CECA South West Director Paul Santer’s speech, delivered at the South West Highways Alliance Spring Conference on 14 June 2018
“I’ve long held the belief that the physical condition of a nation’s roads is a pretty good indicator of how well (or not well) a country’s economy is doing. Having just returned from Italy and having travelled extensively on the highways of Umbria and Tuscany, I can honestly say that things are looking really bad over there (as the TV news reports are clearly confirming) – and by the same token, we’re not doing too badly at all at home!
“If I may, I’d like to put aside the obvious challenges facing all contractors, for example not being able to recruit enough skilled or qualified workers or trying to maintain a positive cash flow in the business when margins remain at their lowest levels for a decade or more – or even how to embrace new technologies and digital processes available in the marketplace which are transforming how we deliver contracts on the ground. The list is long!
“No, instead I’d rather home in on the fundamental challenge faced by larger contractors in building strong relationships with all of their key customers. How do they ensure that they provide the same high standard of service to say Cornwall Council as they do to Ceredigion County Council or Highways England for that matter? Internal processes and procedures will only take them so far down this path.
“Getting everyone inside the organisation to believe that they are all part of a single team is the real goal. This is what will provide that genuine consistency of service – and it can only be achieved by directors instilling and promoting the right company values and culture. That’s the starting point.
“Of course, there will always be the issue of where your resources are currently deployed and where they need to be deployed in the future to tackle the schemes your company wants to deliver. The problem here is that nowadays, most employees want to go home at the end of the day rather than live like nomads.
“A company who succeeds in today’s market has strong and good governance in place. In developing its future business strategy, a major contractor will assess which projects it wants to pursue and just as importantly, which customers it wants to work for. The three challenges it will apply are:
- Is the scheme fully funded? Local authorities and government agencies have long needed to improve in this area – there’s still too much time and money wasted by all parties in going through a lengthy procurement process for projects that aren’t yet ’real’.
- Can the project be delivered? Does the contractor have the bid resources and delivery capacity and are there opportunities to innovate, value engineer and get involved early on to influence the final scheme and bring about savings or deliver more scheme for the money?
- What is the relationship with the customer? If the contractor doesn’t know the customer, he will almost always not bid the project in question. Why would anyone want to work for an organisation who you meet for the first time in a contractual environment? Oh, and customers would be well advised to not give their procurement teams too much power in the bidding process either! Procurement people certainly have a role to fulfil but are not necessarily best placed to decide upon the best contractor for the job! (I digress)! What I’m saying is that successful relationships are ones where the customer both recognises and therefore appropriately considers the assured “value” that a contractor will bring to the scheme.
“There are lots of good contractors out there and a few less good ones – the same can be said of clients or customers.
“Those clients who are completely risk averse and load their tenders with ‘Z’ clauses and promote an ‘us and them’ ethos should be avoided at all cost. If there are any of you in the audience who think this describes you, have you noticed your list of contractors expressing interest in your schemes getting shorter?
“Contractors are nice people! We want to work with our customers not fight with them!
“Nice customers are people who welcome engagement, believe genuinely in risk management and risk sharing and who trust their contracting partners.
“The main consideration will always be the relationship the contractor has with his customer. Contractors want to get to know their prospective customers – if they’ll let them – before they enter into a contractual relationship. Similarly, good relationships with the regional supply chain, based on the proven value they bring, can greatly enhance the contractors’ offer.
“The truth is, there’s a fair bit of work out there, particularly in the south and south west of the country and contractors can’t bid for it all.
“From the point of view of some of our major companies, I’d say “members of SWHA beware”. You no longer decide which contractor you will award a contract to, oh no. These days, as an essential part of ensuring business sustainability, contractors are selecting their customers of choice.”
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