Common Issues Facing Contractors in the Civil Works Industry
Posted on: 24 February 2017
Without a doubt, civil works are building blocks a country utilizes to establish and improve the various industries that drive its economy. For instance, the transport systems, buildings, utility systems, etc. are all results of civil works.
However, despite the importance of civil works, the various players involved in the industry experience numerous issues that go unnoticed. Hence, below are a few common problems faced by public work contractors and solutions on how to go about them.
Acquiring tenders for civil works
As a government incentive meant on leveling the playing field for all civil works contractors, construction and civil engineering jobs get awarded via tender applications.
However, small public works companies find it difficult to compete with bigger contracting firms that have the necessary funding and resources to meet the criteria for big contracts. As a result, the small company opts not to compete for the big civil gigs.
If such is your case, you have three viable solutions or rather options.
One option is to join forces with a bigger civil works contractor who is willing or needs to sub-contract a large project to other public works companies. Your second option is to only vie for tenders that are in your firm's league. Besides It is pointless to apply for a project you very well know your business can't handle due to limited funds and resources.
The third option is to combine with other small businesses and draw upon each others resources to form a larger better-resourced company. For instance, you can merge a small engineering company with an excavation contractor as well as other civil contractors such as utility plumbing companies.
Fluctuating raw material prices
With the changing economic markets, the supply of raw materials is becoming a major problem due to price fluctuations. In most cases, when contractors bid for projects, the prices of various raw materials required are low and stable. However by the time the tender gets awarded the prices are high and very volatile.
As a result, the high prices end up minimizing the contractor's profits from the fixed priced tender.
The solution here is to utilize information wisely.
We are in the information age, and it is quite easy to acquire information that may affect the markets. Such information includes currency fluctuations resulting from the implications of geopolitics, mining statistics for the various raw materials; be it iron ore, steel, aluminum, etc.
The major civil works companies invest in data analytics so as to well prepare by the time the tender gets issued. Thus they know when the prices are about to rise or fall in advance. With such information, they know how much to bid in the tender to meet their intended profits.
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