For contractors in the Australian infrastructure and construction sectors, the process to secure project contracts can sometimes throw a few unexpected curveballs their way.
George Strohfeldt, Principal at specialist consulting and training services provider Contract Control international (CCI), however, says there are a number of key elements for contractors to consider in avoiding unexpected twists and turns during the tender process.
“You need to know what’s in your contract – before you sign your contract, read it and understand your risks,” explains Mr. Strohfeldt. “Know what you are signing up for in terms of the time and cost risks for scope changes, delay, disruption and liquidated damages, and other project factors.”
While the expansive Australian infrastructure market can make tendering quite a competitive process, Mr. Strohfeldt says businesses should be asking themselves if they really want the job or not.
“Are the construction, weather and contractual risks worth the potential reward?” he asks, suggesting that contractors should try to be as selective as they can, allowing for the prevailing market conditions.
Similarly, having a comprehensive understanding of the tender process and the risks associated is key to successfully bidding and administrating contracts, he explains.
“Contractors need to understand how the tender process works for both their private and public-sector clients and use this knowledge not to make silly mistakes that prevent them from winning. Companies need to use their knowledge of the process to gain an advantage over their competitors,” Mr. Strohfeldt says. “If a contractor decides to discount their price, they need to understand which risks need to be most closely managed.”
In negotiating the contract terms and prices, Mr. Strohfeldt says contractors need to keep their tender conforming, but also consider a discounted alternative tender to trade off against onerous terms or risky conditions.
Even on the home stretch towards finalising a tender, Mr. Strohfeldt says there are still many pre-identified risks that a contractor should manage on a priority basis.
“New risks will generally come to light as the contract proceeds – know the clauses in the contract that provide entitlement to time and cost relief. Administer your paperwork to avoid otherwise legitimate claims being knocked out,” he says, exemplifying the need to address all necessary preconditions in terms of notices and time bars.
While Mr. Strohfeldt asserts that the above tips can be utilised by contractors operating in Australia’s construction and infrastructure markets, he says further skills need to be learnt to ensure they are actioned successfully.
CCI specialises in a range of training courses, tailored to be a practical and interactive time-effective way to gain or enhance existing skill bases.
“The tender process can be quite tricky, and we want to ensure contractors are up to speed with the knowledge needed to successfully tender for and administer contracts. We invite businesses to bring their queries along and we’ll aim to provide them with practical answers and guidance.”