March 20, 2018
March 20, 2018 by Super Admin
Contractors An estate needs quite a number of different contractors to service it to keep it in good state of maintenance. Typically the following contractors are engaged to perform services, some on contractual regular basis, contractual ad-hoc and some on purely ad-hoc basis:-
Contactual (regular basis)
Non-contractual (often by 3 quotes)
A contractor on regular contract would normally quote a slightly lower price per month's service or per job than market rate. This is compensate for the certainty of revenue to them. Normally the Council would find that ad-hoc jobs tend to be slightly higher in price and have no certainty when the contractor would allocate his resources (staff and equipment) to do the job. Contractors with a contract would have scheduled their resources and prioritise the estates which signed a contract with them. Between 2 estates having a pump failure, for exampl, the contractor would deploy their technician to the estate with a contract with them first before moving on to the other without a contract.
The challenge most Councils face is the service level of the contractors. Good contractors are responsive, communicate well and have certain quality checks after the job has been done. Often, price is not the only criteria to select a contractor. In many instances, a Council has to make a compromise between price against quality of work. Although the saying that "good stuff don't come cheap" if true, sometimes, the Council can get a good contractor and quality of work at an attractive price. Certain circumstances may result in this, eg, there is a temporary lull in the market and so the contractor's resources (manpower/equipment) are not fully deployed. Although the Managing Agent can try their best to get competitive 3 quotes, sometimes the market forces prevent them from doing so. Understanding the market forces may help match the expectations of the Council vs the Managing Agent's attempt to get competitive quotes.
Another point that Councils have to consider is whether to open the request for quote (RFQ) to as many contractors as possible or restrict to a few contractors. Having RFQ to as many contractors as possible takes a lot of time from the Managing Agent and slows down the maintenance works. With less time, the Managing Agent may not be able to manage more tasks for the estate. Then, there is the risk of poor work quality from the new contractor if the RFQ is opened to too many contractors, even with attempts to objectively qualify the new contractor. On the other hand, requesting from too few and regular contractors may yield uncompetitive quotes. Some Managing Agents try to strike a balance and accredit a selection of contractors. Quotes are then requested from this panel of contractors. There are pros and cons to this method. At the end, the Councils have to exercise balance and judgement calls are always needed.