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We’re all agreed: the way out is reform, not suicide bidding

Paul Morrell takes stock of the Construction News Survey 2012.

The current trading conditions are as tough as any I can remember in 40 years in the industry, and it is valuable to have a broad survey of just how the industry is thinking and acting in response.

Some findings are not surprising. A significant proportion of the industry’s fortunes has always been linked to public expenditure, and as programmes decline it is understandable if people feel the government could be more helpful.

Government is acting, particularly where the twin purposes of tackling the deficit and stimulating growth coincide.

The package of measures announced in the autumn statement, infrastructure plans and the detailed project pipeline are good examples.

On another key finding - the critical importance of getting paid, particularly given restricted bank lending - I know that the moves made on government contracts to require timely payment down through the supply chain and to make greater use of project bank accounts have also been welcomed.

What is encouraging in the survey, though, is the sense of realism and preparedness, with 59 per cent of businesses thinking they are better prepared for continuing tough times, and the recognition that the way out is not through ‘suicide bidding’ but through reform - with greater supply chain collaboration being the number one response.

We need to move the focus of collaborative relationships from those between clients and main contractors to those operating in the supply chain. That is where the potential for innovation and a better offer to clients lies, and in BIM (also recognised in the survey) we have the tools to support the process.

A major Cabinet Office priority for 2012 is to provide the flexibility for such innovations in the way that programmes are brought to the market, and to continue to develop procurement arrangements that encourage collaboration - one route to a happier new year.

Paul Morrell is the government’s chief construction adviser

 

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