Bid Day Can Be Like Christmas Morning
For Christmas this year my wife and I purchased for our kids a brand new game table that had everything.
By Frank. J. Rebori
For Christmas this year my wife and I purchased for our kids a brand new game table that had everything. It was a foosball table that could convert to a miniature pool table as well as a small Ping-Pong table. It also could be a shuffleboard and a beanbag throw as well as six other games. This had to be the perfect gift because the manufacturer showed pictures on the side of the box of kids having an amazing time. Moreover, the price couldn't be beat. This multi-game could do 10 times as much as a single foosball table yet was about one-third the price. Even though I had never heard of the manufacturer, they wouldn't have said it if it weren't true.
We brought it home and I began to assemble it so it could be ready on Christmas morning. The first thing I noticed was that the assembly instructions was a combination of hieroglyphics and broken English. There were also instructions in Spanish, French, German, Chinese, Japanese as well as for some reason Fiji. I am sure you can guess what happened next. The game was not everything that the box said it was. The rods holding the little soccer players did not spin. The tips on the ends of the pool cues broke after a few games. The Ping-Pong paddles were so small it was like playing Ping-Pong with a spoon. The screws that assembled into the particle board legs stripped out rendering it as wobbly as a surfboard. I'm looking for the receipt.
Over the last couple of years, bid day can be like Christmas morning as end users open up bids to find project offerings with quotes that can't be beat. Some of the manufacturers can have claimed performance parameters that exceed industry standards by wide margins as well as extensive installation lists. However, some of these manufacturers may be submitting bids for this type of work for the first time or may be from countries that aren't known as great innovators of water and wastewater technology i.e. Tajikistan? Really?
Municipalities may be tempted to select these seemingly attractive bids based on the bid's performance claims and/or the lowest cost. Before finalizing selection, however, they should institute value-based methodologies for their procurement. More than just meaning "lower" price, value-based purchasing takes into account the total installed cost which includes the initial price, annual operating costs, longevity and performance, and post-sale support.
Base-bidding can be used to help ensure end users receive a value based procurement process. In base bidding, the bid form lists the name of the selected manufacturer and the award of the contract is made on the base bid manufacturer's price. This allows contractors to operate on "an even playing field" and not take excessive or unreasonable risks in order to be the low bidder. Requiring each manufacturer to submit performance data from past installations as well as provide third party contacts can also provide assurances.
If the municipality desires, contractors may still be able to submit alternates with the base bid. In this fashion the low bidding contractor will be evaluated using the base bid equipment and the proposed alternate. This way the end user does not find itself in the position of having to accept the low bidders equipment package which may only contain equipment from a manufacturer whose performance can be questionable. How many successfully operating installations does that manufacturer from Tajikistan really have and how long have they been making this equipment?
Waiting until after the project is completed to verify results is a little like buying the game table and finding out that it is not everything the box said it was going to be. It's also not a good situation if the contractor and manufacturer don't have a very good return policy. Even if you have the receipt, they may be reluctant to give your money back.
About the Author: Frank. J. Rebori is President of Smith & Loveless Inc. (www.smithandloveless.com) and currently serves on WWEMA's Board of Directors.Circle No. 247 on Reader Service Card