Designers anticipate a decline in the industry, fearing further pressure on prices

Prague - Directors of design and engineering companies expect a decline in the industry's performance by about five percent this year due to the collapse of domestic construction. Companies preparing construction projects are often competing for contracts with dumping prices in this situation. This is evident from a study by CEEC Research, presented today at a conference attended by industry leaders.
The director of CEEC Research, Jiří Vacek, expects that the only thing that can help the industry is a new growth in contracts or the exit of some companies from the market. "Unfortunately, the second option is more likely," noted the head of the firm, which has long been engaged in construction research. According to the director of Stopro, Vladimíra Štíchová, further developments will be critical mainly for small and medium-sized project firms. About half of the companies expect a decline in revenues this year in the industry.
The pressure on prices is, according to experts, leading to a deterioration in the quality of work performed. "Price offers for project processing are appearing even as low as ten to 30 percent of the recommended price. For such a low fee, however, it is not realistic to deliver solid work corresponding to the seriousness of the task," said the chairman of the Czech Chamber of Architects (ČKA), Josef Panna.
The Chamber of Architects, therefore, together with the Czech Chamber of Authorized Engineers and Technicians in Construction, demands that the government consider a so-called secure price in tenders instead of the lowest price offer. "A secure price for project documentation means a price that guarantees quality, non-threatening construction or land use plan," added the head of ČKA.
A public procurement expert from the Ministry for Regional Development, Vlastimil Fidler, did not rule out the discussion about the introduction of a secure price institute at today's conference. The question is only whether such a thing should be addressed by a regulation or whether the definition of prices should be included in another norm.
The CEEC Research study is based on interviews with directors of a hundred selected companies conducted in June and July 2012.