly bad reputation for letters beginning with a certain letter called, I won’t mention it.

Paul Heming: Yeah.

Christopher Barber: But for the purpose of this. But they had a really bad reputation. And then I think someone new came in and they were like, what are we doing to our suppliers? Why are we being so brash with them? Why are we giving them really tough terms to work with? We’re really aggressive. And he called like a big strategy, like a big supply chain. All suppliers come in and basically said, I’m sorry, we’ve been dicks. Like literally I’m so sorry. This is going to be the new way we’re going to operate. We’re not going to be these tough buyers that are really negotiating; really, really tough with you. This is going to be our new approach to things. And then now I say, how are you getting on with so and so? And they say, yeah, no, it’s all good now. Like it’s moving in the right direction. It’s far better relationships than we had 24 or 36 months ago. And I thought of that, I thought could imagine if someone in construction just did that. And then Peter Jackson from Sedan.

Paul Heming: Went ahead and did it.

Christopher Barber: Went ahead and did it. Yeah.

Paul Heming: On this show in probably the last six months, we’ve had quite a lot of subbies on, we’ve had Mike Warton, we’ve had Nicola Bard, and we’ve had Angela Mantel and they are prominent subcontractors. And the single biggest thing that they have said is bring us in, talk to us. We want to speak to you. So if you’re a main contractor, it’s such a simple thing to do, just open your arms and let them in. And we talked with Angela Mantle and they’re a large subcontractor. It really hit home for me because I was a large subcontractor and the relationships we had with our supply chain. So this is subcontractor to secondary subcontractor or material suppliers was almost not like a family. That’s cheesy, but it was super close. You could pick up the phone and it would be easy. That relationship subcontracted to main contractor. Although there will be people listening to this thinking, I know there’s plenty of people I can pick up the phone to, but as a strategy, let’s take it back to that word strategy, main contract, tender strategy, procurement strategy, supply chain strategy. Is your strategy to be close to your supply chain or not? All of the feedback that we’ve had from subcontractors since that Peter Jackson Sedan episode has been, that resonates. That’s something I want to hear. That’s something that I want to be a part of. So I think in summary, the first thing is bringing that human element to it, right?

Christopher Barber: Yeah. I mean you’ve got to remove it away from the commodity side of things. That’s how the industries like the subcontracting, like you were saying, remarry off the shelf wife, off the shelf subcontractor that is like there’s plenty of fish in the sea kind of mentality. It is the wrong way and there’s no, if you’re going to look at any reason why the industry really struggles, it’s with that very top level of not treating the supply chain, right?

Paul Heming: Shakespeare, remarrying, we’ve got to it. So let’s contextualize this in the long term note now because if you’re thinking about strategy and strategic view, it is in the long term. And so if we look at the current rate of retirement in construction is higher than the rate of employment. So as a result, an extra 225,000 construction workers are going to be needed by 2027 according to the construction skills network, build UK, their most recent people survey revealed that 68% of companies have vacancies that they currently can’t fill. The National Federation of Builders completed a survey in February, 2023. 84% said that their business experienced a labor shortage with the most frequent being carpenters, brick layers, plasterers, dry liners. And so bad is that situation that the government added brick layers, roofers, carpenters and joiners to the shortage occupation list to encourage migration in summer 2023. I don’t want to get into Brexit, I don’t want to get into all of those conversations, but it is fundamental and clear that we have a skill shortage. So with that in mind, there’s going to be a subcontract shortage, right? So this is something we talk about all the time at Clink in our businesses. How do you make your business a business that subcontractors will be attracted to work with? Because there’s a small pool. If I was to say to you, Chris, that question how, I’m the MD of a main contractor, you are my procurement director or my commercial director, I say to you, all those stats have just said there’s this skill shortage. Chris, how are you going to make us a business that stands out?

Christopher Barber: Well, I think you’d look at it, it’s twofold how my big picture thinking looks is if you invest in your supply chain and you’re giving them certainty on pipeline, right? The two things that really restrict sub-subcontractors and the supply chain from scaling is cash flow certainty and pipeline certainty. They’re the two kind of things I would say. They don’t have an, you can give that as an employer of those subcontractors, you can give them certainty in those areas. So by addressing that, you’re allowing that subcontractor to scale, to service more of your projects and consistently service your projects forward.

