Non-Communication of Bid Results...

With a lack of in-person networking events, conferences, etc. I don’t have any breaking industry news to talk about lately. So, I’m going to ramble about a pet peeve of mine – not receiving any response or feedback when you are an unsuccessful bidder…

To submit a bid/proposal for process equipment requires a lot of work for no return unless you win the bid. Just pricing a custom designed piece of equipment can require quotes from dozens of vendors and many hours of work by a number of engineers combing detailed specifications, not to mention preparing the proposal and sometimes even preparing custom drawings and lifecycle cost analyses for the bid. The very least the recipient of the bid can do is inform the unsuccessful bidders who won the bid and the decision-making process uses in selecting the winner. 

Ideally I also like to see the price spread of the bids or an evaluation matrix that was used so I know if we were competitive and may have a chance of winning next time or if we should not waste our efforts. Often that feedback is provided, particularly for government projects where it is a requirement to provide a bid tab, but there are also many cases where no feedback is provided at all. I haven’t heard back on an industrial job bid a few months ago where we were begged to submit a bid and had to drop everything to get this together in less than 2 weeks, it was submitted at 11pm on a Friday night (bids due by 12pm) and since then it has been all crickets… I did find out indirectly after the bid that we were just there to provide another number so I haven’t pursued a response (plus I was a bit bitter about not being seriously considered after the owner pleading for us to bid). You can’t win them all but a response that we were not successful and why would be nice.

Here are my rankings from worst to best on the types of bids that provide feedback and why I think this is the case:

 

1. Industrial Projects

These are the worst for feedback. My theory for this is that to the owner, this is a one-off transaction and they don’t think they will need to bid this out again, so who cares what the losing bidders think… It is these projects, bidding either direct to the owner or via a consulting firm, where more often than not I have not had any feedback after a bid without badgering them. Good luck getting bidders if they need to rebid the project!

 

2. Design-Build and CMAR Bids

These can be confusing where the contractors ask for firm pricing at 30%, 70% and maybe 90% design and you never know if a selection will be made at the earlier stage quotes or the contractor is just checking the budget. That is often not communicated, so you can put in a lot of work on a proposal when a decision will not be made yet. On the other hand, you could throw a swag budget number out there at 30% design and find out a few months later someone else was selected based on a lower price… I think the contractors like to keep their options open and not commit too early unless they really need to pick a vendor early to help with the design.

 

3. Preselection Bids

In this case you are often sending bids to the design engineer or the owner, where the engineer makes the evaluation based on a selection criterion. Typically, you find out formally who won, but often no reason or a very vague reason is provided for the selection. So there is little you can learn about why you were not selected. These bids are the ones that often require specific system drawings and detailed lifecycle analyses. Where very little feedback is provided, I suspect the engineer or owner had a preferred bidder from the start and you were just making up the numbers. If the bids are sent to a municipality, in most cases you will get a detailed bid tab after the evaluation is complete (see Municipal Bids).

 

4. Municipal Bids

Where a bid is made directly to a municipality, it is a requirement that a bid tab be provided showing the ranked prices submitted. Selection criteria is usually very transparent and a manufacturer is left in no doubt where it finished up and why.

 

There are exceptions when there are some qualitative evaluation factors used as well as price with percentages or points applied to each factor to select a winner. This is where the grey kicks in and the owner (or engineer) can massage the numbers to pick who they want. The evaluation matrix will be published but the results can be very subjective. This also applies to direct/pre-selection bids.

 

5. Design-Bid-Build Contractor Bids

These are bids where you are providing your price to contractors on bid day and the contractors are submitting a total project bid to the owner. There are usually no grey areas here – the contactor will go with the lowest price in nearly all cases unless an OEM has a special relationship or the contractor has had a bad experience with an OEM. If the contractor must write in the suppliers on the bid form, you know within 24 hours if you were selected. If not, you rely on the honesty of the winning contractor to go with the low bidder on bid day and hope there is not post bid backroom deals done (if you were low on bid day). It is possible to get an idea of where the competitor pricing was if you know one of the bidding contractors well enough who will give some feedback. It is in a contractor’s best interest to provide some feedback if he thinks you may be working together on a future project. Otherwise, there is no way to find out if you were way low, or way high.

