KPMG survey confirms suicide bidding is rife

Grant Prior 14 years ago
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At least 13% of contractors have admitted to bidding work at break-even prices as a major construction survey confirms the spread of cut-throat tendering across the industry.

Accountant KPMG’s latest global construction survey shows that half of UK contractors have been forced to slash their bids by 10% during the last year as competition for work gets desperate.

And the scale of the suicide bidding problem is thought to be even greater across the industry because KPMG only quiz the major players.

Fiona McDermott, KPMG’s global head of building and construction, said: “Globally, around 5% of people are increasing prices, but in the UK everyone’s reducing.

“The UK is clearly feeling the pain more, and this shows just what a really challenging time it is.

“The expectation is that when the investigation into Connaught’s collapse is complete it will be found they were pricing below break-even levels. I think it is inevitable we will see more similar fall-outs.

“Larger companies can do this for longer as they can spread it among more projects, but smaller firms in particular will suffer. And once you reduce pricing, it’s really hard to go back to original levels without offering something more innovative.”

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