When Refractory Contractors Fail to Bid on Complete Project Requirements
“I love your proposal, but I love the other guy’s price.”
Have you ever heard that before?
For those of us who are providing complex services and products in the business-to-business market, this is frustrating to hear. Especially when you hear it often.
When I expressed my frustration to another CEO colleague over dinner the other night, he asked me if my price was higher than my competition.
“Sometimes it is,” was my response. “But sometimes, it’s the same, but the competing contractor didn’t bid based on the project requirements, and the prospective client didn’t notice.”
Sometimes the prospect gives me the opportunity to guide him through the assumptions so he’s able to see that he’s comparing apples and oranges, and sometime he doesn’t.
There’s More to Price Than Meets the Eye
Plant engineers and maintenance supervisors at industrial manufacturing facilities have a lot on their plate these days. Many are handling more than their traditional responsibilities (with some carrying the responsibilities of two jobs due to company budget cuts). They don’t have time to review the nuances of the refractory contractors’ proposals during a new construction or maintenance project. So they start by looking at the price, and then decide if they need to dig any deeper into the proposal.
Over my career, I can’t count how many times we’ve been called back into a client’s office a year or two after we lost a bid and been asked to bid on repair or corrective work because the “low price” contractor they went with didn’t bid the job to the specifications.
Fortunately, many companies catch this before the job is complete, so they end up with the right refractory work (but at a much higher price than the original bid).
Very few of our competitors knowingly provide lowball bids that leave out some key project requirements, but it angers me when I see it. It’s just unethical in my opinion.
Wouldn’t you rather have a partner that helps in writing a job scope and setting a budget? Avoid the common traps and issues on refractory repairs that might end up costing you on the back-end with the common low bidder. Any contractor worth their merit should always maintain 100% transparency.
What to Look For in Your Refractory Project Bid
If you’re a plant engineer comparing bids with substantial variations in price, take an extra few moments to make sure each contractor’s bid meets all the project requirements.
Here are some things to look for:
- What is the make-up and experience level of the crew working on the job? Ask about the company men, brick-masons and temporary laborers.
- Do the contractor’s employees have a vested interest in the work? Or are they simply travelers? Employees with a vested interest in the success of every project will perform higher quality work.
- How much time does the contractor spend every year to make sure they are up to date on the latest safety protocol? (We spend 1 week per year, which is higher than the typical contractor, but make sure to ask the question.)
- What is the bake-out procedure and who will be performing it?
We don’t expect to win every bid, and we don’t always have the lowest price on the bid, but we have found that over time, spending a bit more upfront to do the job right lowers the overall lifetime cost of the project.
I’ll go into more details on that in a future post.
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