 

With all that said, it is nearly impossible to predict what feedback you will get despite the type of bid unless you have bid to that entity in the past. If you suspect you are just making up the numbers with another bidder preferred, you could very well be wasting your time and don’t expect any useful post bid feedback.

The comments and opinions in this post are my own and not those of my employer.

More Membrane Market Consolidation!

Suez Purchase of Lanxess’s RO Product Line

We may be stuck in our homes or offices in these unusual times but that hasn’t stopped players in the membrane market from making some interesting acquisitions in the past few months. The biggest recent news is Suez’s purchase of the RO membrane portfolio from Lanxess. In 2019 we saw a membrane manufacturer (Dupont) buying an OEM (Memcor), and now we have an OEM getting into the membrane manufacturing business. I am wondering what Suez’s motives are here. 

One of the points in the July 16 press release from Suez says the acquisition will “expand its international RO membrane production capabilities and expertise to help meet growing global demand”. See here for full release. That implies to me that Suez will not only use the membranes for its own RO products, but also plans to sell these to other OEMs and end users – unless it will just be chasing the RO membrane replacement market, which is significant. I doubt other OEMs will be interested in buying membranes from a competitor where there are plenty of alternative RO membrane suppliers available.

Now if Suez is mainly targeting the membrane replacement market, that is a different story. Lanxess has had very competitive pricing and if that pricing is sustainable, and not just an attempt to get reference installations, Suez may be able to pick up a good chunk of business. Not being known as a membrane company and with the RO membrane market pretty much commoditized, I think it was hard for Lanxess to break into the market. Now with the backing and reputation of Suez, that should provide more opportunities to bid projects and then it will just depend on whether the pricing remains competitive. Suez will also provide instant references from the RO systems it sells and from replacements at existing systems.

So now that I have thrown this idea around a bit, I think I have worked it out – Suez plans to use the Lanxess membranes in its own RO systems (which is a no brainer) and will also be chasing the RO membrane replacement market, but will not necessarily be expecting to sell many membranes to other OEMs, which makes sense. This will certainly put a hole in sales for the major RO membrane manufacturer who has been private labelling RO elements for Suez up to now.

Metawater Purchase of Wigen Water Technologies

I also must mention the purchase by Metawater of Wigen Water Technologies in April. See press release. While I am an employee of Wigen, I think all would agree the acquisition will certainly provide Wigen with the resources to pursue larger projects and grow faster than would be possible as a small business. It is also a reasonably seamless purchase where there are no management changes, Wigen retains its name and operates as a subsidiary of Metawater. Aqua Aerobic Systems, which was purchased by Metawater in 2016 has virtually no product overlaps with Wigen. So, I would say this is one of the less controversial acquisitions in the past 12 months.

Who is next?

There are still some smaller membrane OEMs out there ripe for the picking for larger companies wanting to expand in the market and maybe there are some larger OEMs hurting in these tough economic times and looking to exit the market so let’s see what happens in the next 6 months!

The comments and opinions in this post are my own and not those of my employer.

Filling the Conference Gap

In past years at this time I would be writing about technology developments and industry news I had picked up at the AMTA/AWWA Membrane Technology Conference (MTC) and the California WateReuse Conference in March but as we all know, this year these conferences and many more have been cancelled due to the Coronavirus outbreak. These two shows were one week away when most of the country started to go into lockdown, which was a shame for the many who had put so much hard work into planning these events, but obviously the right decisions were made to not cram so many people together in meeting rooms, exhibit halls and social events during these times. Also, as there had been so many attendee and exhibitor withdrawals, it was probably not feasible for the shows to proceed anyway.

Now with AWWA’s ACE20 and many other regional shows being cancelled through July so far, how will this impact the water industry in the short and long term?

