Large companies learn about construction contracts earlier

Prague - Two-thirds (65 percent) of large construction companies learn about contracts even before their official announcement, on average knowing about them up to eight months before the start of the tender process. This is according to the latest Quarterly Analysis of the Czech Construction Industry for the second quarter of 2013, which the research company CEEC Research will publish in cooperation with the consulting company KPMG Czech Republic on May 30. However, the company released partial results today.
    Medium and small firms, however, are informed about planned contracts much less effectively, with only 24 percent of them learning about contracts before their official announcement. "This is a double-edged sword. On one hand, whether through official or unofficial means, the cooperation between the investor and the construction firm can help prepare the contract better for the tender process; on the other hand, it can also lead to favoring one applicant over others," warned Jiří Vacek, director of the research company CEEC Research.
    From this perspective, personal contacts are the most important source of information about contracts for construction companies, with 97 percent of company directors acknowledging their use. "Personal contacts provide information significantly earlier, thus allowing for the handling of that information much sooner, in some cases they enable the construction company to participate in project preparation and adapt the project to their technologies, or simply have a better overview of individual items, leading to better offers at lower costs," the analysis states. Other sources of contracts, such as public bulletins, are evaluated by construction representatives as ineffective.
    The Czech construction industry is struggling with a long-term recession, which is related to a significant decline in construction contracts. In March alone, construction production decreased year-on-year by 20.6 percent, according to the Czech Statistical Office. Construction output has fallen in recent years from 547.5 billion crowns in 2008 to last year's 424 billion crowns.
    The number of large construction firms employing more than 50 people has also significantly decreased, from 767 four years ago to just 603 last year. Therefore, it is increasingly important for companies to learn about contracts earlier than their competition. "In fact, the lead time and quality information base can be the difference between winning or losing the tender, or between making a profit or a loss on the acquired contract," the analysis concludes.