Want to grab a client’s attention? And keep it? In an fiercly competitive market, you have to offer something extra if you are going to win that juicy contract. Mark Leftly looks at the increasingly inventive ways companies are pitching for work and talks to clients about what they look for in a specialist …
Innovation, that is the first thing you want from a specialist contractor.” So says the man behind the procurement programme for one of the country’s foremost developers. “Innovation” is one of those words that can overused, but to Paul Lewis, operations director at Stanhope, and other big clients, it really gets to the heart of the matter – if a specialist wants to win work, it needs to prove that it can add something different and improve the overall building, not just slap on a roof or chuck on some cladding.
Counting the pennies
Ian Callaghan, construction development director at Somerfield, nicely sums up what clients want: “It is a whole blend of things. Ability to perform is a given. Then it is the extras that set people apart, the willingness to recognise what our true needs are, such as looking to innovate.”
The ability of Somerfield’s specialists to come up with sophisticated, cost-saving ideas is vital in a construction programme that is the fourth biggest among retail clients - £200m in 2004 alone and just £2.5m behind Tesco. Callaghan singles out one specialist, Nottingham-based Sherwood Interiors, which does Somerfield’s ceilings and dry lining. Together, they have come up with a contract that allows Sherwood to feel secure but reap savings for Somerfield. For example, if there is a £100,000 job, Sherwood’s profit would be ring-fenced at, say, £20,000. Client and specialist then work at attacking the cost. Any saving is passed back to Somerfield, but Sherwood has the benefit of always making £20,000 no matter what happens, and can earn more if the client asks for any additional work.
Land Securities Trillium says it looks primarily at specialists’ strong track records when picking its team. This approach has helped it achieve its incredible growth in the property outsourcing market. Having started up in 1998 it now has a turnover of more than £1bn and owns or manages more than 8000 properties. Trillium is the biggest spending office client for construction at £1.1bn, 60% of which is new build.
It’s all about coming up with new, more economic ideas. Keith Maynard, Trillium procurement team leader, says that if he has to choose between two experienced demolition companies it will always be the one with the sophisticated kit; if it is two decorating contractors, it will be the one that has modified the paint so it does not smell.
An example Maynard offers is Cooper Lighting. The Canadian company, which has its UK subsidiary is based in Essex and South Yorkshire, has been manufacturing lighting products since 1956, but has continued to grow in this relatively narrow field because of its development of ideas, such as vandal-resistant lights. The product Maynard is rather taken with is a large light for offices that does not require the usual amount of wiring. It still requires a qualified electrician to install it, but because the wiring is much simpler these can be found among other construction staff, negating the need to hire an electrical fit-out firm. As Maynard puts it: “It saves us time and in this game time is money.”
Trilliums sister company, Land Securities Development, is another big spender, procuring £620m of work last year. Its head of project management is Steve McGuckin. He says the specialists he appoints must have “a whole range of technical capabilities”. According to McGuckin: “A cladding specialist, for example, must be able to look at acoustic performance and advise architects and engineers on the Part L [energy regulation]. The specialist should enable the architect to be creative.”
McGuckin praises the UK arm of German cladding specialist Schneider for its work on Land Securities’ pair of £200m-plus schemes at London’s White City and Bankside. The specialist has come up with a system that reduces the amount of time workers are involved in handling the materials. The trucks come alongside the building and materials are then hoisted on to a robot that moves across the slab. “Schneider has brought in a high degree of automation,” explains McGuckin, “It is an assembly line across the whole process from bringing in the material to its final location.”
The precious few
Ability to perform is a given. Then it is the extras that set people apart, the willingness to recognise what our true needs are
Ian Callaghan, Somerfield
Schneider is a giant, and McGuckin stresses that major, complex schemes can only be handled by a very few specialists. Perhaps the limited number of specialists is one reason that Geoff Wright, construction and project management director at developer Hammerson UK Properties, holds them in high regard: “Those specialist subcontractors are the ones doing the real work.”
Hammerson procured 40 projects worth £460m in 2004, and its more famous schemes include shopping centre Brent Cross in north west London and the Bullring city centre development in Birmingham. Wright says that there are only about four lift specialists that are able to provide the quality it needs for its lifts in major schemes. “I compare it to cars,” Wright says, “You can get a clapped out one that can do 60 mph. Although a BMW might not go any faster it’ll give you a better quality ride.”
Lifts are surprisingly big business: a contract on a major scheme, which will more-than-likely include escalators, can be worth £4m-7m. On high-rise projects Wright particularly favours Mitsubishi and Finnish specialist Kone. The former worked at Hammerson’s 13-storey, £80m-plus One London Wall scheme a couple of years ago. Kone supplied about 20 lifts and four escalators for the developers £190m Bishops Square scheme in London’s Spitalfields in central London. Wright says: “With lifts like these you can get to the 25th floor of a building without realising that you have even moved. Others can be bumpy all the way up.”
In addition to good cost-saving ideas, clients are looking for long-term partnerships. At Stanhope Paul Lewis knows his relationship with specialists is pivotal: “The biggest thing you want is a long-term commitment, so the trade contractors need to feel they have an important role alongside everyone else.”
With the scale of the projects Lewis is talking about this is understandable. Stanhope is responsible for one of the country’s largest regeneration schemes and the key project driving the 2012 Olympics: Stratford City.
Stanhope’s projects have got the subbies in early in the process to ensure they can work more quickly and economically. Lewis says Stanhope has done this by negotiating all of its work with just two or three specialists in each discipline.
So, the message from clients is clear.
A specialist has to be efficient and solid.
But simply being good at what you do is not going to win any specialist the juicy jobs from the big boys. From painting contractors to lift specialists, there is one thing you must all do: innovate and come up with the new ideas that will impress those in charge of the billions of pounds of work that is out there.
Specialist Contractor Awards 2005
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