Disputes, for whatever reason, are costly and impact badly all round. No one can promise that if a contract is perfectly managed that nothing can go awry. Some things are out of our control. New governments can bring in new legislations such as the pension reforms. This will mean that labour costs may rise to accommodate the pension provision for their employees. Or new minimum wage rates being implemented.
Suppliers may not have incorporated the upscale in labour costs at the time of tendering through a timescale issue or ignorance of the upcoming changes in the law.
Can suppliers still provide the same level of service with these increased costs and will they cut corners to swallow the difference?
Thorough Supplier Evaluation helps to overcome possible discrepancies. The use of Ray Carter’s 10c model is an excellent tool to use. Is a low bid the best bid? Can a supplier actually do what is says on the tin? Use the 10c model to establish for yourself if your supplier is the one right for you.