Construction downturn - renegotiate

[edb49]

So there's been quite a bit of news recently with Barratt, Persimmon, etc laying off staff. I'm assuming there are lots of smaller subcontractors out of work too.

We got some quotations for some construction work about 6 months ago and just about to push the button. It's a mix of general builders work and groundwork, contract is a low six figure one.

Question is, I can't help but think we should go out and get quotations again, with a big drop in construction people should be keener to win the business.

Has anyone had luck recently with getting people to requote on business because of the downturn?

[m3ser]

edb49 said:

Has anyone had luck recently with getting people to requote on business because of the downturn?

Can't quite see this happening as the cost of building materials has risen
ie: catnic lintels rose 23% last month due to the rising cost of steel

If the quotation you had was a genuine, and not an inflated price, then i doubt he would be able to reduce his price due to the rising costs

No harm in trying though

[edb49]

The current quotation is fixed so I can always take that as my backup. I'm just wondering whether it's worth the hassle to go through the tendering process...

[Mattt]

It doesn't take much to put the feelers out and see, seeing as you already have the old tender documentation.

Is the original quote still valid 6 months on?

[edb49]

The original quotation was reconfirmed last week.

[Ash 996 GT2]

edb49 said:

The current quotation is fixed so I can always take that as my backup. I'm just wondering whether it's worth the hassle to go through the tendering process...

What about the hassle to the poor sod who quoted you in the first place.

This type of thing makes me sick.

We all have to make a living, no doubt you took the cheapest option in the first place.

No offence, but think if soemone did it to you, if if they do, break the damned chain and give them a chance!

Rant over.

[edb49]

Ash 996 GT2 said:

edb49 said:

The current quotation is fixed so I can always take that as my backup. I'm just wondering whether it's worth the hassle to go through the tendering process...

What about the hassle to the poor sod who quoted you in the first place.

This type of thing makes me sick.

We all have to make a living, no doubt you took the cheapest option in the first place.

No offence, but think if soemone did it to you, if if they do, break the damned chain and give them a chance!

Rant over.

I disagree - they've only quoted, we haven't accepted. It isn't like we're gazundering anyone. You can bet your bottom dollar that if materials prices made the job unprofitable they'd be doing everything they could to pull out, and that's a two way street.

[taffyracer]

Personally, if i was that contractor and spent time and energy preparing a quote to then be asked to reprice downwards to then be asked to re submit a price I would politely tell you to f off. I am a sub contractor, luckily I work solely in commercial and for blue chips instead of domestic market and don't need to scrabble for low margin work, but this sort of thing is what bring the whole industry down, devalues it for everyone, if there is one thing I have learned is that cheapest is always the worst when it comes to builders work and I for one would not work for a client that has that sort of approach

Edited by taffyracer on Monday 14th July 09:58

[Ash 996 GT2]

taffyracer said:

Personally, if i was that contractor and spent time and energy preparing a quote to then be asked to reprice downwards to then be asked to re submit a price I would politely tell you to f off. I am a sub contractor, luckily I work solely in commercial and for blue chips instead of domestic market and don't need to scrabble for low margin work, but this sort of thing is what bring the whole industry down, devalues it for everyone, if there is one thing I have learned is that cheapest is always the worst when it comes to builders work and I for one would not work for a client that has that sort of approach

Edited by taffyracer on Monday 14th July 09:58

Bingo.

I get fed up with going to see clients, they say they will not pay for consultancy, I feel sorry for the so tell them what they need to do, they then go and buy the lowest cost kit from the net and then install themselves.

Of couse, wehn it goes wrong we charge for fixing.

There is no trust whatsoever.

I know there are dishonest people out there, this then tends to tar us all with the same brush, but we are not all the same.

Let them make a living.

[Plotloss]

Ash 996 GT2 said:

I get fed up with going to see clients, they say they will not pay for consultancy, I feel sorry for the so tell them what they need to do, they then go and buy the lowest cost kit from the net and then install themselves.

Of couse, wehn it goes wrong we charge for fixing.

Would I be right saying that they then get pissed off that they have to pay for rectification which was only needed because of their own penny pinching?

Sounds all too familiar.

[DucatiGary]

most of the new biz we win is fixing mess other people have screwed up by trying to do things on the cheap.

usually resulting in buying most things twice and more than double the initial outlay should they have not tried to cut corners/costs in the first place.

its a false economy but don't tell everyone or we might not have as much new biz!

[Adam T]

What documents have you tendered on? JCT 05? - which version?

Some may be in your favour - some may not.

Have you got everything in writing?
Contractors are more keen at the moment, and some are winning jobs at cost, just to keep people busy - and tring to make £ up with variations and re measures etc - this is why the documents you tendered n will be vitally important. was it a BoQ, or SoW? D& B?

[Sam_68]

m3ser said:

edb49 said:

Has anyone had luck recently with getting people to requote on business because of the downturn?

Can't quite see this happening as the cost of building materials has risen

We've renegotiated on just about every deal we have, and have achieved substantial reductions on all of them.

Unless you've actually accepted (signed) the contract, renegotiate. You'd be daft not to.

[rsv gone!]

Sam_68 said:

m3ser said:

edb49 said:

Has anyone had luck recently with getting people to requote on business because of the downturn?

Can't quite see this happening as the cost of building materials has risen

We've renegotiated on just about every deal we have, and have achieved substantial reductions on all of them.

Unless you've actually accepted (signed) the contract, renegotiate. You'd be daft not to.

When there was lots of work about, subbies (and main contractors) put larger margins on projects.

Now tenders are being slashed, some of this needs to be passed down the line or we'll all go bankrupt.

[Mattt]

IIRC, during the last recession, tender prices went down around 15% whilst costs rose 10%.

[taffyracer]

the problem with reducing their prices like that is that the contractor will simply have to cut his own costs, how exactly do you think they do that?! Cut subbie prices and cut material quality, I have clients that ask to reprice continually and I know I lose out as i'm not as cheap as others but I will not slash margins because they are feeling oppportunist, would prefer to lose the business and focus my time and energy on servicing the better high street/retail groups that i deal with than take turnover for turnover's sake

[edb49]

Seems there are two distinct opinions here, split understandably between the buyers and sellers. I think it's a buyers market at the moment...

[Hobo]

With sales prices on houses being hit & a flood of labour just been put on the market it makes sense to try & recoup some of the loss on the build itself.

It you don't know any of the contractors then send it out again