Tender Pricing Environment of Subcontractors in the United Kingdom: Fid-Bau Portal

Tender Pricing Environment of Subcontractors in the United Kingdom

Laryea, Samuel / Lubbock, Alex

Contractors rely significantly on quotations from subcontractors to price a tender. However, much of the research carried out in the United Kingdom (UK) on construction-tendering has been done from the perspective of the relationship between the contractor and client. This paper addresses that gap by identifying and examining the major barriers to effective pricing of tenders by subcontractors and the business environment of their commercial relationships with contractors. A questionnaire study involving 94 subcontractors and semistructured interviews with five of them was conducted in 2011. The primary barriers to providing better cost-certainty and quality of response in quotations to contractors relate to quality of documents, bidding time, competition, resource levels, information and communication technology, unethical behavior by the contractor, uneven collaborative relationships, input specificity, level of relationship that exists, and the time to assimilate and provide the output response. Contractors and clients should help address the barriers. For contractors, this can enhance competitiveness, profitability, and supply-chain relationships. For clients, this can lead to better project outcomes because subcontractors form a major part of the organizational structure of projects. Addressing the concerns expressed by subcontractors may also require a collaborative approach, perhaps in conjunction with an industry-wide investigation and plan of action.