Paul Heming: How are you going to give them that certainty? So you haven’t got the certainty you said.

Christopher Barber: Yeah, no, I agree. But here’s the big picture, right? So you’re this main contractor, it doesn’t happen overnight, right? Just to caveat all that. But you are this main contractor. Your job is your procurement manager or whatever supply chain manager, you’re going to come in and revolutionize it. You open up like you have these open days like Peter did and you really get them on board. This is what we’re looking at. These are the tenders. We are pricing at the moment. We think we’re going to be successful and this is what our pipeline’s looking like for the future. You get that supply chain built in, brought into that and thinking, right, this is great. I could win. You can also caveat, oh, you’re not going to win everything, right? It’s, you’re going to competitively tender. We need a diverse supply chain because you might be busy so and so you might have the capabilities, et cetera. Having that transparency and that open discussion with them about this is what’s going on. We want you to be part of our journey. And then imagine what that looks like from a client perspective, looking at your profile as a business 6, 12, 18 months down the line. They might be looking at you thinking, look at how robust their supply chain is. Look how much they’re delivering. Their capabilities are really a massive, and it changes what people view your business as because you’ve got this highly engaged supply chain…

Paul Heming: You’re saying both ways, right? You’re saying it changes the way clients perceive you down the line and then the stubbies up the line. They’re also looking at you in a completely different way.

Christopher Barber: Yeah. Because you’re consistently delivering and could because you’ve got the supply chain bought into the whole process. So your projects are on time, on budget, that kind of to the right quality and that’s going to spread that quality side in the estate groups or whoever these private clients, et cetera. The word will spread like you should be using this contractor. They’re really good, really like dealing with them. They’ve got a good supply chain. They deliver X, Y, Z.

Paul Heming: And so the challenge is we’re sat here in a podcast studio talking about the best case scenario, right? And like I said to you, and you know this. So I know that you do, but main contractors are probably sitting there thinking, well I haven’t got a pipeline, I haven’t got five jobs lined up. I’m saying I’m going to divvy up X, Y, and Z. So all of these things are a challenge. But if you were a sizable main contractor or in fact if you’re any kind of main contractor, how many and you are going to be running two or three jobs a year, maybe more. How many subbies do you really want to have for each package? Let’s say dry liners, right? How many do you want to have? Because you’re going to invite, Peter said this himself, he said that some of the feedback from his specialist supply chain was why are subbie X, Y, and Z here when we are here? I thought we were your dry liner as opposed to no, we need 3, 4, 5. I don’t know, I’m interested to get your view on it to create that competitive environment. Because if you’re really going to give them certainty on pipeline, how do you do that if you want that competitive process.

Christopher Barber: I think I don’t know how Peter delivered it with the people that invited to the supply chain day. But you’ve got to tell them, look, we are going to, this is our idea. We’re going to tender with X amount of subcontractors who are part of our supply chain and they are an absolute focus for our business. You are part of that, but we are not in bed with you wholly and solely. Because like that’s, we can’t do that because of its risk exposure to our business. If you go under who else do we all rely on? And there’s lots of ways you could communicate it. I think just being clear from the outset on that, that this is what your intentions are. I’m not saying that that didn’t happen, but absolutely clear on it. And I guess what you are saying is how many do you rely on? Which I think is a good question. But it does depend on how big your pipeline is, right? So if you had a massive pipeline and the size of the projects you’re dealing with, are they all a certain size? Or have you only got a couple of big ones and then loads of smaller ones because they might be tailored for a different type of contractor? But competitive tendering, we all know it needs to be three quotes back.

Paul Heming: But is it a way, do you need to get away from that competitive tendering mindset? Because I’ve got three dry liners, I say to my dry liners at the start of the year, I’m probably going to win three jobs. I’m going to have five dry liners who I’m going to tender with, which means you’ve got an over 50% chance of winning one. Because I’m not going to give two projects to one. I’m always going to spread more risk and have one for each. So you’re almost definitely going to win one. You’ve got 60% shot that then means to the QS or to the commercial department. Project one, great competitive tender, but one goes away. Project two, great competitive tender, but then it gets to project three. And the subbies kind of know that there’s only so much that they’re very likely to win that next one. Does that ruin the competitive tender process? Do you see what I mean? It kind of makes it clear that you’re not going to be competitively tendering. So is there actually zoom out from competitive tendering, a completely different approach that needs to be taken.

