Civil Engineering Reference
In-Depth Information
then we will start negotiation.' A somewhat cynical approach to nego-
tiating a deal, but experience does show that it might be realistic. Such
is the culture, fuelled by claim specialists, and it makes genuine claims
very difficult to settle. How much better it would be for members of the
construction industry in the UK to achieve a fair price for the work at
the beginning and so channel their creative resources into completing a
high-quality job on time and within budget.
1.2.3
The squeeze game
The Housing Grants and Regeneration Act 1996 attempted to deal with
contractors squeezing sub-contractors by withholding money and pres-
suring the small firms into lower prices or carrying out additional work
unpaid. There is no doubt that many small firms are still in existence
because of the Act and so it has worked at that level. However, it rarely
brings finality and it is not an unusual experience for squeezing to hap-
pen all the way down the line: employer to contractor to sub-contractor
and beyond.
1.3
Culture
1.3.1
Adversarial
The construction industry seems to love confrontation. The method of
obtaining the work and the process of agreeing the final account are
founded on fighting it out. Competitive tendering pitches contractors
against each other, the theory being that they can bring special expertise
to the construction process that will give them an edge and so undercut
their rivals. In reality, competitive tenders are won as much on estima-
tors' mistakes, or over-optimism, as on expertise or unique resources.
Even reputation comes second to the lowest tender, and although the
consultants usually say in their tender conditions that their client will
not commit to accepting the lowest, or any, tender, it is unusual for
building owners to pay significantly more than the lowest price just
because of another contractor's reputation. It begs the question of why
they invite the lowest-priced contractor in the first place (and put them
to the significant cost of preparing a detailed tender) if their tender was
not going to be accepted. In theory, negotiating tenders removes some
of the confrontation and partnering removes it totally. Unfortunately,
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