B&ES President blog ‘Bittersweet pitfalls of low cost tendering’

Our markets are definitely improving – the signs of recovery are clearly there, but that doesn’t mean we can relax.

One of the consequences of a prolonged recession is the pressure on prices caused by too many companies chasing too little work. Some prices are so low they simply defy commercial logic. The outcome of this sort of rash behaviour is inevitable. As Benjamin Franklin once famously said, “The bitterness of low quality remains long after the sweetness of low price is forgotten.”

Many clients now think low cost is the norm and will not be keen to loosen the purse strings just because business is picking up. Many see keeping the pressure on suppliers as the best way to boost their profits without thinking about the likely long-term consequences. We have to be cleverer than that.

Many contractors will follow up a low cost bid by cutting corners to try and make a profit. This inevitably means inferior materials and shoddy workmanship. By the time the client realises they have bought a pup, it is too late to do anything about it.

Low upfront prices usually lead to long-term pain – often in the shape of high energy costs.