Getting contracts

Andriy · Feb 14, 2006

With the Olympics 2012 and some major regenerations projects in London there are many building contracts on the table. Still most of the packages are to big for small businesses, because in many cases company can be awarded on the contract value of 20% - 25% of company turnover. In order to secure larger contracts smaller businesses has to explore ways of collaborating.

Any thoughts on that and has anyone had some experience in this.

fastfences · Feb 14, 2006

Hi Andriy,
A lot of the smaller businesses do not have the workforce and stringent trades registration criteria so often sought by larger developers. Also, because the margins offered by some of the larger developers are extremely low, it means that the samall guys stay within the more profitable arenas in which they work.

How, though, would we collaborate? If, for instance, a developer wanted 1,000 metres of fencing, are you suggesting that 5 of us get together and tender a joint proposal/quote? I think all the complexities of partnerships would then be borne; are the shares equal?, why is my team doing more and getting paid the same?

I reckon it would be a minefield, but I'm certainly receptive to, and look forward to, other contributions.
Cheers, Nigel

WakingDragon · Feb 14, 2006

Pitching directly for the big stuff (whatever sector you are in) is going to be difficult and bureaucratic.

Another approach is to look at all of the companies currently bidding for work, or those likely to receive the tenders, and target them as possible customers. I would have thought in your industry more than any other they would turn to smaller companies to handle any shortage of skills etc that might arise because of poor planning and/or changing deadlines.

We are taking that approach and are having some reasonable success in getting in with the major bidders.

cqueen · Feb 14, 2006

You know 'the Stig' from top gear? I've read his book, its really good if you're into motorsport,
but anyway, his dad was a painter & decorator. He & the family were waiting in the airport to go on holiday.
His dad was a very chatty type and got talking to these oil rig owners. He managed to convince these two that he painted oil rigs for a living and a short time later he won a multi million pound contract to paint their oil rigs! how about that for a blag?!
But the money went to their heads (stigs parents) and they bought silly things like aeroplanes and they ended up loosing it all.
I know this story is true because my girlfriends grandparents are best friends with them (stigs parents).
Sorry, I'm such a name dropper lol!

Andriy · Feb 14, 2006

To collaborate with others can bring some difficulties, still if I can do a project that worth around 1m and have budget just over 1m I do not have any chance to get it. I think it is possible to get together for some tenders, for example you will bid for one and I will bid for the different one as one team that have turnover 3m.

Tazuk · Feb 14, 2006

The tenders and the plans have still to be completed by the LDA and the olympics committee. I have had some discussions with these people already about 2012 and you will find that your local development agency could help you along the way.
Terminal 5 was a massive project that subcontracted smaller companies to do some of the work.
There is always a chance for everyone and building a group of companies to jointly tender is a good way forward.

Pebble Communications · Feb 15, 2006

Business Link Kent are doing a lot on this - I'm not sure if you've missed it, but they were planning a conference on how to get in on the Olympics work. Worth checking out their site.

Andriy · Feb 15, 2006

Spoke to LDA people and they say they will run series of meetings on this subject. But they ask to bring some competitors as well to discuss possibilities to collaborate. It's quite interesting.

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