Tel: 905–690–4709 dk@tfwm.com - Darryl Kirkland, Publisher

A Bid At A Time

How to read a bid sheet from a contractor

The Bottom Line
If you already have a “favorite”, or intend to award to a specific vendor (and are not specifically concerned about getting the best value), this article is not for you! Not to say there is anything wrong with having a preferred vendor. Such working relationships can be a win-win for both parties. The “owner” gets professional AV systems that meet their needs, and the vendor conducts business with a fair profit. However, sometimes the owner either wants or needs to determine if vendor competition can yield a better value for their organization.

Ok, so you want value, and you’ve got your bids back? Go ahead and do the obvious, compare bottom line cost(s). This should be the total cost to install a “turn key” system, with no additional add/alternates, known as “base bid”. Add/alternates may be either owner or vendor suggested enhancements to the basic performing system. Setting up a tabulation sheet in Excel will help organize all this (see Figure 1). Arrange the bids from lowest to highest. Caution!! Resist temptation to make your decision; you’re only part way there!

At this point you’ll need to review all bid proposals. No need to read every detail, but skim through all pages and get a feel for completeness of solution. For me, this is often a “take home” activity. A relaxed atmosphere (and attitude) compliments the purpose of this exercise. That is, to gain an overall impression of each vendor’s approach to your installation. Making notes in the margins or on a notepad will be helpful later but don’t feel pressure for detail. It is helpful to have one or two others within your organization also do this step.

Red Flags
When doing this first pass review of all bids, there are some red flags you should be aware of. Likely the first red flag is observance of your budget. If even the lowest bids are not within your pre-determined budget (or financial means) then your most immediate concern will be if you can afford what you really want/need.

The second red flag is the number of “no bids”. “No bids”, or vendors that passed on the opportunity to offer a solution for your installation, may just reflect a job scope that doesn’t match that vendor’s desired market. However only one returned bid most likely reflects the requirements you stated were so narrow and specific that only one vendor can do the work. If you’re surprised by this result, you need to closely examine your pre-bid process and question the way you developed your RFP (Request for Proposals).

The third “red flag” is the spread (difference of lowest to highest) of the bottom line costs. If the spread is more than about 10 to 15%, ask yourself why. Did your RFP send mixed signals on what you wanted? Is someone offering a solution that cuts corners? A spread, in itself is not a “non-starter” but should not be dismissed.

Lastly, you should note major oversights or enhancements. Will these justify disqualifying a vendor? Occasionally there is the “exceptional” case. This is a solution that just completely “wow’s” you. If this is the case, and you’re within budget, follow your instincts. If your like me, and are not “wowed” easily, you should not ignore the opportunity to act when it comes your way!

Details, details, details
After taking a break (or sleeping on it) so you’ll have a fresh perspective, its time for a detailed look. If you have more than three bids, set the fourth (and higher) cost bids and/or disqualified bids, aside for a moment. These three will make the “first cut”. Now is when you need to score bids on a technical merit scale. For me, the technical merit categories are as follows:

o Enhancements (improved quality, system design, technical compliance, etc.).
o Vendor Qualifications (years of experience with similar systems, ICIA certifications, recommendations/referrals, etc.)
o Warranty/Service support (response time, extended service plan, etc.)
o Evaluation of proposed project schedule (submitted with bid)Setting up a spreadsheet (Figure 2) for scoring the bids is helpful and you may find it helps in documenting your decision. Vendors should understand, from your RFP, what your technical merit criteria are, and also the weight of this criterion vs. bottom line cost. I also recommend conducting phone interviews with the short list. Let them know up front that they are on the “short list”, and your timeframe for making a final decision. Clarify any questions you have with vendors bid submittal. Ask who, from the company, would work on your project, if they get the job. Lastly don’t under estimate what future service cost(s) will be for the installed system. Ask for compliance with AVolution Standard of Excellence (www.avolution.info).

Do the Right Thing
It’s decision time. Make your decision, and confirm with your internal business office. After internal approval of your decision, make a call to successful vendor to “keep an eye out for PO”. Also, before you forget, call unsuccessful vendors and thank them for responding (be prepared to answer “why didn’t you pick us”).

As you move into procurement/installation be aware that no amount of words in your RFP or contact will ensure you will get a good product, and you can’t just expect a vendor to “do the right thing”. Therefore you’ll want to (and vendor should expect) that all criteria used in awarding the job, will be used as metrics during the delivery of final product. Knowing the date that work will start will undoubtedly be important to both you and the vendor. But you should both be equally concerned with the completion date.

Your monies worth?
Sometimes closing out a large installation project is the hardest part. No doubt you can compare what you got (or are getting) to the original bid document. But you also need to be looking at trade magazines, conferences and peer installations for current benchmarks of quality and performance. If your job is large, and/or you’re uneasy about your ability to define your technical needs in an RFP it is highly advisable to seek out an independent AV consultant to help you through the process.

Oh, and perhaps your wondering who I awarded the job to (for the example provided here). Well, by reviewing (and documenting) the technical detail, Vendor A was disqualified. They specified some equipment that did not meet the basic specifications, did not provide the required project schedule and were late with the bid response. It was evident that Vendor E did not really want the job (inflated costs), but were bidding to reflect a continuing interest in working with me. So, looking at costs and the technical merit results Vendor B was the obvious choice. As it turns out, the project schedule they provided was very conservative and we finished “ahead of schedule”. The installation had some tense moments with “D.O.A.” equipment and a few other minor issues, but in the end the users are very pleased. I like to think the work upfront saved me, and my organization, time and money.