The Danger of Price Oriented Decision Making

Contractors need skill and commitment to deliver value and comply with safety standards in construction and maintenance.

The Danger of Price Oriented Decision Making

The Risks of Making Decisions Based Solely on Price

Every sector in the construction and maintenance fields require a high level of skill to execute projects and an unflinching commitment to shouldering specific responsibilities. These requirements have proven to be the driving forces for value-driven services people want from their contractors. It is the best way of maintaining compliance with safety standards.

Unfortunately, there has been a slight shift from value-oriented service delivery as more people focus on prices. This is not a case of ignorance but negligence and has resulted in many avoidable tragedies like the Grenfell disaster. Hence, there is an urgent need to re-emphasis the dangers involved in price-oriented decision-making, however, before that, let us first examine the effect of value management on the tendering process.

The Effect of Value Management on Tendering Processes

There is no denying the fact that cost consideration is a fundamental part of project execution. Even if your intention as an individual or organisation is to conduct maintenance services, you will, at some point, factor in how much it will cost. This is where a tendering process is effective; it opens you to multiple value propositions from different contractors and their cost implications.

While evaluating these solutions, the aim of the tendering process should shine through. The objective is to choose the contractor that offers a proposition with the best value for money. It would be best to preserve value no matter how fundamental cost consideration is to your project. This is the ideal way of leveraging the advantage of the tendering process.

The success of a tendering process lies in your decision to choose value over cost. Unfortunately, this is not the case because many tend to select contractors with the lowest price, and getting the lowest price does not mean getting the best value. Our experience shows that cheap prices often mean contractors with fewer skills and knowledge, low expertise, and doubtful accreditation.

That is not to say you should not be competitive with price considerations when you require specific services. Still, it should not be your primary concern because some unsavory contractors have also made that a strategy to win work. As a result, you are exposed to some dangers, all of which you must consider.

Dangers of Price Oriented Decision Making

Using fire dampers as the object of our evaluation, the following are some of the dangers involved in price-oriented decision-making:

1. Substandard Workmanship

We have often gone for site inspection and discovered arrays of poor and inaccessible installation. The saddest part is that many of these buildings are newer, making you wonder why contractors do this job despite strict compliance protocols. The closest conclusion is in the quality of workmanship involved in the construction and installation of those structures.

An extension of this is that the price people pay to get those services are usually lower, presupposing deliberate neglect of quality. If the price is the motivation for choosing a contractor for installing and testing fire and smoke dampers, you may get the worst service.

2. Inferior Materials

All inferior materials used for certain construction or maintenance projects have one thing in common: they are cheap. When you prioritise price, subcontractors may resort to getting you the cheapest materials with low durability. These materials always lack quality composition that makes them withstand wear and tear for an extended period.

3. Destruction

Prioritising price, over quality, or value leads to many things, but destruction is the ultimate; it is inevitable, except it is discovered early and corrected almost immediately. The Grenfell Tower disaster shows how cheap materials can destroy lives and properties.

Reports from inquiries to investigate the event revealed a deliberate disregard for the quality of materials used and more interest in profit.

How to Find Balance Between Pricing and Value

The truth about pricing is that the fact that paying less does not mean you are getting the best service. Similarly, the fact that you are paying more does not mean you are getting the best value for your money. So, how do you make the best decision that is not influenced by the price but still offers excellent value for a great price?

First, you must base your tendering process primarily on value management. The cost consideration can come later; when it does, it should not be the sole determinant in your decision-making. Secondly, you evaluate the value proposition of each contractor, and lastly, choose the best with proven experience and expertise. This is where System Hygienics comes in. We are a reliable and highly trusted organisation offering proven solutions to all ductworks and ventilation systems.

We provide inspection, construction, maintenance, installation, and cleaning while adhering strictly to compliance protocols. We have a vast network of services covering the UK as we leverage the skills, experience, and expertise. Contact us today and get prompt feedback.

Final Thoughts

As impossible as it is to disregard price consideration for any project, it should not be the significant driver of your decision-making. Prioritise value and quality of service, and you will undoubtedly avoid the dangers of price-oriented decision-making.