Communities tear their hair

“If we continue like this, children will soon be deprived of eggs and poultry in the canteen,” warns Jean-Marc Perekal, president of the Association for Purchasing in Public Services (abas), an associate attorney at Peyrical and Sabatier Associates. Indeed, in school canteens, there is a shortage of poultry and eggs, due to an epidemic of bird flu, while in pork, African swine fever affects the market, and for sunflower oil and durum wheat, it is the war in Ukraine that strains supplies.

In other sectors, we are not necessarily talking about shortages, but about sharp price increases, especially associated with the development of energy costs – gas, electricity, oil. The main production capacities are in agriculture (gas-heated tomato greenhouses), industry (PVC produced from petroleum), and the creation or distribution of drinking water. Jerome Gavodio, in Ardeche County’s Building Construction and Maintenance Division, asserts that “all sites are experiencing a shortage and an increase in prices.” Thus, aluminum shavings takes fifteen to twenty weeks of lead time and has taken up to 35% more. »

raw material prices

build price

Companies reduce their margins

With regard to drinking water and wastewater, treatment products whose method of production requires gas are affected. According to Jean-Luc Abélard, general manager of Semerap, a local public company (SP) Responsible for water and sanitation in the Puy-de-Dome, prices for “chlorine, polymer and lime” have risen by 40% to 60%.

But the sector is also concerned about tensions over some electronic products affecting water meters, as well as higher pipe prices due to pressure on cast iron or the oil price of PVC pipes. And that’s not all: “Pumps consume a lot of electricity, explains Jean-Luc Abelard. We signed a new contract with a service provider in 2021, the price increased by 41%, and this represents an additional cost of 400,000 euros per year. He considers himself lucky: “Another SP He fired his consult after a few months, they got a 100% boost! »

Faced with this situation, the National Union of Public Works takes the podium: “We are living in a complex moment, to say the least, to say the least, explains Bruno Cavani, its president. In general, in all businesses, there is a 10% increase in prices and it relates to Contract revisions are 5 to 6%. That’s average! For some companies, we’re talking about a 40% to 60% increase. Companies are having to cut their profit margins while SMEs are already weakening because of the Covid crisis. What I’m telling communities is that we can’t “We are the only ones experiencing this increase. If this continues, we will not respond to bids anymore. Our suppliers are charging prices on us. If our elected local officials want us to keep working, everyone has to come around the table. It’s not a secondary phenomenon.”

A clear government password

The Ardèche division saw a company withdraw from one of its markets rather than incur higher prices. “This has withdrawn, but we also have companies that no longer respond to requests for bid, notes Jerome Gavodio. For example, with regard to steel or stainless steel, they cannot adhere to the rolls. However, they have forgotten that in almost all of our markets, they are subject to Prices to review. »

In this regard, the government’s motto is clear: a circular on the performance of public procurement contracts, drafted at the end of March by the Prime Minister’s Office, requires the inclusion of a price review clause in all future public procurement contracts and mentions the possibility of amending existing contracts “when the [la révision] necessary for their continued execution.” “The message from the state is very encouraging, responds Jean-Marc Perekal, from within Apasp. The problem is that many general buyers don’t hear it that way. We had a video chat with a hundred of them recently and half of them told us: “No, we have a contract that is due to take economic developments into account, and we are implementing it.” »

In fact, many public markets already have a pricing review formula. “We invite companies to refer to the revision clauses of their contracts, as Laurent Le Curie, Director of Administration and Legal at Sembreizh, the property operator in the Brittany region, testifies. The doctrine of the region is to set up repayment facilities of up to 60%, without guarantees. But if the project owners do not go Others to the end of actions they can apply, certain companies should not pressure with those who are benevolent. Everyone should do their part. In particular, companies that hold contracts pass price revisions to their subcontractors, which, according to Sembreizh notes in their markets, do not seem Automatic.

unpredictability theory

Not to mention the potential sudden impact, which all players are talking about without being able to pinpoint it. Bruno Cavani says, “We have strong assumptions. The message from our suppliers is: Either you accept prices or you don’t have any materials. When price doesn’t stop increasing while energies prices fluctuate, we ask ourselves questions. I think Percy is starting to look into certain segments. On the public buyers side, there is therefore no question of writing blank checks. “Indeed, we have to think about replaceable products,” explains Jean-Marc Perekal. Next, accurate accounting documents must be requested to objectively determine the request for price revision. »

Mandatory supporting documents if service provider or supplier invokes implementation of the hardship theory: “Negotiation is always possible on potential compensatory compensation, but this requires product-by-product supporting documents,” analyzes Christoph Hebert, director of the Education, Restaurant and Leisure Center at Harveyor and president of the Association of Directors regional restaurants (Agors). He continues: ‘It’s a gas plant! L’Agors He requests the possibility of bringing the market back into play without competition. With the threshold being lowered to €90,000 over three to six months. This will allow for renegotiation, without the risk of the company losing the contract. »

And if the crisis continues, the question of impact on the user will inevitably arise. “Discussions are underway to discuss a price increase for subscribers or compensation borne by the communities, as Jean-Luc Abelard testifies, at Semerap. We are in the process of calculating the difference with the calculation of the expected operating. In any case, compensation can only be a temporary solution.”

“A new formula for price revision must be developed.”

Christoph Hebert, Director of the Center for “Education, Catering, and Leisure” in Harfleur (8,300 residents, Seine Maritime), president of the Association of Regional Restaurant Managers (Agors)

A photo of School Chef Christophe Hebert, Director of the Catering Center at Harfleur, September 29, 2020“We face many overlapping elements: bird flu, swine fever, feed supply difficulties affecting farms, consumer price inflation, rising energy costs affecting industrial product prices, etc. This is causing a general case of increased costs, But we don’t know to what extent it can be coordinated.
There is a lack of transparency. Suppliers do not specifically explain the reasons to us. Thus, for fish, an increase in the cost of fuel is applied, but we do not know the calculation rule for evaluating the final increase in the product. At this point, the economic impact can be managed by limiting the use of certain products, for example those that require frying, and preferring olive oil. But now we are facing suppliers who are demanding renegotiation of prices. This is a very complex request that must be met in the middle of a budget exercise. Undoubtedly, a new formula for price revision must be drawn up on inflation and wholesale market indicators, while we do not have a long-term view. »

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