Some Economic Operators are continuing to compete aggressively to secure contracts by submitting unsustainably low prices. This presents significant risks to the Economic Operator and the Employer and has the potential to adversely affect the wider industry. For example, sub-economic tendering is likely to result in:
- An industry that does not have the resources to invest in its own long term viability;
- A reduction in interest in tendering for government projects;
- Adversarial working relationships resulting in litigation in some instances
- A degradation in the quality of the work; and
- Cost and time overruns.
CPD has engaged with the Construction Industry Forum to develop and alternative method of assessing price submissions. This method aims to reduce the number of potentially sub-economic tenders submitted and in turn resolve the issues caused by their use.
Details of the Works Price Scoring Mechanism (AvgL3) are available below.