Christopher Barber: I understand what you are saying. I think when we say competitive tender, right? Doesn’t need to necessarily be the cheapest price. If that’s kind of might be what you might be alluding to there, it could be on a loads of different aspects like capabilities, current work load schedule, that subcontractor’s got. Performance on the last one. Was it up to scratch wood? Could they deliver this high end scheme or have you got like a social housing scheme that they would be more suitable for? Yeah, so it is really, I just feel it’s that opened full 360 loop feedback loop that it has to go through that. And it, like I said, it won’t happen overnight, but if you’ve got your construction and project teams actively reviewing and giving constructive feedback to that subcontractor from the estimating stage to the tendering stage to the delivery stage, all those phases and the feedback’s going in, then the person making the decision on the next project of who gets it. As well as the pricing and allowances that all come in can weigh that up against other metrics really.

Paul Heming: Yeah. And I think you’re absolutely right because we’re in an environment where we’re all in business to make money, right? So subcontractors understand that main contractors understand that and the price, the full beard has got to be right for you to win any job, right? And I think we’ve covered quite well here, a different strategic thought to how you manage the supply chain. And we should in the second half of the show actually then go into the tender strategy. More specifically, you’ve kind of, we’ve talked there about the company, how you should communicate with your subbies. Let’s talk in the second half of the show about how you communicate in project.
So Christopher Barber, we have talked about the strategic view of the company in terms of humanization of the relationship with the supply chain. Simple stuff, but actually requires thought process. What also requires thought process is I am on the train tracks as a QS, I understand what the company strategy is with regards to the supply chain. I know I’m going to have five relatively engaged, almost like partnered subcontractors who know us, know how we work, et cetera. The question is, and let’s contextualize it, right? I’m going to be an estimator, nightmare situation for me. I’m a QS through and through, but I’m going to be one. So I’m the estimator. We’ve won the job and I’m going to come to you and I’m going to say, Chris, here’s the job. Here’s the tenders that I got at estimate stage, over to you. See you later, I’m off. Talk me through like your thought process. What are your next steps to actually carve out an amazing project tender strategy?

Christopher Barber: Yeah, I mean the first, the most important meeting on a project is that tender handover. Making sure you’ve got the right segments for that meeting set out on the agenda. So obviously forget about all the client stuff. Let’s talk about the tendering, right? So straight into the tendering side for the purpose of this conversation, I would be looking at risks and opportunities. First and foremost, they’re like the two key packages I’m looking at the most. So a risk perspective I’d be looking at CDP packages. So anything that’s got a design portion to it.

Paul Heming: I know like piling groundworks, Emily.

Christopher Barber: Yeah. Well piling, piling word not necessarily groundworks Paul, but Emily definitely would.

Paul Heming: You know, I’m.

Christopher Barber: Yeah. So anything that’s got a lot, has got that kind of design portion. I know it’s going to take more care and attention in that package. And then anything that’s got long lead in items and potentially high finishes. So like a high quality finish would be like a join package that’s also got a really long lead in time. And thinking about like the samples, mockups, et cetera that might be required around that. So that would take a big consideration and something to really kind of delve into.

Paul Heming: Can I ask, because I was always, so you’ve done both. Lead in times. I think that’s almost a bit of a zoom out onto the company wide, right? So how did you know what? So I’m the estimate. I’m handing it over to you. There you go. Chris, how do you know, what are the lead, like average lead times per package? Is that something that you would expect the company to say, groundworks, we need X. Windows, we need 12 weeks or 16. Is that something that should be a company-wide structure as expectation that the estimators should be included in the program? Like how does that work?

Christopher Barber: Yeah. So your estimated will or should identify long lead items to you because they’ve gone through like credit to estimates, they have to go snapshot in time. They’ve got a real short window to kind of price the job.

Paul Heming: Yeah.

Christopher Barber: Allow for risks, opportunities, et cetera. They should not identify anything that’s long lead. I remember I worked on a project in the Barkin once and there was a certain material there that had was a ridiculous.

