In the past few months I have bid two projects that each
used a 20-year Present Worth calculation
to evaluate and select the winning
bids. For one of the projects I think it was a reasonable evaluation criterion
where two different technologies were being compared, one with high capital and
low operating costs and other the opposite. In this case it was a fair way to
evaluate the bids.
For the other project however, this evaluation was a farce
where bids were for a pre-designed RO system, including pre-selected membranes.
The equipment manufacturers were also preselected. Assuming the preselection
process for the manufacturers ensured that bidders had the capability and
experience to build the specified equipment to the high quality required, and
they were all bidding to build exactly the same piece of equipment, what was the
point of doing an evaluated bid?
Where membranes have been preselected (and everyone is using
the same projection program) and system arrays, recoveries and pumps are
tightly specified, how could there be any difference in energy consumption,
antiscalant dose and membrane replacement cost, which are the major operating
cost inputs for a present worth calculation? Manufacturers will likely vary in
their estimates in membrane cleaning and replacement frequencies because that
is almost totally dependent on how well the owner operates the system and any
pretreatment – so this is at best an educated guess, assuming optimum operating
conditions and hoping for the best.
When everyone is bidding to build the same piece of
equipment, operating cost comparisons should not be used to compare
bids. If there is concern about the quality of an OEM’s equipment and the
subsequent impact on operating costs, this should be dealt with in the
prequalification phase through checking references, etc., so that the OEMs are
vetted at this point. The reality for this particular project is that the
evaluated bid process was used so that the owner and/or engineer had the
ability to subjectively use the numbers to select their preferred OEM. A
claimed membrane replacement frequency that was 2 years longer than the other
OEMs brought this higher capital cost bidder’s 20-year present worth back to
the other bidders and allowed subsequent selection. Note that OEMs were not
required to back up their nominated replacement frequency with a pro-rated
warranty for this period so other than using this number to decide the winning
bidder, it was worthless to the end user.
I am not saying evaluated bids should not be used for RO/NF
systems. In cases where the system design is not finalized and OEMs are given
latitude to provide a system that will meet a performance specification, that
opens up the potential for innovation and variations in factors that impact
operating costs, system footprint, recovery rates, etc. where a 20-year PW
evaluation is very valid. But when everyone is bidding to build the same piece
of equipment, if the engineer or owner wants a way to award to a certain OEM
they should accomplish this through the pre-qualification phase rather than
waste a lot of OEM’s time through the bidding process.