Some people in business are simply mad fools.
Today we received a letter from a potential NHS hospital client that we had been unsuccessful in our tender to design and manage the refurbishment of a ward. Now, understanding that work was thin on the ground we decided to go in, as we called it, “very tight”.
But we were soundly beaten to the contract by a firm that bid close to 25% less than us. Now we run a tight ship and our fee bid was, we thought, very very competitive even in today’s market. So I ask myself – should we have discounted heavily to ensure that we won the contract?
Well, if we had done, that is taking 25% off of our fee bid, I would be entering a contract where I knew we would be making a loss.
More and more I hear of people loosing tenders to companies that seem to have submitted bids that are economic suicide. This is not good for anyone and certainly not the client. In our work we manage tenders for construction projects of all shapes and sizes but we know that each job “has a price”. That is a price where the supplier can actually afford to supply the service, produce the deliverables and keep to the required quality and specification. Employing someone who you know will loose money can result in only one result – poor quality work that will cause additional costs as sure as eggs are eggs!
Comments