28.05.2019

Blog: Best value, lowest price tendering & market conditions…

Does lowest price tendering give best value to the Client in an increasingly volatile market?

Greater Manchester Chamber of Commerce, Southern Construction Frameworks (SCF) and North West Construction Hub (NWCH) have collaboratively provided an internship for a Construction Project Management undergraduate student from the School of Built Environment, University of Salford.

Research exploring the question “Does lowest price tendering give best value to the Client in an increasingly volatile market?” will come in the form of a two part study over the next few months.

Firstly, a literature review, will assess the content and evidence within various industry reports that promote collaboration and supply chain integration.  

Secondly, supplementing the findings of industry literature, we will work with new and existing clients to gauge the awareness of two stage procurement routes in the public sector construction market. We will challenge the myths around cost and value to gain a perspective on why industry recommendations aren’t gaining the traction they deserve.

Each Southern Construction Frameworks and North West Construction Hub project is monitored against key performance indicators of which consistently surpass the national average. In addition, the strength in providing social value is something we are proud of, allowing public sector construction projects to benefit a wider range of stakeholders in the local community. 

As the UK construction market is as volatile as ever and the labour shortage is set to increase as the UK leaves the EU, to date the North West Construction Hub, through its projects has seen over 77,000 people employed, 60% living locally plus the introduction of over 1600 apprenticeships. In addition, Southern Construction Frameworks have proven that for every £1 spent in the pre-construction phase their framework projects can provide a return on investment of £13 worth of added value benefits. SCF have also proved cost reductions in the pre-construction phase of 1%, challenging the myth that two-stage procurement is more expensive than single stage and 90% of projects complete their pre-construction on time compared to a national average of just 59%.

The UK construction market is as volatile as ever and the labour shortage is expected to increase as the UK leaves the EU. Both the North West Construction Hub & Southern Construction Frameworks are committed to mitigating this risk through collaborative working. This is closely monitored throughout projects delivered via the Frameworks.

North West Construction Hub & Southern Construction Frameworks have further mitigated risk, by carefully and rigorously procuring contractors. Strong relationships enable the expertise of the contractors to be utilised by Clients from as early as RIBA stage 0. From an initial idea, we can facilitate early contractor engagement  to support the scoping of projects, to enable the design and development of a project of more value than previously envisioned. A contractor can be procured in as little as 6 weeks.

The nature of the construction industry can be adversarial and focus too much on cutting costs and not enough on building value through collaboration. Since ‘Constructing the Team’ by Sir Michael Latham in 1994 countless reports call on collaboration as a must in the future of the UK construction industry. When you want more than just a building, North West Construction Hub & Southern Construction Frameworks  suites have been proven to deliver projects that generate less waste, less duplication, increase local engagement and greater efficiency from long-term relationships.

 

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