Environmental Contractors Market Procurement Intelligence Report

The market for Contingent Labour and its sub-segments such as Environmental Contractors are at an interesting intersection. Traditionally, clients were charged on per diem basis for Environmental Contractors. However, rising pressure from clients to decrease pricing has resulted into an alternative pricing model of value-oriented billing where supplier's remuneration is linked to the performance or outcome of the project.

The market is rapidly showing signs of a great divide - at one extreme is a low-cost market with almost commoditized services and at the other end is the market for high cost specialized services. Environmental Contractors vendors are adopting starkly different business models and cost structures in an effort to address both the markets.

There are only a handful of \"Tier 1\" vendors in the Environmental Contractors market and they have traditionally enjoyed a premium in their pricing. However, Tier 2 suppliers are giving them a tough competition now as they can provide similar services at a lower cost. Many tier 2 suppliers achieve this parity by finding right talent at a relatively lower cost and maintaining lean operations without any frills.

Trends like these and many others discussed in this report are necessitating a relook at the way Environmental Contractors is procured and the procurement cost saving opportunities that exist.

Environmental Contractors procurement best practices are moving towards a level of sophistication which is typically seen in traditional procurement categories. Category managers now have an attractive opportunity to adapt the best practices seen within this category as well as those being leveraged in other non-related categories. This report summarizes the best practices picked from across multiple categories that could work well for category managers involved with Environmental Contractors procurement strategy.

For example, Buyers should invite bids from industry competitors to ensure that the offers they receive are competitive. Service providers may be willing to offer a multi-year engagement at a reduced fee, which can be beneficial for category buyers in the long-term.

Buyers should engage with service providers through a performance-based pricing model wherein consultants should be paid based on the quality of services delivered by them.

Investing in benchmarking studies help category managers improve their knowledge on market pricing or billing rates of consultants by job role and function. This also allows them to save costs as well as negotiate better with service providers.

Environmental Contractors procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Environmental Contractors procurement. Some examples include: