Spec Finish

News www.thefis.org 7 PPE regulations tobe extended toall workers The HSE has confirmed that the Personal Protective Equipment at Work Regulations will be amended this year to ensure that agency and temporary workers are provided with the same PPE protections as employees. Organisations will have to provide all workers with the correct PPE necessary for health and safety free of charge, as well as maintain and replace it as necessary. To prepare for this significant change, organisations should confirm the number of workers they have in this category and that they have sufficient PPE. London’s leading contractors enjoy strong order books, but inflationary caution continues AECOM’s London Main Contractor Survey 2022 found that London’s largest building contractors are turning down one in every two bidding opportunities, becoming more selective about which projects they are prepared to bid for and pursing strategies focused on providing value beyond price. Infrastructure consulting firm AECOM, surveyed Tier 1 and Tier 2 contractors operating in Greater London for its annual survey. Building cost inflation outstripped tender price inflation, representing a challenge for contractors’ margin. The result is a much higher inflation estimate from contractors for 2022, at 4.2% compared to their prediction of 1% at the beginning of 2021. According to the study, this outlook will be reflected in bids going forward, with contractors and their supply chain pricing in the risk of higher costs. Last year the number of tenders invited to versus number of tenders submitted was 49% – rates not seen since 2016. In 2020 Tier 1 contractors were willing to consider Tier 2 projects as they jostled to secure work but as opportunities picked back up in 2021 this trend abated, says AECOM. Contractors won 33% of opportunities in 2021, up from 23% in 2020 as they became more selective. All contractors surveyed expect an increase in predicted revenue in the next two years. According to the study, order books are almost full for the year ahead and Tier 1 contractors are already at 48% capacity for 2023. The most cited strategy to secure work in 2022 is developing and nurturing relationships. Contractors are choosing clients and projects that suit their needs and capabilities, with the goal of creating long-term, repeat business. Respondents identified relationships as key to their success in the year ahead, with effective communication and risk-sharing making the difference between successful projects and projects that fail. Cutting carbon output will be another key focus in 2022, with contractors recognising the need to play their part in decarbonising the sector. With strong order books, contractors can afford to be selective about the clients they work with and will seek out those with values and sustainability targets that align with their own, finds the study. While COVID-19 had a strong impact in 2021, the pandemic is no longer a new problem and the associated risks are priced into jobs. In contrast, Brexit is perceived as a bigger risk factor in 2022. Import and export duty has risen, lead times have jumped due to the delays and paperwork associated with material coming in from Europe, and limited availability of labour is driving up the cost of good labour. 32% of respondents are experiencing significant effects from Brexit, with 58% reporting minor effects. If these labour and material issues continue, a higher proportion of contractors will experience continued effects in the year ahead, says AECOM. To mitigate raw material costs and labour shortages, contractors said they want to get involved on projects as early as possible, either via a two-stage or negotiated procurement route. This approach gives more time to effectively manage resources and secure the right trade contractors for a specific project, but also allows inflation to be managed throughout the contract rather than committing to a fixed price upfront. An uncertain supply chain and trade contractor market means the trend for two-stage and two-stage hybrid procurement models continues to rise, representing 71% of Tier 1 contracts in 2021. Contractors are feeling risk averse, and the result is a move away from single stage fixed price contracts. Brian Smith, Head of Cost Management and Commercial, UK and Ireland, AECOM, said: “Contractors in the capital are leaving the unpredictability of the pandemic behind them and are now focused on building longer-term relationships with trusted clients. We’ll see a move towards more two-stage hybrid and negotiated tenders this year as contractors look to engage with clients as early as possible to ensure that any risks are quickly identified. There is a much more considered approach to pricing, procuring and executing projects and a strive for more collaboration. In 2022, price is no longer the key metric of value.” website to survey https://aecom.com/ london-commercial-market-contractors- survey/