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Importance of Clear T&C RFP’s

Have you ever taken your car in for new tires and in the end you came away with sticker shock at the bill?  You had taken your time and priced the different shops in town and had found what you thought was the best deal and set the money aside to cover the bill.  You ask yourself afterwards where I went wrong.  Many companies are getting that same shock when the bill for testing services come in.  Many of those companies have asked us what they can do differently to cut down on the change orders that seem to keep rolling in.  The first thing I ask to see is the request for proposal, RFP, which was sent out to the different contractors.  Many of the packages I have seen include nothing more than a one-line drawing and some deadlines that need to be met.  The only thing I can respond with is I could submit a few different. It’s that are completely different and in completely different price points.  I then offer the advice that if they want accurate bids and bids that should be comparable to each other they need to add a lot more clarity and direction to the RFP package.

The first thing a clear RFP does is define what equipment is to be tested.  In my former job I put many testing quotes together.  One of the key pieces of equipment, the main power transformer, was always a piece of equipment that I would have to make assumptions about.  What many do not realize is the manufacturer many times makes the agreement to test the transformer once the equipment is delivered and reassembled.  Many testing companies know about this general rule and exclude this equipment from their bid.  The dilemma is that the manufacturer does not always include this service, and many times when this service is not included the testing firms are not told this during the bidding process.  The easiest option for the testing firm is then to continue to exclude  this from their bid, which the also leads to a lower overall cost that looks good on the surface but has now left a gap that will need to be addressed later.

This leads me to the second area that needs to be lead in the RFP, what tests are to be performed on each piece of equipment.  Now that we have made clear what equipment we want to be tested we need to direct our testing firms what we want done.  This is where it pays to have a background in testing or access to someone who does.  Many pieces of equipment have a variety of tests that can be performed and should be performed.  What is not as well-known is depending on the region and clients the testing firms have serviced some tests are considered to be optional and not a standard test.  Let’s go back to that main power transformer.  Back in my former employment, sweep frequency analysis, SFRA, was not a common test to be performed.  It was done by special request only.  When I put my bids together the SFRA test was not included.  Depending on the different companies experiences this will still be the way they operate with their bidding packages too.  By knowing what you want before sending out the RFP and clearly conveying that to the testing firms, you have filled in another gap where you see change orders.

The third are that a clear RFP will change is it will make your bids that come in more comparable.  I recently submitted a testing bid for a project that had a very unclear RFP.  The only information I was given was a one-line and the direction that the client does not like change orders.  I went about my bidding process making the assumption that no agreements were made with anyone else.  I submitted my numbers internally and we found out another firms numbers and they were $80,000 different.  I was asked why my numbers were so high and I explained my reasons.  I then asked what the other company bid on, and I received the response that their quote stated we will test your site for this much with no more detail than that.  This lead to a little side note, you can only expect as much detail in a quote as you provide in the RFP.  I the told our internal people that the quote we saw was open to many change orders or a major loss for that testing firm.  My quote came with a cost and a list of what tests would be performed on each piece of equipment.  There was no guessing on what our bid covered.  If you send out a clear RFP the quotes you see come in should be in the same general cost area because you have not left the areas for the testing contractors to make some costly assumptions.

As you can see, a clearly defined RFP can help reign in the cost of change orders, but it can also cut done on the headaches of missing important tests.  Although some cost overrun might be due to items out of our control, missing definition of what is to be tested does not have to be one of them.  A final thought, when I clearly know what I need to do, it makes it easier to hit my cost and my timeline.  When I am able to do that, I enjoy my job more, my company is able to deliver on their promise, and the end client can be appreciative of my work

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