You Never Get More Than What You Pay For
My friend, Michael, who is a regular reader of our blog, recently asked me if we ever worried about burning bridges or damaging business relationships in any way due to something we write. I told him that as a general rule, we try to have three or four positive blogs for every negative one and that we never name names when we “go negative.” After all, this blog currently goes out to 3,215 customers, vendors, associates, and assorted other construction industry folks and we would be foolish to write some “nuclear” piece that would hurt sales. Sometimes though, we do name names in a subtle fashion and those within the industry can connect the dots for themselves. Today is such a day.
First, allow me some quick background on the project that is the subject of today’s blog and then I will let a few pictures tell their respective 1,000 words. This is a job at a large university in Florida. When the job first bid in 2009, our price was $380,000 and we were apparently low (not by much though…a worthy competitor was at $381,000). The job eventually re-bid off of revised drawings and since the metal panel scope was unchanged, our price remained $380,000. Out of the blue though, a part-time panel installer in Tampa, buying panels from a fabricator 3,164 miles from the jobsite, was at $340,000 and was consequently awarded the project. It is worth noting that this competitor’s price was $420,000 on the first round of bidding and that the architect wielded great power in the award of the panel scope to their favored fabricator/installer. It was a bitter pill to swallow, but you win some, you lose some. We had (and have) other projects going on at the university though and I would occasionally ask our project managers who had been to the town how this job turned out. I was always pleased to hear that panels appeared to be late and that at one point, most of the landscaping was in and the walls were still bare sheathing. Well, it turns out that it wasn’t worth the wait for the GC or the university. Take a look….
(click an image for fullsize and caption)
Obviously this is some of worst craftsmanship you will ever see, but it is important to note that much of the problems come from poor field measurement and installation, not fabrication. The lesson for architects is that it does little good to specify a fabricator and not put restrictions on who can perform installation.
If you’re wondering what became of this, the GC approached us last year about re-making all of the problem panels, but at present, they and the university are wrapped up in a legal battle with the subcontractor who performed so poorly and the building remains as unsightly as it does in these 2010 pictures.
Thanks for reading.
Scott Stafford
Tool of the Week, Day, etc. – “It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay
too little, you sometimes lose everything, because the thing you
bought was incapable of doing the thing it was bought to do. The
common law of business balance prohibits paying a little and getting a
lot – it can’t be done. If you deal with the lowest bidder, it is well
to add something for the risk you run, and if you do that you will
have enough to pay for something better.”
― John Ruskin
Are You Kidding Me?
When we questioned this great service to the sales manager, he offered this equally great response, “Yeah, I can see where that might be frustrating to you, but the salesman is also frustrated because you only buy based upon price.”
Are you kidding me?
Talk about a company with their head in the sand. The market is tough right now. Those of us that compete in the subcontracting business are almost always required to be low, plus provide payment and performance bonds, plus have the best schedule, plus agree to onerous subcontract provisions, plus be able to finance the material purchases and labor until the material is on the wall.
That adds up to a lot of pluses on top of having a low price.
My suggestion to the valued supplier is to give us a reason to buy from you on something other than price.
Is your product better in a meaningful way?
Is your service better?
How long has it been since you visited and brought to us a lead on a project?
Has your tech service developed any new fabrication techniques for your product that would make our work more efficient?
And finally, how long since you offered a thank you for the business we have given you in the past?
I know the challenges of the current market conditions are making all of us a bit testy, but if price is the only differentiator in your offering, then you have got to be low. Let me assure you that your customers (subcontractors and fabricators) have to be low and offer all of the pluses outlined above.
Tool of the Week, Day, etc. – For those of you who participate in the construction industry and have a focus in metal, you may want to attend the Metal Construction Association 2012 Annual Meeting in Clearwater Beach, Florida later this month. You can learn all about the meeting at: http://www.metalconstruction.org/meet/index.cfm?pg=meet_annual.htm.
15 Things I’ve learn in 15 Years
- If you’re reading this blog, you likely spend most of your days in a heated/air-conditioned office and are pretty comfortable. I only have extensive field experience in my time here on one project, but it was a big one, and I have a pretty good idea of what our field crews go through on a daily basis. These panels are heavy, they are sharp, and they want to take off like a Frisbee in the wind. It is either hot or cold and it is hard, dirty work. It is also pretty spooky being high up on scaffolding and lifts and roofs. I am lucky to work indoors, out of the elements, and I sure appreciate the hard work our field crews do.
- Ted Miller has a saying that goes, “You’ll never work in this town again….until you’re low.” This is so true. Everyone in our industry seems to come back around at some point. The company or vendor that you used to partner with all the time will fall out of favor with you, or you’ll fall out of favor with them, but at some point, everyone lets bygones be bygones and is willing to team up again on the right project.
