The landscape industry has had a rough few years since the economic downturn, in a boom and bust industry the 'boom' is certainly over for the immediate future. In the landscape construction market in particular,there is a low level of activity out there and competition levels are high as landscapers battle to maintain turnover and try to stay in business. Faced with a decision of trying to make a profit and failing to win any work at all, or just breaking even and trying to claw back as much as possible through claims and variations once the project is underway.
'Cost Price Tendering' is defined by submitting a tender for the same value it costs to do the work, in order to win work, maintain turnover and skilled labour, and attempt to make money back during the contract on variations. When this approach to tendering goes wrong, the results are usually poor quality, poor service, disputes, and contractor insolvency. Desperate contractors may take the gamble and bid too low - your lowest price tender may not look so good when the business goes bust half way through the process and you are left with a building site instead of that garden your client is expecting.
Tender evaluation seems to only encourage this form of bidding, lowest price as opposed to best value is a lose-lose situation for both client and contractor. What if the contractor was so desperate to win the job that he not only cut out profit, but also failed to cover his overheads? No company can survive very long with negative cash flow.
A comprehensive pre-tender evaluation should be the first step to reducing risk. If you are expecting the project to be completed in an unrealistic time frame at a low price, quality is sure to suffer. If the bidder has missed something or excluded some items to provide a low tender price, the project is likely to end up over budget and over schedule in order to make the changes needed to meet your requirements during the construction phase.
When buying a new television are you going to go for the cheap no-brand fuzzy picture poor quality model that you can only get a few channels on and you fear will blow up within the year or the high quality brand made sharp image extended warranty model that does everything you need it to and comes with 5 star reviews. It might cost you a bit more in the short term but it's going to last you 10 times longer and you know you will enjoy watching it, and, should anything go wrong, you know you have the back up to get it repaired. These are the thoughts that go through most peoples mind when making a decision on spending a few hundred pounds on a TV, so why should these decisions on quality not be used when spending a few thousand pounds on landscape work?
Landscape designers & architects need to become more involved in tender valuation and contractor appointment, even if this is in a minimal way. References should always be sought and checked out prior to contractor appointment, by both the client and the design team. The production of itemised Bills of Quantities will also help with contractor appointment and allow clients to compare ‘Apples with Apples’. At the end of the day, you get what you paid for.