Clients need to look beyond exploiting UK plummeting tender prices if they are to remain competitive when the market recovers
We are still seeing a significant decrease in UK tender prices as workloads continue to fall back.
With any market recovery not anticipated much before mid 2010, competition for the contracts still available is becoming increasingly cut throat.
But while the temptation for many clients might be to force suppliers to further reduce contractually committed prices, pushing these prices to loss-making levels is a false economy that, while yielding short term cost savings, will only jeopardise market recovery long term.
If this trend continues to grow it will cause the overall market to contract and lead to hugely inflated tender pricing when the market finally emerges from recession.
Now is the time that contractors and clients need to pull together to cement working relationships to drive improved performance and productivity as well as value for money.
A robust, well managed supply chain will be vital as we move out of recession.
Suppliers with demand sufficiently spread not just in the UK but across Europe, would be prudent to use this as a buffer against the downturn.
Re-deploying skills and services to the continent where contracts and prices have been less impacted by the downturn and remain relatively buoyant, could be a shrewd move long term.
This is something that we as a business have done successfully through our operations in Europe to protect our competitive edge while the market recovers.
Craig Maunder is partner at UK and European cost and project management consultant ChandlerKBS.
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