Posted by & filed under Business Strategy, Electrical estimating, estimating Tips & Hints.

“As I hurtled through space, one through kept crossing my mind; every part of this rocket was supplied by the lowest bidder.”

Wow, this is a powerful quote and brought to my attention by Ian Graham on LinkedIn recently.

rocketTo me this illustrates the difference between those procuring a service or goods and the user who will come to rely upon it. The user is very often far removed from the decisions taken by others; a descision frequently based on price and not benefits.

We often look for the lowest cost in construction but in other areas of our life this action is alien to us. For example, when we buy a car, the price is a consideration, but we weigh this against benefits, reliability, after sales service and energy usage and if they are of a benefit then this is worth the comparative cost, or “Value”. In short we consider the whole life cost. All too often though the industry treats procuring MEP as a commodity like fuel or electricity with the lowest cost being the overarching consideration.

The problem is that the industry assumes that with all specifications and drawings you are getting like for like. If the tender documents were clear and unambiguous then this is likely but this is rarely the case. So, when you are considering the lowest price ask yourself “Have they quoted the same thing?”

When is comes to buying a service, cost it the least safest indicator to rely upon. Suppose you went to see a consultant about your eye sight for laser eye surgery, would you choose the cheapest or who you think would do the best job and put you least at risk? How would you decide? Experience? Years in business? By speaking to them? or perhaps testimonials?

So as the idiom states, “You pays your money and you takes your chances.” A wrong choice will make you wiser but to what cost?