Paul Heming: Leather wallpaper.

Christopher Barber: No, it wasn’t leather. No, no. It was a certain type of metal profile coloring system. And it was coming from China and the timescales almost didn’t work. So we had to find an alternative in the end. But that was highlighted very early on. So, yeah, estimator in short should allow for it. And it comes through experience as well. But you’ll see your kind of tender program that you would’ve agreed in the contract or outline construction program.

Paul Heming: Should it come from experience? I guess that’s the question I’m asking. You’re a pretty amazing QS, right? But should it come from experience? We’re talking here about tender strategy and we’re talking about companies saying this is our strategy with humanizing the supply chain, building those relationships, et cetera. Should a company say these are our standard leading times across the package and then track them and then have some kind of data feed on that? Because I don’t think they do, right?

Christopher Barber: No, no. I think you’re absolutely right. Almost that standard. So we used to operate an information release schedule, the IRS schedule, that’s so important. And that would be the next phase of the strategy. Because you can then, once you understand what the leading times and the riskier project, the packages, you can then start plotting out your IRS schedule. And that’s, they’re really the kind of centerpiece for a QS in my opinion of how they manage.

Paul Heming: You love the IRS schedule, I mean, to me the IRS schedule was, the information release schedule IRS was a way for me to manage the design process, right? I would manage the design process. Now I was subby to main contractor, but it’d be almost the way that I would cultivate a claim, almost that you would see that there has been a delay on all these things. But for you, you always talk about putting the IRS schedule at the heart of your tendering strategy. What on earth do you mean by that?

Christopher Barber: I feel like I completely agree was the centerpiece for the delay claim. But because we had like start on dates for each package, remember like I was doing high-end resi. So there’s a lot of intricate bits and pieces.

Paul Heming: 20, 30 different packages.

Christopher Barber: Well even more like, I’ve looked back at some old schedules before in my time. Plenty others. There’s a lot going on in that

Paul Heming: Slow weekend, wasn’t it?

Christopher Barber: Yeah. There’s a lot going on, on that kind of, on these kind of projects. They’re very, very detailed and I think that’s what I mean by company to company and project to project. They all differ. Significantly. But for me that would give you cold date, drop date when that architect or M and E engineer or stretch engineer needs to give you the information by. Because if they don’t, it’s going to have a massive impact on your project.

Paul Heming: Well in some ways then it cultivates your delay claim anyway, right?

Christopher Barber: Yeah. But it also gives me a kick up the ass to say you can’t miss this date Chris. Because if you do, you know you’re going to delay the project. So, it’s a bit of a management tool for internal, for the QS and project team and…

Paul Heming: For you yourself as well, right.

Christopher Barber: And management of information coming in. Yeah.

Paul Heming: So let’s go back again, I’m estimator, hand it over to you. We talk about lead times. I’ll say have a look at that one on the windows or have a look at that on audio visual. There’s going to be a long lead time on that. Your process then is to build your own IRS schedule and that IRS schedule, you are then going to use as your own measuring like for tender program to keep yourself on track, but also you’re going to pass it to the client and to the consultant team. Is that right to say this is my expectation if you want me to deliver on the program?

Christopher Barber: Yeah. And there is, I think in the JCT, either the architect is the IRS, but they normally scroll that out, scribble that out and it’s down to the contractor. So we used to do it pretty much every job and it was actually a good process for us to do anyway. It was like literally project starts, start your IRS schedule. Like just get it.

Paul Heming: So how would that look? Because to me I’m instantly thinking that that is only a good thing to do that, actually not only is it a way to manage yourself and to manage your team internally, but if you say to the client, Windows are may be on site on the 20th of April, therefore I need a decision on 1st of January or whatever it would be as per the IRS and then they come back on the first of Feb. That’s actually a great thing client wise, right? To go back to them and say you were late.

