Good Projects Spoiled by Bad Contractor Selection

 

Something that really perplexes me is how engineers and owners can put so much effort into the design of a plant, ensuring equipment vendors and components are well qualified and tightly specified, then the project is put out to bid and awarded to the contractor with the lowest price. Then it is a crapshoot if the contractor has the experience or capability to complete the project….

The contractor is the most important part of the project. They are responsible for taking the process equipment specified and all the surrounding infrastructure and turning it into a functioning water treatment plant. So why are there so many instances where unqualified, low-bid contractors win these projects?

When an incompetent contractor runs into trouble with schedule or budget when he/she missed something in the specifications, he is going to do what he can to deflect the blame to try keep the project profitable and avoid LDs. That often ends up in conflict with process equipment vendors to improve schedule to make up for poor project management, and drawn-out payments to vendors because the contractor can’t get approval for achieving project milestones. So many times I have heard the excuse from contractors that they can’t pay for start-up because they haven’t been paid for the practical completion milestone. That is compete BS when the equipment has been delivered and started up months ago and the contractor can’t get his s - it together to finish the landscaping or install the toilets… Just as frustrating is when start-up is delayed for months because the contractor is behind with installation, meanwhile the component vendors for the process equipment must be paid, so we go back to the old story of the process equipment vendor also acting as a bank for the project… (see previous post). All of this leads to conflict between the owner, engineer, contractor and OEMs and nobody feels good about the project.

Don’t get me wrong, I’m not out to bash all contractors. I have worked with a lot of very competent water treatment system contractors. And process equipment vendors are not always without blame for delays and missing items in the specifications. I have also seen specs where it wasn’t clear who was supposed to provide some items, so nobody had them, which is on the engineer who wrote the specs. My gripe is really with the process of not prequalifying contractors and ending up with a rudderless ship of a project. Similarly, process equipment vendors should be pre-qualified and most of the time they are, but when they are not it opens up the possibility of any garage integrator throwing in a price. Which takes me back to my original point – why spend so much time designing and specifying a plant and then leaving the execution in the hands of a random low bidding contractor?

Don't Blame the Pandemic

Admittedly, these days in some cases it has been hard to find contractors to bid projects. So, standards may be lowered to get competitive bids. Before a job goes out to bid, there has to be an awareness of what else is bidding locally that will cause contractors to pick and choose what to bid. I have seen bids delayed so as not to overlap with a larger project bidding in the region, which is smart. I have also seen cases where a bid is due just before a board meeting to approve the winning bidder, so there is no room to delay the bid for scope clarifications or to allow contactors more time to prepare, so bidders drop out. This happens so many times. An engineer spends a year or more pulling the spec together then allows 4-5 weeks for contractors to get a bid together and there is no flex in the bidding schedule to give contractors a few more weeks. Not smart!

 While recent years have made this situation worse with supply chain delays and a shortage of contractors to bid projects, unqualified contractors winning water treatment projects has been going on for years and is not a symptom of the pandemic. Engineers and owners need to put more thought into  the bidding process to ensure they get a competent contractor which will ensure a much more successful and harmonious project for all involved!