Market Price in Construction Business

Uncategorized Aug 01, 2022

Discussions about price must be well prepared beforehand to get a good business deal. Some common situations from the field can be pointed out:

  1.  The subcontractor didn't really understand the price list

When you negotiate with a subcontractor from another country, and he has not yet fully mastered the local operator's price list, the latter will naturally tend to make comparisons with the reference prices he knows on his domestic market. He could make an error of analysis in good faith and refuse your offer, whereas the price would be perfectly acceptable to him.

  1.  The purchase price is too far from the market price

Once you have eliminated any risk related to an error in understanding the price list, it may happen that your purchase price is not attractive enough for the subcontractor. This could be the case, for example, with a fixed-price master agreement that was negotiated over a year ago. Indeed, the price schedule would not integrate the evolutions of raw...

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Planning Management in Construction Business

Uncategorized Jul 01, 2022

Negotiating a subcontract is a project that typically takes 6-8 weeks to secure each step (approach, qualification, preparation, site visit, negotiation, contract signing). It is important to commit to a reliable and realistic schedule and to understand the dynamics of the negotiation time to increase the chances of success.

Here are some problems regularly observed in the field:

  1.  Subcontractor sourcing is managed in a "stop & go" mode

The efforts invested in the search for subcontractors must be maintained over time to deliver all its promises. Indeed, the more subcontractors you have available, the more you will be able to accelerate your delivery schedule, increase your customers' satisfaction and thus increase your market share. Word of mouth works very well, and subcontractors realize that they are not alone in the market: this increases your attractiveness and your bargaining power.

  1.  The subcontractor threatens to leave if the job is delayed

In a tight or...

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Risk Management in Construction Business

Uncategorized Jun 01, 2022

The success of a sourcing project is not just a matter of negotiating a price, respecting specifications and meeting delivery deadlines. When the subcontractor comes from another EU country, the perception of risk is legitimately higher, as both parties need to make an extra effort to adapt and be more vigilant.

Risk management helps to ensure that operations run smoothly in situations often encountered in the field:

  1.  The language barrier is often both overestimated and underestimated.

There's nothing to stop you employing a foreign subcontractor living in another EU country, provided you can trust their skills and that they understand their contractual obligations to you. However, you will need to ensure that the site manager understands the local language, so that he can interact with your project manager or answer questions from local residents. Your compliance tunnel must be adapted to the specificities of the host country and the country of origin, so that you can prove...

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