In the short term, personally, I am missing out on the networking at these conferences where stronger relationships are developed from direct interactions with engineers, water utilities and manufacturers/service providers. It is through these interactions that you can find out about upcoming projects and industry developments well in advance of public announcements. I know Dupont was really looking forward to being the major sponsor at MTC following the acquisition of several membrane businesses in late 2019 and as I noted in a previous post, I was hoping to spend some time with Dupont at the show to see how these acquisitions would impact the relationship with its existing OEM customers. I am sure many similar meetings would have been planned at MTC. In the everyday hustle and bustle of working on projects and chasing new opportunities when you feel like you are always in firefighting mode, these conferences are important opportunities to break away and spend some quality time to look at new technologies, develop new relationships and strategize with current and future business partners.

The Coronavirus cancellations hit just when the busy spring conference season was starting and now that season is wiped out, we will have a void of at least five months with no shows. For manufacturers and consultants with well-established networks I don’t think there will be long term damage to industry relationships and finding new projects. This pause in shows is actually providing an opportunity to explore and utilize video conferencing and ancient means of communication like talking on the phone. Companies looking to introduce new technologies or enter new markets will be more impacted where the shows are an important avenue to launch these companies or technologies.

So far, I am not seeing a pause in projects bidding, although a few bid dates have been extended, but nothing cancelled yet. If anything, the bidding seems a little busier, maybe because engineers and owners have more time to get these bids on the street and are hoping by the time contractors are awarded the shutdowns will be relaxed and the projects can break ground in late summer. I don’t know if that means some projects are being brought forward so that here will be a lull in bids over summer/fall. I will update on that in a few months.

Long term there could be an impact on the attendance at conferences. Personally, with less travel I have been able to work on a few papers, write a few project case-studies, sort out some projection software issues, and other items I have had on the backburner for years. It has me wondering if it would be more productive for me to possibly cut back on some of the shows. I’m sure others will be thinking the same. There will also be reluctance to travel as much due to the risk of catching a virus, at least for the next year or two if not longer. For exhibitors, this pause in shows is probably also providing time for some reflection on the return they are getting from committing expenditure and resources to these shows and could result in some prioritization on what shows they exhibit at and redirecting these resources into webinars, etc – I am seeing a lot more webinars on new technologies and product information lately, obviously in response to less conferences and sales travel. Normally I wouldn’t have time to watch these, but with no travel I have been happy to sign in.

More Virtual Conferences?

We are seeing some of the cancelled shows now going to be presented virtually and depending on the success of the online versions, there could be more demand for this format. If so, the conference organizers will have to work out how to monetize the virtual offerings to make up for much-needed revenue from the conferences to keep these organizations going. As an industry we need organizations like AWWA and AMTA, plus local AWWA and WEA Sections, to be healthy and active so we have forums for technology exchanges, networking, training, government lobbying, regulation setting and many other services these groups provide. It is in our best interests to keep these organizations strong. I also do work on the industrial water treatment market and you only have to look at how fragmented that market is in terms of conferences and networking opportunities to really appreciate what we have in the municipal market with organizations such at AWWA, WEA, AMTA and WateReuse.

The comments and opinions in this post are my own and not those of my employer.

My Five and a Half Best Membrane Developments of the Decade

In January, Global Water Intelligence published the ten biggest water technology breakthroughs and busts of the past decade and many of those whose companies were mentioned on the listed breakthroughs (including myself) were happy to pass on the list. Just for fun I thought I would list my top five and a half membrane technology breakthroughs of the past decade, a number of which were on GWI’s list, and provide my reasoning. I won’t list my busts so I avoid getting bombarded with complaints, especially with the Membrane Technology Conference in a week, although if you look at my post from last February you will see a few I mentioned that are on GWI’s list.