Christopher Barber: Yeah. I mean you take your construction program, you take your packages of works that using either the bill of quantities or there’s various ways and just making sure that’s all fleshed out. I do a big element of that, like even listing out the packages and then the start dates and then it would be a collaboration with the site manager and project manager to kind of fill in those durations. And then we’d even note like we’d do deep dive into the spec. That’s what I mean by going into these high risk items and say, do you know there’s a mockup required for that? So we’ve got to account for that within that in these durations and oh, there’s a sample we need to allow for a sample approvable period. Oh there’s drawings required on this. We need a drawing approval period and these extra steps that then you build that out and then you know when you’re going to be comfortable to place that order. And that is such a great process. And that is why I talk if you had a pound for every time I said out.

Paul Heming: Yeah, you did say that a lot. But I think you actually touched on a really good point because I honestly believe there is a lot of construction contracts which people enter into before and they sign it and they’re signing a death wish. And I think you’ve kind of just exemplified a pretty good example because so often you are signing a contract, you sign that contract and you’ve already started on site and there will be ACDP item. Now if there’s ACDP item, what does that mean? That means there’s probably a mockup, there’s probably a sample. There’s definitely technical drawings, there’s definitely an approval process. And just what I’ve said there, I’ve probably plotted out at least 10 weeks, right? At the very, very best. So what you’re actually saying, and now it’s starting to make sense for the pennies after all of these times, Chris, and it’s starting to drop that you are actually saying, you are actually saying I’ve been handed the job by the estimator. I’m picking it up and I’m saying from day dot the piling, the M and E, whatever it is, my task starts minus 10 weeks or minus 20 weeks, whatever it is. And you are instantly putting that back to the client and saying, by the way, you gave me the contract late, I need this now. Otherwise we’re in delay. Because so often the boot feels like it’s on the other foot, doesn’t it? When you are the main contractor, you start and you’ve got a gun point into your head. By doing that IRS process, you’re actually pushing it immediately back. So I completely understand.

Christopher Barber: Yeah. And we used to obviously report on the IRS in every meeting as well, progress meeting with the client. So it’s real open, transparent and you could have these, what’s coming up, what packages are we coming up? Have we got the design information in place? But also like we’re talking about a lot around risks and that’s obviously a big important part. But what we do through that process as well, I would look at opportunities. So provisional sums shouldn’t maybe look at it as an opportunity, but you know, as a…

Paul Heming: Why would you look at it as an opportunity?

Christopher Barber: I think there’s always the provisional sums are an area for you to maximize your, if you consider a tender, right? When you’re tendering, you are going to go super competitive, maybe a low margin because you want to win that project. You got provisional sum. Now it’s, you can almost look at it, it’s like a variation kind of style. I need to maximize the profitability for this item. And that’s how it should be looked at really in my opinion, because at tender stage you’ve gone competitive to win it and you want to show the client how good you are. But now it’s provisional sum. This is just my view, obviously.

Paul Heming: Yeah.

Christopher Barber: I want to maximize that. And then I would also look at equal approved as well as an item for exploration and of opportunity. So I’d look at those kind of areas for opportunity. And what I would do then is then that helps me understand how I’m going to tender each package. So if it’s a provisional sum, I’d be looking at making sure I’ve allowed for absolutely every nut and bolt on that certain element. So I’d be really collaborating with the subcontractor saying like, what attendances do you need? Is there anything else that we need to provide? Is there another consideration, et cetera? Making sure that is robust. I’m not leaving a penny on the table for that item and then equal approved. I’d be looking at that in depth. And going, right, they’re specified this system, its equal approved. When I send my tender out, I’m going to say give me option one as per spec and give me an option two. Your preferred equal approved option.

Paul Heming: So you’ve hit on a really, really interesting point, tender strategy. What is the psyche of your commercial team once you’ve given up, you’re on the train tracks. Taking it back to that example, what is the psyche? And what you are saying is your psyche was, whenever there is an equal approved or provisional sum, your process is, as I understand it, I’m going to go to my five trusted subcontractors. I’m going to speak to them and I’m going to say option one is price, what they’ve asked for; option two is price something that is loads better for both, you and us and we’ll share it or we’ll make it work much better to us. And that this all ties in. I’m going to pull it all the way back now to those conversations. Those pre-tender meetings, those supply chain event days where you’re setting the tone, right, where you say that equal approved or it’s got to be speced as per X. Whenever that happens, if we work together, we’ll go 50-50 on it, but this will be our approach, option one, option two, if we go hard at it, we’ll make more money, it’ll be better for both of us. And that sets the standard. If I was a subbie hearing that from a main contractor and I was, I’d love that. Right? Do you see it all filters back to that. What are your themes? And also going back to the leading times, I was saying to you there, should a main contractor have standard leading times for Chuco, Rainer, all these different types of windows, blah, blah, blah. And we’re going to talk about windows as all have got. But you see if you said to your dry aligners or to whoever, every three months we’re going to have this meeting, we’re going to have this conversation together and you’re going to tell me all about your specialism. You’re going to tell me all about the changes in pricing, all about the changes in lead times, and we’re going to have that for our estimators. So they’re going to include it at all different levels, then seeps down to the QSs and then seeps down into how the QSs runs the job in exactly the way you are describing. How much better would that be?

