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Bidding for contracts

13th February 2015

By: Terry Mackenzie-hoy

  

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You all have heard of John Glenn. Or not? You will know, I think, the phrase he used while waiting to launch on a rocket that would make him the second person to orbit the earth: “I guess the question I’m asked the most often is, ‘When you were sitting in that capsule, listening to the countdown, how did you feel?’ Well, the answer to that one is easy. I felt exactly how you would feel if you were getting ready to launch and knew you were sitting on top of two million parts – all built by the lowest bidder on a government contract.”

Always good for a laugh. The system of asking contractors to give a price for work in competition with other contractors is not recent – if you want to annoy a Frenchmen, just tell him that the British built the first French railway lines from 1841 to 1844. It is true: the first French railway company was the Paris & Rouen Railway Company. Briton Joseph Locke was appointed its engineer. He considered that the tenders submitted by French contractors were too high, so he asked British contractors to tender. Two British contractors experienced in rail construction in Britain, Thomas Brassey and William Mackenzie, tendered jointly and got the contract.

In 1841, all the work was done by hand by gangs of labourers who worked to a system which Brassey and Mackenzie had perfected. It was this system of work, at which they were experts, that allowed Brassey and Mackenzie to bid low to get the contract. The modern tender process for construction projects is probably quite fair – all the tenderers have to use similar materials and have similar labour and fixed costs. The unknown is the profit they may or may not make and, more recently, the degree to which the professional team have messed up the design and hope to blame the contractor.

However, when the tendering process starts being applied rigorously to obtaining professional services from architects and consulting engineers, it is a bit like asking a group of heart surgeons to give the lowest price for a cardiac bypass. Well, not a bit like. Exactly like. The matter of ability and experience go out the window and the matter of cost becomes paramount, which greatly affects the service rendered.

You only have to look around to see that there are good architects and bad architects – good consulting engineers who do a design which is the best economically and functionally, and bad consulting engineers whose design is poor and results in massive variation orders on which income to the contractor will then afford him a trip for his extended family on a Queen Mary cruise around the world. Twice. Why on earth then get professionals to bid on professional appointments? Who benefits? The minimal benefit obtained from a R 50 000 fee reduction on a R60-million building is soon sucked up by the carpet required in the director’s office.

The agony which results from a consulting engineer or architect doing a minimal design, owing to having been forced into accepting a minimal fee, results in badly executed and uncoordinated projects. I guess it is not going to change any time soon. But it should and it will. The quantity surveyor, project managers and clients of today have forgotten what it was once like when there was a lot of work around. Less than ten years ago, if you asked an architect or a consulting engineer to give a fee proposal in competition with others, you would have been handed your hat. There were not enough professionals to do the work and you would be lucky to get any response. If you expected them to be sooo impressed that you were considering them to do some contract which was your baby you would be wrong . . . and these times are going to come again, sooner or later. Asking architects or consulting engineers to bid on professional work upsets them. It prevents them from doing their best. It places them under financial pressure they do not want. And, when the good times come again, they will remember this with bitterness. It is not at all a good idea.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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