- One of the most dynamic changes in construction has been the way that documents are shared. I vividly recall spending most of my early days here in the dark, huddled over a scan machine, looking at drawings on microfilm that would arrive daily in the mail. When we wanted hard copies, we drove to a printer and paid a lot of money for them. I still remember how actual blueprints would irritate my contact lenses and make me sneeze occasionally. Sometimes, to save money, we would take our scales and calculators to plan rooms and do takeoffs there. Now, with various online plan rooms, FTP sites, and a plotter/scanner just down the hall from me, it is practically instantaneous to share and view drawings with customers and vendors and it is much less expensive to do so.
- One of the best things about construction is getting to see a project in person after initially seeing it on your desk years before. This is especially true when I’m on vacation somewhere and my tolerant wife puts up with me driving out of our way to see a building for the first time.
- One of my favorite Jimmy Buffett songs has a line that goes, “If we couldn’t laugh, we would all go insane.” Humor is invaluable. I cannot count how many times we have been here working late on a bid deadline and took a five minute break to watch a funny YouTube video and successfully broke the tension.
- This is not unique to me and would apply to any industry and anyone with children, but nothing clarifies purpose like having children. If I feel distracted or unmotivated, I need look no further than the pictures on my bulletin board of my sweet little boys to snap me back to reality.
- The disappointment of a project lost far outweighs the elation of a project won. It often feels like a relief to close a job, instead of feeling like the celebration that it should be.
- As a follow up to #7 above, dwelling for more than about 24 hours on a project lost is counter-productive. There is ALWAYS another project to bid. Even in this down economy, we can barely keep up with the bidding.
- There are crooks in the industry and there’s nothing you can do about them. For example, I have seen companies use “smoke and mirrors” to mask true ownership of the company in order to help obtain contracts set aside for women and minority owned companies. I also know that there are General Contractors who present falsehoods about true costs to building owners. And, I don’t know how many times I have walked a jobsite of a competitor and seen firsthand the shortcuts that were taken. However, just like dwelling on lost projects, it is counter-productive to waste energy complaining about these practices. Just move on.
- Most drawings these days are weak. That’s all there is to it and that’s putting it nicely. But, on occasion, you get hold of a really good set of plans and it is a joy to work with them. There are column lines and sections provided on the elevations, skewed elevations get their own “straight ahead” look, dimensions are clear and match from sheet to sheet, and there is just an overall orderly flow to their layout. Some of the best firms at this are Perkins & Will, Cooper Carry, TVS, and Hawkins & Hall.
- Techies run the world. Our company would be lost without our in-house IT person, Jonathan Ethridge. From maintaining iPads that our field crews use to input field dimensions, to overseeing our enormous server, to ensuring that we have a functioning website, he truly is indispensable.
- The older I get, the more I realize what I don’t know. I know nothing about HVAC, plumbing, or electrical construction. I have only limited knowledge of the structural components that go into a building. I don’t even know AutoCAD. When I want to gripe about bad architectural drawings or a GC who doesn’t fully grasp our scope of work, I need to remember that they have to have a working knowledge of multiple scopes of work and that I’m just one small cog in the machine.
- Construction is cool. When I was a kid, I liked Lincoln Logs and Tinker Toys and now I get to participate in a grown-up version of that. When people ask what I do, I invariably ask them, “Well, have you ever seen the _____ building? That was ours. Everything on the outside skin of it and all of the associated framing was by us.” We have done so many projects in so many cities now that I can usually even cite a building to an out of towner that gives them a frame of reference. It’s not much, but I like to think that a little bit of my legacy from my time on earth will be that I worked on some office buildings and airports and stadiums and museums and hospitals that will be around long after I’m gone.
- This isn’t construction specific, but you spend more time with your co-workers than your family, so you ought to get to know them and care for them. Last week, several of us attended a memorial for the mother of one of our engineers, Paul Roberts, and I feel closer to him now having learned about his mom and shared a small bit of his pain. When my own mother passed in 2007, I can still recall the hugs from my co-workers at her funeral and how it drew me closer to them. It’s about bids and sales and dollars and cents, but it’s really about people and connections.
- I am lucky. I like to think that I work hard, but I am also extremely lucky and I realize that. Before I came to Miller-Clapperton, I was doing unfulfilling work in a warehouse for a fraction of what I earn now. Ted and Zeke Miller reached out to me for an interview and that changed the course of my life. I guess I showed a good head for numbers and displayed effective written skills in their evaluation, so they took a chance on me, and for that, I am thankful. Later, they encouraged me to complete my degree and for 15 years have been nothing but good to me. I have had the opportunity to see and do things that my parents could never have dreamed of and I owe it all to this company.
