Get What You Want in Low-Bid Projects

Don't Let Low-bid Suppliers Make Decisions They Shouldn't

By Walt Boyes

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Automation Fair 2012

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"In 1972, the Clean Water Act mandated that the bidding process provide maximum free and open competition," said Gerald Robinson, senior project manager from Hatch Mott MacDonald, a large water and wastewater consulting engineering firm, "yet the General Accounting Office and a study by the University of Illinois both clearly show that the 'or equal' clause in bidding documents is the most significant contributor to water and wastewater project failure and designs that don't work."

It really doesn't matter what the wording is, Robinson opined. "It could say Manufacturer A or equal. It could say Manufacturer A, B, C or equal. In each case, the owner and the engineer are allowing the supplier to make the engineering decisions that they should not be making."

Robinson pointed out that the bidding process is hectic, and the contractor fields phone calls and emails with varying scope letters and prices and every one of them says, "as equal to the specified." The contractor doesn't have time to read through every single document the suppliers send him, and he tends to go with the lowest bidder, because if he doesn't, he's likely to lose the job.

Then it becomes a face-off in the approval stage, Robinson pointed out.

Include Controls with Equipment Packages

"There are three ways to make this problem less difficult to deal with," he said. "You can sole source. You can use the 'base bid with deductive alternate' technique, or you can use the evaluated, pre-selection method."

Robinson pointed out that the civil/sanitary and process engineers have figured out how to get the products and services they want by using variants on these approaches. "So why should the electrical and controls part of the project be different?"

"Civil engineers specify packages all the time. It is ridiculous to try to put together a clarifier if all the different subsystems come from different vendors," Robinson said. We could produce potential equipment packages like emergency power systems, with emergency generators, fuel systems, automatic transfer switches and paralleling switchgear. We could add the motor controls package too. That would put MCCs in the package, along with PLC-based control panels, the control system networks and maybe even the field instruments. We could even consider including the integration as part of the package. The advantage of doing these things is that the owner gets to be in charge of selecting the major equipment for the project, and the project's likelihood of successful completion goes up," Robinson said. "And you can sole source, if you are willing to. The Supreme Court has said that if an engineer states that in his opinion there are valid reasons to sole source, you CAN do it."

Justify Sole-Sourcing

In the project Robinson just completed for Emerald Coast Utility Authority, which moved its Hurricane-Ivan-devastated Water Reclamation Plant 15 miles north to a more protected location, Robinson said that he selected Rockwell Automation as the controls supplier and simply told other vendors that they would have to use Allen-Bradley controls regardless of whose control systems they typically use, "or we just wouldn't use them on this project. There were no vendors who did not comply. We justified sole sourcing Allen-Bradley by pointing out the increased safety, lower lifecycle costs and operation and maintenance factors.

"I suggest you look at this as a paradigm shift," Robinson said. "Are you in control? Are you willing to put in the contract wording insisting on what you want?"

Robinson put staffing requirements in the specifications. "We required an on-site electrical superintendent, who was a master electrician, crew leaders who were journeymen electricians and a ratio of journeymen electricians to helpers."

"We insisted that the system integrator be a professional engineering firm. This allowed us to bring the SI into the project as a core team member at the earliest point possible," he said.

We only purchased products with local representation, he pointed out. "We purchased extended support from the manufacturers, extended warranties, and we purchased spare parts. We justified it all on lower total cost of ownership (TCO).

"We did field acceptance tests (FAT) with all the decision-makers, and we went ahead and bought a test system for FAT that we could test all the functions with, and we invited the maintenance staff to sit in and jumper the I/O. After the FAT, we used the demo system as a teaching tool," he said. "Then we did the site acceptance test (SAT). The SAT was used as a teaching tool as well.

"Now that the facility is operational, we do quarterly I&C updates and checkups," Robinson said. "We also wrote liberal allowances into the specifications for changes and minor hiccups. Don't stint on that."

"You can get what you want, at a fair price, in a low-bid environment, as long as you control the process," he closed.

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