Are competitive fee tendering and construction professional service quality mutually exclusive?

Abstract

It is a little more than 15 years since the associations representing construction professionals in the UK surrendered to government pressure and abolished mandatory fee scales, predicting as they did so that inevitably abolition would lead to a decline in the standard of service provided to clients. Initially the abolition of fee scales had little impact on fee levels - in the UK economic and property boom of the late 1980s demand from clients in all sectors was high and fee levels remained at, or close to, pre-abolition levels. However, in the recession that followed, fee levels fell to unprecedentedly low levels, causing many commentators to be concerned that the quality of service provided to clients would fall. The main aim of this research is to establish whether clients' perceptions of service quality have declined as a result of lower fee scales. Following a literature search five hypotheses are presented namely, that clients' perceptions of service quality are: lower for fee tendered commissions; lower when the fee bid is particularly competitive; higher when the service is adequately specified by the client; higher when care has been taken with preselection of tenderers; and higher when adequate weighting to ability is given in the final selection process. The hypotheses have been tested by collecting data from 244 clients who anonymously assessed consultants, 60% of whom were chartered surveyors (just over half of these were quantity surveyors). Over half of the consultants were appointed by competitive fee tender, and although the service quality scores were lower for these consultants this result was not statistically significant. Therefore, the main hypothesis is not supported by the data but the fourth and fifth hypotheses are both supported by the study.