The playing field for international tenders could be more honest

Wouter Remmelts - Managing Director of BAM International BV

Competition is a good thing and as BAM International we are keen to take part in international calls for tenders. However, we notice that a low price is often decisive, while factors such as working conditions, quality, sustainability and anti-corruption policy are not sufficiently taken into account. I am therefore an advocate of internationally enforced award criteria and contract conditions.

BAM International is part of the Koninklijke BAM Groep (Royal BAM Group) and operates outside Europe. We work from offices in Dubai, Tanzania, Panama, Indonesia and Australia. Three-quarters of our work consists of hydrological work, mostly in ports and often for the oil and gas industry. We recently attracted media attention with the renovation of marine research facilities at a British scientific research station in Antarctica. Our people are working there under bleak polar conditions, sometimes amongst the penguins and whales. In addition, in Costa Rica we are working together with Van Oord on a new container terminal for banana exports – our biggest project ever.

Competing on an uneven playing field

As an international builder, we participate in calls for tenders all over the world, either alone or in cooperation with other contractors. In America, the enormous liability for builders often causes us problems and that is not always pleasant for us. In Canada and Australia, the bar is set very high for sustainability. ISO certification and other requirements for bidders often create an even playing field in those countries. Unfortunately, this is much less often the case in developing countries. We have noticed this in Bangladesh and Indonesia, for example, where we were indirectly involved in drawing up plans for coastal protection and port development. The considerable Dutch input into the preparation was striking. Advisers and researchers achieved handsome returns there and that is good for the Netherlands. But when the resulting contracts are awarded, it is difficult for a Dutch builder to compete with contractors from countries such as Japan, China or South Korea. I am convinced that this is not because of the quality of our work. The difference lies in the importance accorded to soft values such as working conditions, quality and sustainability. An additional factor is undoubtedly that many Asian countries bring funding – something that we as companies from Western countries have much less access to.

Within Europe the EIC (European International Contractors), the umbrella organization for national federations of European international builders, is trying through consultation between the members to create an even playing field. Through the Dutch umbrella organization, the Netherlands Association of International Contractors (NABU), I am involved in this as vice-president of EIC. As a friendly reviewer, EIC provides input regarding, for example, new ISO standards and conditions in international Federation of Consulting Engineers (FIDIC) contracts. But we also enter into talks with the European Union and with investment banks to call for honest tendering processes, in which the same award and contract conditions apply to all parties. There is still a huge amount of work to do. We see, for example, that contractors who do not fulfil the conditions of the World Bank still compete for contracts through a subsidiary. That is very frustrating.

Acting together is the key

During EIC meetings I can see that the material is awkward to deal with. It is no simple matter to formulate a common European standpoint. The Netherlands has a tendency to point the finger at other countries. But I must admit that we still have a lot to learn from other countries. Spain, for example, is a real leader with regard to training specialist staff within projects. But there really is a will to achieve something together. Whether it is the Greeks and the Finns or the French and the Danes, everyone sees the importance of acting together. That offers hope for the future. It would be good if, within the foreseeable future, we could achieve results in the form of more standardized tender procedures and equitable contract conditions. In this way, Europe can show the rest of the world that an even playing field for international tenders is a possibility, and ensure that the funders of large construction projects internalize this message. It would be a good step on the way to achieving tendering procedures and requirements that are accepted worldwide.

View here the projects and standardization initiatives related to water.