While the Commercial Team plays an essential role in Sigma’s operations, its work often goes under the radar. Commercial Manager, Adam Beesting, explains how the team plays an integral part in delivering the company’s services.
Sigma’s Commercial Team is made up of estimators and quantity surveyors who tender for jobs and submit quotes. In doing this, the team prices every project that the company works on using a combination of methods, including using electronic take-offs from drawings and examining the scope of works. Additionally, the team breaks down projects into different areas, such as mechanical, electrical, flooring, ceilings, partitions and decoration and sends enquiries to the supply chain to ensure best value.
Much of the company’s work is carrying out repeat business with existing clients who often have multiple frameworks. These frameworks are backed by an overarching form of contract, including JCT and NEC, as well as bespoke contracts. Schemes allocated to a framework are priced by the Commercial Team and these are renewed every two to three years.
Involvement in projects
Sigma believes in maintaining close relationships with its clients and third parties, including professional quantity surveyors (PQSs) who manage the costs and legal side of projects for the clients. As a PQS critiques everything included in a tendered quote, the Commercial Team play a key role in ensuring the PQS understands how and why Sigma has priced something.
When quotes have been finally agreed, the Commercial Team will accept the project and instruct the work. Once order coverage is received, orders are raised to the supply chain. During this stage, the team will attempt to improve margins by raising and managing orders with the hindsight of what has been tendered. This includes the procurement of subcontractors, working with project managers and the operations team to organise the delivery of materials and plant, and also organising labour requirements as agreed in the cost plan.
The Commercial Team is involved in projects from start to finish, longer than any other part of the business. One of the key reasons for this is to manage change. As retail has so many variables, there can be a considerable change in each project and every change must be identified and costed. Moreover, the changes can be fluid, and the costs need to be agreed upon with the client while liaising with supply chain subcontractors to agree costs and give formal instructions to proceed.
Another reason for ongoing involvement is that quantity surveyors must ensure the project life cycle is progressing on schedule, often with timescales agreed with subcontractors upfront. This is important for cash flow, given that projects are typically 2-3 months, and there are agreed payment terms with contractors. For this reason, the Commercial Team must get the client’s PQS to validate progress on-site so that Sigma can pay the subcontractors from interim client payments. To ensure people are paid promptly and that contractual disputes are avoided, the Commercial Team constantly liaises with the client, the M&E team and the finance team in regard to payments.
The team’s work continues even after a project has been completed. It has to agree final accounts with the subcontractors and clients and account for any variations, changes and omissions. This has to be agreed before final accounts are submitted and final inward and outward billing can be completed.
Overall, the Commercial Team plays a vital role for Sigma. It ensures that costings are accurate when tendering for projects; that supply chain requirements are procured; and that there are good relationships with clients and PQSs. Additionally, it enables change to be managed effectively, oversees the smooth progress of projects and ensures that payments and paperwork are finalised promptly.