A better deal for sub-contractors & clients?

31st January 2017   |   Jamie Barrett   |   Reading Time: 2 minutes

Last week an article in Construction Enquirer discussing the unfair deals that Main Contractor QS’s are cutting for their sub-contractors was read with interest by the Evolution5 team. We think there’s a way to get a better deal for everyone.

Many sub-contractors are SME’s and as an SME ourselves we truly understand the pressure that can come from being part of a national, or multi-national company supply chain. Evolution5 provide a range of construction consultancy services including quantity surveying – and the views of our QS team on the issues raised featured in this recent post.

Today though, we are looking at how another of our services could address the problem of aggressive cost cutting for sub-contractors and offer a better deal for clients and sub-contractors. Construction Management, an often misunderstood delivery route, offers an alternative to the typical route of appointing a single main contractor to deliver a construction project from start to finish.

By its’ very nature, Construction Management, develops a collaborative approach to delivering a project.

Construction Management, better deal, shopping centre

Early involvement in the project process allows the construction manager to add their technical knowledge of construction and buildability, to contribute to the financial planning and, in turn the development of the budget. Similarly, the earlier specialist contractors are involved in the development of the project, the sooner realistic designs and cost plans can be agreed. Subsequently, there is less opportunity for financial disagreement during valuations and, ensures matters of cost certainty are agreed and set earlier in the pre-construction process. This in turn reduces the need for cutting trade contractor valuations and costs at later date.

Construction management uses an open book procurement process to appoint trade contract packages. This means that all quotes and estimates are transparent for the client to review. In addition, the appointed construction manager is employed by the client to act on their behalf for a fixed fee. As a result, there is absolutely no financial benefit to the construction manager in driving a ‘harder bargain’ from sub-contractors because, unlike a main contractor, the construction manager has nothing to gain – savings are delivered directly to the client and there is no personal / corporate profit margin to be maintained or maximised.

Interestingly, whilst construction management is widely utilised across Europe, it remains relatively uncommon in the UK where the preferred delivery route tends to be via Traditional contract or via Design & Build. The question is, until this changes and more people opt for the collaborative approach of Construction Management, why would main contractors stop trying to squeeze every drop of profit from their supply chain?

If you would like to understand more about Construction Management and how it could offer a better deal for the delivery of your construction project, get in touch for a free, no obligation consultation.