Christopher Barber: That would be far better landscape for everyone, wouldn’t it? And it is difficult one because I was doing that without…

Paul Heming: You were doing it just because you were good QS.

Christopher Barber: Yeah, but I was doing that without the top level supply chain strategy. And that was one of the big issues. I just didn’t have that pool of…

Paul Heming: Why was it an issue then? Because if you are managing the job intelligently and well as a QS, what was holding you back by not having that big strategy.

Christopher Barber: Lack of supply chain really to kind of do that collaboration with who, preexisting relationships that you could lean on and go into, having to foster new relationships is a difficult process and it’s time consuming. When you look at the volume of packages that we used to deliver and the kind of diversity of them and the nature.

Paul Heming: How many would you have? Right? So you as a, again, you’d have been working on, not you personally, but that company would’ve been working on 3, 4, 5 different jobs per year or at a time. How many QSs, sorry, how many subbies would you have per package roughly at that company? And why did it feel like that wasn’t enough?

Christopher Barber: Basically one per package. Literally it was kind of around that and it was almost as good as your last job kind of thing. No real detailed kind of feedback loop. What happened? Real analysis. Whose fault was it? Was it just finger pointing, et cetera? The common things that happen, rather than it being a constructive approach to say…

Paul Heming: Strategic.

Christopher Barber: Yeah. Constructive and strategic. So if they didn’t perform, why didn’t they, let’s understand that, it’s not pointing fingers at anyone. Was it the wrong type of project for them? Was that the issue? Right?

Paul Heming: Did we have the wrong lead times? Was the scope wrong?

Christopher Barber: Yeah.

Paul Heming: Did we run the IRS, did we speak to them beforehand about how we wanted to manage the job? Did we bring them in? Did they trust us? Blah, blah, blah, blah, blah. It’s all the same thing, isn’t it?

Christopher Barber: Yeah. And my firm believing is you can’t deliver what that tender strategy that I just talked about there. You can’t deliver that without the supply chain strategy.

Paul Heming: So in short, no matter how good your QS team and your commercial department is, if you don’t have the supply chain and the relationship with that supply chain, you’re going to struggle.

Christopher Barber: Yeah.

Paul Heming: Okay. I mean, I think for the first future of contracting episode, we’ve covered quite a lot there. And my takeaways are obviously first and foremost that humanizing, that subcontract supply chain relationship, bringing them in, holding those events in the way that sedan are doing, I think it’s a really, really great way to work. Humanizing those relationships. IRS, you’re going to love that I said that, but I’m on board with you now. We’re going to go with the IRS and then lead times data, who’s holding that data in the main contract department and how is that helping the estimator, how is it helping the QS, et cetera, et cetera. I think we’ve covered quite a lot there. Chris, what do you think?

Christopher Barber: Yeah, I think we sold it, haven’t we?

Paul Heming: I wouldn’t say we’ve solved it, but we’re going to have many, many more of these future contracting episodes to come back to. And guys, don’t forget because if you go to the show notes right now, you can leave us a nice reviewing rating, which you’ve probably already done, but click on the link, you’ll be able to download the eBook, see what we’ve written about on this topic in a similar vein to how we’ve talked about it. Now you also get a little bit of Shakespeare and flare in there for me. I will be back next week. Chris, and I’ll be back in four weeks talking about another topic. Chris, thanks for coming on the show, mate. That was great. Always a pleasure. Thank you. Catch you later. Cheers.

Creating a sustainable tender strategy for Main Contractors

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