BETTER THAN A BULL’S EYE
Training is a good way to tighten up your bids. The Security Indus- try Associations’ CSPM training program is one available resource. There is a dedi- cated module covering estimat- ing of security projects. Students are taught to fol- low the bottom-up estimating method and to identify all costs involved in designing and installing security projects.
Newman also stresses paying close attention to specifications, as specifications are a frequent accuracy “troublemaker.” “I believe the most important element of a bid is the specifications. Thoroughly reading through and understanding every requirement is critical,” Newman advises. “One digit in a part number or a line stating that you must supply 120V power to each panel could be huge differences in the price. The errors made in this section are what makes or breaks companies. “Typically we see a large spread at the bottom end of the bid and this means people are making errors. I was at a public bid opening a while back and when the bids were read they were all around $2.3 to $2.5 million. Then a large national integra- tor came in at $1.7 million. The integrator’s sales representative said, ‘Oh, $#!&. What did I miss?’ In that case, I knew exactly what he had missed. There was one line in the 300 pages that stated the bidder needed to provide a three-quarter inch RGS pipe for fire alarm disconnect from the FACP in the lobby to each of the panel locations in this very large facility. This was a major part of the project and easily overlooked,” Newman recalls. Simply put, “Often one line in the 300 pages of bid documents can be the difference between making money on a job and losing your shirt,” Newman says. To avoid embarrassing omissions such as the one
above, it is Universal Security Systems’ policy that no proposal can go out without, at minimum, two qualified persons reviewing it.
68 October 2010
“While this does not guarantee that it is perfect, a fresh set of eyes can often see something missing or incorrect that you may miss when you are staring at it for hours,” Newman says. Nadim Sawaya, instructor for Security Industry Association’s (SIA) Certified Security Project Manager course, also sees frequent errors in esti- mations for labor hours. “Most integrators miss the labor hours estimate on projects. They should focus on improving the estimating of installation, engineering and proj- ect management hours. They should follow the bottom-up estimating method as defined by the PMBOK (PMI),” Sawaya recommends. Sawaya also indicates integrators need to capture the project’s indirect costs and focus on the cost of the project, not the sell price and/or margin. Both immediately improve a bid.
Larson tags both parts and labor as two top areas to pay attention to.
“One area that I think is consistently problematic is quoting incorrect parts and quantities of parts and labor. Not ‘engineering’ the job during the sales process can carry an expensive price tag after the bid award,” Larson says.
There are errors that occur from not understand- ing insurance or tax requirements, not being able to be bonded, hiring subcontractors based on numbers only and not understanding the thoroughness of their response to you, not understanding what will be done before you are on site, union labor require- ments, coordination of work with other trades and more. It all hinges on your thorough understanding
Bid versus Negotiated
Projects Respondents to SDM’s 2010 Industry Forecast were asked, “What percentage of your projects completed in 2009 were bid versus negotiated?
45% Bid
55% Negotiated
SOURCE: SDM 2010 INDUSTRY FORECAST
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