Most construction companies violate their regulations to obtain contracts

Prague - Nearly three-fifths of construction companies reported that they violate their internal regulations to obtain public contracts. Of this, 54 percent do so exceptionally, and four percent regularly. This is according to a survey by CEEC Research, which consulted over a hundred directors of construction companies. According to 72 percent of companies, a maximum weight for the price criterion should be set in tender processes, as public investors often evaluate the bids from firms solely based on price.

"Competing only on price is a common problem with public contracts. The investor primarily looks at this criterion without considering others, including the actual quality of the work done or the qualifications and references of the construction contractor,” stated the chairman of the board of Trigema Building, Petr Bělina.

Responses from construction company directors indicated that the ideal weight for the price criterion would be 64 percent. The vast majority of them support giving preference to Czech construction firms in public contracts. This opinion is not shared by 13 percent of the firms.

Prices that companies enter into tenders with have been rising recently. In recent months, they have already surpassed the estimated prices set by designers. According to data from IS, prices in tenders by the end of August reached an average of 103.8 percent of the estimated prices. For civil engineering contracts, they were 3.6 percent higher, and for engineering construction contracts, 3.8 percent higher. Year-on-year, the offering prices from companies were 4.9 percentage points higher than expected.

In the crisis years after 2008, when there was a lack of contracts, it was not uncommon for a company to win a contract with 60 percent of the estimated price. According to most experts, such a contract could not be executed without additional costs or compromising quality.

Construction company directors also point out differences in the quality of tenders issued by private versus public investors. "Private investors think through the entire construction process and the associated costs more thoroughly. Unfortunately, public investors are constrained by many regulations that they must adhere to in tender processes. Often these regulations contradict the selection of truly quality construction firms,” added Tomáš Koranda, director of Hochtief.

As in most technical fields, construction companies also face a shortage of qualified workers. One solution, according to directors, is greater promotion of technical sectors and increasing their attractiveness to students. Two-thirds of them believe that this should start in elementary schools, a quarter supports it for secondary schools. One-tenth of the companies would promote it even in kindergartens.

According to all directors, the most suitable form of promotion would be company tours. Other options include school lessons taught by practitioners, promotions through popular YouTubers, or radio advertising.