Opinion: Rok fallout could stem suicide bids

Grant Prior 14 years ago
Share

It’s difficult to talk about positives following the failure of one of the country’s best-known builders, but the collapse of Rok could help to slow the spread of suicide bidding across the industry.

Ridiculously low tenders from work-starved rivals are one of the biggest complaints today among contractors as companies fight dirty to win projects.

And an accusing finger is pointed at most clients who have abandoned all thoughts of partnering and collaborative working as they race after the cheapest price.

But the fallout from Rok has now seen public sector clients realise that the lowest bid can work out as a more expensive option in the long run if a contractor goes under.

Councils and other public bodies across the country have faced huge bills retendering jobs left half-finished in the wake of Rok and Connaught before them.

Both firms were accused by rivals of suicide bidding to win work while clients fell over themselves to snap-up their bargain basement prices.

Now Highlands and Islands Enterprise is taking an extra four months to take a closer look at the financial health of bidders for its £20m Inverness Campus.

The Scottish authority doesn’t want to get burned again by accepting a low bid only to see its chosen firm go under.

And with good reason too – Highlands and Islands chose Rok for a £32m framework deal just weeks before the firm imploded.

Other public bodies are expected to follow suit fearing a public relations disaster if they hand out contracts to firms who fold before projects are finished.

A more responsible approach to contract awards by councils could also benefit smaller contractors shut-out by the recent trend to bundle-up work in large framework deals.

The bigger packages may have saved cash through economies of scale. But if a firm goes bust the whole region is hit leaving a lot of embarrassed council officials and even more angry voters.

The lemming-like rush by public clients to chase the cheapest bid is understandable in the current climate to save cash at all costs.

But the whole concept is a false economy which harms everyone and causes ruin throughout the construction industry.

Rok was the biggest victim of chasing turnover rather than profit.

But now the aftermath from its demise could provide a rare chance to stem the tide of suicide bidding from swamping the industry.

Latest news

Buyers flag fears over civil engineering slowdown

All sectors in reverse during "challenging" March
8 hours ago

Torsion and Khalbros to build new Leeds £1bn neighbourhood

Eastgate Quarter site acquired from Hammerson
1 day ago

Winners named for £380m Scottish council housing upkeep deal

PfH Scotland names 38 firms for social housing landlord deal
11 hours ago

Kier wins first phase of £700m Warwick Uni campus build

Firm to start work on science and engineering precinct last this year
1 day ago

JCB to double size of US factory in wake of Trump tariffs

$500m Texas factory under construction to expand to 1m sq ft
1 day ago

Green light for £2.4bn Luton Airport expansion

Government go-ahead to transform airport
1 day ago

Mivan looks to boost supply chain network

Subcontractors and suppliers invited to meet the buyer event: Book places now
12 hours ago

Diversification pays off for concrete frame specialist Statom

Strong results as £180m turnover firm expands into infrastructure sector
1 day ago

Cardo in talks to buy Breyer roofing arm

More than 100 jobs could be saved at Breyer Roofing
1 day ago

Quartet win £750m Wales & Western railway deal

Network Rail confirms partners for Reactive and Minor Works framework
1 day ago

Plans in for £350m London Bridge life sciences hub

Snowsfields Quarter will consist of three buildings containing labs
2 days ago

Surging labour costs push tender price forecast up

Pick-up in tender prices despite weak growth
2 days ago

Permasteelisa wins cladding deal on Multiplex city tower

Facade specialist wins work on Fenchurch Street ‘hanging gardens’ tower
1 day ago

Wates wins fit-out for Manchester First Street Hub

Smartspace arm secures another Government hub deal
2 days ago

Peel Ports reveals winners for £750m framework

18 firms win places on deal: Full list
2 days ago

Big trade names dropped in M Group rebrand

Acquisitive group formed from Morrison Utility services in 2016
2 days ago

Breyer Group files administration notice

Staff hope rival firm could buy assets and save jobs
2 days ago

Former Severfield director takes helm at Embrace Steel

New CEO Martin Kelly aims to step up expansion of steelwork contractor
3 days ago

£302m upgrade funding awarded to FE colleges – list

Cash shared out between England’s 179 college groups
2 days ago

FK Facades thrives but construction arm hit by ISG row

Dispute with failed contractor costs specialist £5.5m
3 days ago

Galliford Try gets go-ahead for Milton Keynes PRS tower

33-storey tower needs gateway 2 approval before work can start
3 days ago

Small house builders get £150m funding for green homes

Developers will have to meet-up to ten new criteria to benefit from interest rate discounts
3 days ago

Lendlease Construction renamed Bovis

US private equity firm completes £35m purchase of UK contracting business and rebrands
3 days ago

Breyer Group battles for survival as rivals circle

Housing maintenance firm fights three winding up petitions in a month
4 days ago

Careys facing £2.4m claim by developer over demolition cartel

Giant Hong Kong developer claims it was overcharged on Lots Road Power Station job
3 days ago

Multiplex profit drops a third as revenue rises to £780m

Spate of new orders sets contractor up for three years of work
3 days ago

Galliford Try and Breheny land latest Sizewell C road deals

More infrastructure deals for new nuclear power station
4 days ago

Worker trapped in collapsed septic tank pit

Contractor and director fined after worker suffers multiple fractures
4 days ago

Homes England buys stalled Broad Marsh site

Demolition to finally be completed as developer hunt begins
4 days ago

Vistry go-ahead for 353 homes at Rochester Riverside

Work to start on next phase of Kent town regeneration at end of this year
4 days ago

Contractor services