Part of GWI's List

In no particular order, here is my list:

1/ Universal Rack for Ultrafiltration/Microfiltration Membranes

I might be biased here but this concept has really taken off in the last 6 years, where the availability of a number of similar UF/MF modules from different suppliers has allowed some OEMs to develop racks that can accommodate these modules and for the first time allow competitive bidding for the replacement modules. See a number of my pervious posts describing this concept in more detail. What makes this development sustainable is that it is not proprietary as a number of OEMs have developed these racks, which allows competitive bidding to supply these systems, which is very attractive to municipalities. As noted by GWI, H2O Innovation and Wigen along with Suez were the pioneers of this concept. While Suez was probably the first to market their rack, they are a minor player in this market in North America. GWI listed this development as #5.

2/ Retrofit UF/MF Modules

Hot on the heels of the development of the Universal Rack has been the introduction of retrofit UF/MF modules; exact replicas of existing modules in terms of dimensions, so they can be directly swapped out. Pall’s Microza module has been the main target of these replicas with the first replacement developed by Scinor followed by replacements developed by Dow/Dupont and Toray. Scinor has also developed replacements for Toray, Dow and Memcor (now Dupont) modules. Another target has been GE/Suez’s MBR membranes with several replacement modules on the market. Pall, Evoqua and Suez have been targeted due to their large installed base. With the development of retrofit modules and Universal Racks, the days of making money on replacing UF/MF modules are disappearing.

3/ Multibore UF Membranes

This was listed by GWI at #9. These are inside-out PES membranes which historically have had a bad reputation in the US due to integrity issues, but these multi-bore inside-out membranes manufactured by Inge/BASF (now Dupont) are different and are very tough and rarely break and have very high permeability. Adoption has been much more widespread outside the US, but there have still been a good number of municipal and industrial systems installed here in the past several years. Use on Universal racks is more limited because these racks are usually designed for outside-in PVDF membranes. Inge’s module has also had some success as a replacement option for Norit/Pentair inside-out modules. Dupont’s recent purchase of Inge from BASF could help increase the marketing reach of this product.

4/ Nanostone Ceramic Membranes

Nanostone’s ceramic membrane module is different from other ceramic membranes in a number of ways. The membrane is contained in a PVC housing, just like a polymeric membrane. The cleaning and backwashing regimes are also similar to polymeric membranes which has allowed Nanostone to retrofit these modules at installations using existing Pall, Dupont and probably other modules. As a result, Nanostone likely has quickly accumulated the largest number of ceramic membrane installations in the US. Other players such as Metawater with conventional stainless steel housings still only have a handful of US installations. While everyone likes the durability of ceramic membranes, the high cost has inhibited widespread adoption. Nanostone’s innovative method of module construction has helped reduce costs, but these are still a lot higher than polymeric membranes per square foot of membrane area and Nanostone’s installations are usually where polymeric membrane fluxes are low due to challenging water characteristics that don’t impact the ceramic membranes as much. GWI did not list the Nanostone membrane, possibly because it is still relatively new on the market and not proven as a long-term technology yet.

5/ Closed Circuit Desalination (CCD)

This is my lone high pressure membrane breakthrough where this market has been commoditized for some time. Desalitech (now Dupont also - do you see a trend here?) has certainly had success in rolling out this proprietary high recovery RO process, with a lot of industrial sales and some municipal sales. I don’t think this is a widespread replacement for conventional two and three-stage RO systems but rather a niche application where feed characteristics such as high silica or organic carbon (of wastewater origin) allow the CCD configuration to get higher recoveries. This was #7 on GWI’s list.

5.5/ Non-Exclusive MF/UF Modules

This isn’t really a new product or technology development but the introduction of new MF/UF modules in the past 10 years is worthy of mention as this has helped develop the market for the Universal UF rack, which would not be possible if a number of good quality modules were not available to OEMs. Module suppliers include Toray, Dow/Dupont, Hydranautics, Inge/Dupont, Scinor and Memstar. This has loosened the grip the previous Big Three MF/UF system suppliers had on this market with their proprietary systems.

I know there have also been some great breakthroughs with MBR membranes and systems but that is not my area of expertise.

The comments and opinions in this post are my own and not that of my employer.