Fixed price proposal

Summary

Established in the 1990s, the client is a well-established building services contractor operating UK wide. They have an annual turnover of approx. £40 million and operate with approximately 12-14 live projects at any time. Based in the North, their projects span the whole of the country with locations from Glasgow to Brighton. They utilise temporary labour as part of their installation works and at peak can have up to 250 operatives running at any one time.

We have been servicing the client for several years, initially as part of a structured PSL of four agencies. They operated with multiple agencies, hiring the labour on a standard hourly rate basis working on-site under the Project Manager and Supervision teams.

Challenges

Following various meetings with the client, it became apparent that there was a real desire to reduce the spend on labour.

It was reported that they were spending in the region of £7.5 – £8.5 million per annum on labour alone.

It was also admitted that there was a degree of waste in this spend due to the nature of hiring temp labour at times. Despite the management team working as hard as possible to have the best return on investment for the labour, it is always very difficult to completely eradicate wastage, so the focus was on minimising it as much as possible.

Our Proposal

We offered a proposal to the client which focused on reducing the spend without jeopardising service and quality. We made the proposal of offering the labour on a fixed price basis and therefore guaranteeing the spend and eradicating any nasty labour cost surprises following post project completion reports.

To utilise this, we proposed operating either on a single supply basis nationally or per project to ensure all workers received the same and there was complete transparency on site.

As part of this proposal, we had to restructure the whole reporting method from the traditional timesheet method of reporting hours to weekly work reports. MEP Resourcing produced all the required documentation to do this and offered on-site support to Project Managers. Offering weekly pay on the price work ensured we were able to attract the best candidates as this is unique in the industry.

Results