What you should be aware of when reviewing bid proposals - Part 1
Updated: Mar 7, 2018
Here's a story of a bid review that revealed some amazing gaps in the process despite being reviewed by several disciplines and ended up saving nearly $200,000 CAD.
The Responsible Engineer (RE) of an electrical substation package asked me to evaluate the architectural compliance of a modular substation package. One design repeated on 4 exact modular buildings.
As part of the review each discipline completes their particular aspect of the work, ensures the vendor's bid matches the scope of work, specifications and drawings and makes note of any exceptions.
The RE didn't expect me to find anything, after all there's hardly any architectural requirements in substations and e-houses.
However, what I discovered left the RE a little bemused. It seemed to have escaped every single discipline that the vendor had repeated their full design fees for each copy module.
"A total of 1500 man hours had been duplicated"
Now, whilst it's not an overly excessive amount in terms of oil and gas engineering, it still worked out to be reasonably large sum of $180,000! Once we question the vendor they apologised for the oversight and subsequently reduced the bid price.
There is no need to debate if it was deliberate or not. It could have been a simple error by the vendor. The point is that engineering had horse blinders on. They were only concerned in reviewing their technical section and had completely missed the commercial aspect.
You cannot just review your discipline in isolation else you may be paying out on a few hundred thousand more than you need to.
But what was most interesting about this discovery though, was that I only picked this up because of an accident Procurement had made.
Read Part 2 to discover what this was...