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Tender v budget


'All of the tenders were over budget, the client is considering what to do.'We have heard that on at least four major ground investigation contracts in the last year - what is going wrong and whose reputation suffers?

From a ground investigation contractor's perspective, we see the client and their appointed advisor having undergone long and detailed discussions covering the technical requirements, time constraints and cost expectations of a project before pressing 'the let's get this job on the road' button and putting the contract out to tender.

How disappointing it must be then when the completed tenders are opened, revealing the cost of delivering the desired technical specification in the required (and by now typically critical) time period is over the allocated budget?

What effect does this have on the project?

At best, a delay while additional funding is discussed and obtained or a compromise in the scope of works can be found to deliver work within the original budget, at worse, a re-tendering process or scrapping of the project.

All of this will leave the client wondering what has gone wrong, the advisors struggling to maintain their reputation and the contractors feeling they have wasted their time and questioning the competence of the advisor.

One expects that it is not the advisor that takes the blame on the chin but that the contractors are portrayed as the villains of the peace - is this reasonable?

Hopefully an enlightened client will see the facts of the matter - it will have got at least three tender prices from specialist contractors, prepared by professionals who are pricing this type of work as a living, each striving to out-do his fellow estimators and secure the work for their company.

Ground investigation is a highly competitive business. If tenders are 'over budget', then it is the budget that is incorrect - not the tender prices.

What is going wrong- Pricing a major ground investigation is a complex matter.

Without details of the budget make up it can only suspected that insufficient allowance is being made for mobilisation and site facilities, staff attendance, site support, IT and the office support essential to deliver large reports. It is not just a case of pro-rata up from a medium sized project.

The reputation of the geotechnical industry as a whole suffers - it is hard enough to persuade clients to invest in ground investigation in the first place.

What can be done- Perhaps the client should be more rigorous in selecting its consultant and those with little experience should acknowledge this or perhaps there is a need to scrap the tendering process altogether in these cases - it is not working - why not select a contractor, scope up the works and agree risk/reward.

Coming in over budget does no one any favours.

Mike Newton, business development team, Soil Mechanics

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