Pro AV Logo Originally published as a Consultant's Connection
column in Pro AV Magazine
  May 2003

Beyond the Low-Bid Process

Those who control the money and acquisition process need to learn to appreciate the fact that AV integrator selection is not as straightforward as electrical or mechanical contractor selection.

By Tim Cape, CTS-D

As pro AV integration has become part of the building design and construction industry in the past 20 years, integrators have had to learn not only how to be a part of a design and construction team but also how to play the bidding game with the more accustomed electrical, mechanical and plumbing contractors. Though there were many happy endings in the early years, the result of an integrated pro AV project was just as likely to be a poor installation, an unhappy client, some adversarial relationships and perhaps a bankruptcy or two. One major reason for this was the concept of the low bid.

Low bid has been the predominant method of contractor selection in the building industry for decades. This has been slowly changing in recent years, but the mentality is hard to shake. That's because the construction industry as a whole muddles through (and often shines) with a low-bid selection process, primarily because the traditional trades are well known and well staffed. Building owners, designers and contractors generally know the role each one plays, what it takes to do the job, and what qualifications and experience are needed to get the desired result.

The pro AV industry is at a disadvantage because we're relatively new to the process. That's why the combination of AV integration and the low bid is often a volatile one. The learning curve we have all had to overcome in AV’s rise to prominence has taken audio and video system professionals beyond the world of bits and bytes and into the world of light and sound and bricks and mortar. And because we haven't always had the educational opportunities that now exist, a lot of our knowledge was gained by making mistakes on projects rather than mistakes in a classroom. That meant a lot of bad experiences for both integrators and clients.

These days, most of us have a lot more experience and we also employ larger, more qualified pro AV workforces for design and installation. There are also a lot more opportunities now for building and system owners and operators to learn how AV system design and integration impacts their buildings. However, their learning curve is also slow. Like us, most owners have had to learn through experience. And though that experience was at times painful, the ultimate outcome has been positive.

The way it's always been

Ten years ago, the scenario for a large AV integration project—with or without a consultant—involved making the system requirements ·known to a few AV integrators, getting a few bids, and going with the low guy. That's the way it had always been done with other building contractors, so why should things be different for AV contractors? Because we're different.

We're not like the traditional trades because of the relationship of the technology to the building. And as many owners have found, all AV consultants and integrators are not created equal. Furthermore, there aren't as of yet any certifications or performance based licenses that are widely recognized outside (or even inside) our industry. So most building designers and owners don't know how to evaluate AV system integrators except by what they are told. This has led to many epiphanies over the years on the part of architects, engineers, building owners, managers and operators as they have learned what it really takes to create good AV in a building.

At present, the more savvy architects and owners understand that there's more to AV than the low bid. As a result, more appropriate ways are being used to select AV consultants and integrators. These new techniques should make for more happy endings for the building owners and their design and construction teams.

Beyond low bid

Depending on the quality of the documents used for getting bids from integrators and how experienced the integrators are at deciphering the proposal documents, selecting the low bidder based on a bottom line dollar figure can be a really bad idea. It can easily get you the integrator that didn't understand the system requirements or the one that simply made a mistake in the bid calculation. I've seen everything from miscounted or missing equipment on a bid to perfectly good equipment and labor prices listed on a bid summary with the labor expenses absent from the bottom line total. In many low bid environments, these are "too bad, so sad" mistakes—the integrator gets the job at the bottom line price and is expected to meet all of the system requirements.

The opposite of the low bid is the negotiated RFQ (request for qualifications) process. This involves soliciting qualifications, making a selection based on those qualifications (usually in conjunction with interviews), and then negotiating a price for the system after the selection. Depending on how well the request is worded, this can allow for a short list selection to be made before any interviews are conducted.

While the RFQ process may not garner the best price, it should provide a good basis for selection if the bid reviewers have the knowledge and background to make an informed evaluation of the potential integrators. This requires knowledge of how integrators work, who will be on the project, what those individuals have worked on in the past, and the resources the integrator has available for the term of the project

Another method I have used very successfully is the RFQ/RFP interview process. This method involves requesting qualifications with proposals, usually from a pre-qualified list. The qualifications are reviewed and the bids are opened and evaluated, then post bid interviews are conducted and a selection is made based on the breadth of the information gathered. I have used this method on a number of occasions and many times it's the highest bidder, not the lowest, that gets the job.

The pick-and-toss method

There's an interesting variation on the RFQ/RFP process that's also proven successful in my consulting business. This method involves requesting qualifications and proposals in separate envelopes. The qualifications are reviewed first without opening the bids and are ranked in order of preference. Next; the proposal from the bidder with the best qualifications is opened. If it's within budget, that integrator is selected and the other bids are tossed with no further consideration. If the first bid is over budget, it's on to the next until a bid is within budget. The result, of course, is the most qualified bidder within budget, assuming the qualification evaluations are valid.

Another variation that I like philosophically but haven't tried is one that is sometimes used in Europe. It is similar to the pick-and-toss system except that the qualified bids are opened and ranked in order of price. Usually only the top three are considered, but any number of bids can be used. Next, the middle bid is selected, eliminating the higher and lower bids. With an even number of bidders, the one closest to the average of all the bids can be selected. If the bidders know how this selection process will work from the start, theoretically they are more likely to shoot for realistic margins and accurate pricing. This should make for decent margins for the integrator and fair pricing for the owner.

The point of all this is that we have options. Once again it's education that's needed to move the industry along to a higher plane. Those who control the money and acquisition process need to learn to appreciate the fact that AV integrator selection is not as straightforward as electrical or mechanical contractor selection. It takes an open mind, an understanding of the AV industry and the expertise to accurately evaluate a bidder's qualifications. And it's complicated by the fact that we have no externally recognized certifications of any note ... yet. We're working on it, but that's another story.

 

 

 
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