Best Pricing

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Author Message Anonymous   Posted on Tuesday, April 08, 2008 - 02:55 pm:    One of the questions we have been asked to respond to in a proposal is "describe the measures you take when specifying materials and systems to assure the client receives the best pricing." Working in the public sector, we don't have much control over pricing, but is there a secret agenda in this question that I am missing? Can you please help with a response? Anne Whitacre, FCSI CCS Senior Member Username: awhitacre Post Number: 750 Registered: 07-2002 Posted on Tuesday, April 08, 2008 - 03:23 pm:    its a dumb client question written by someone who doesn't do construction. the appropriate answer would be something like: I write specifications that allow multiple bidders to bid equivalent systems; I specify products that are typically manufacturered and readily available; I do not specify hard to procure or custom products unless specifically requested by the client. " etc. Ralph Liebing, RA, CSI Senior Member Username: rliebing Post Number: 825 Registered: 02-2003 Posted on Tuesday, April 08, 2008 - 03:56 pm:    Might these be valid additions? [in caps] "....that allow multiple bidders to bid COMPETITIVELY, equivalent systems [NOT EXACTLY THE SAME, BUT VERY SIMILAR];....." Richard Howard, AIA CSI CCS LEED-AP Senior Member Username: rick_howard Post Number: 166 Registered: 07-2003 Posted on Tuesday, April 08, 2008 - 04:18 pm:    Tell them you fire clients who insist on mucking things up. John Bunzick, CCS, CCCA, LEED AP Senior Member Username: bunzick Post Number: 880 Registered: 03-2002 Posted on Tuesday, April 08, 2008 - 04:19 pm:    Also, "the design team" (we shouldn't leave it to the specifier alone) "selects products and systems with a level of durability, function and design appropriate to the client's program, budget and functional requirements for that system." That says, essentially, the we select the most appropriate product which may or may not be the most expensive--it depends on what it needs to do. Quality, in the context of a particular project, does not necessarily mean the absolute longest-lasting, strongest, toughest, thickest, etc. Dave Metzger Senior Member Username: davemetzger Post Number: 265 Registered: 07-2001 Posted on Tuesday, April 08, 2008 - 07:21 pm:    Be careful. "Best" is an absolute; you do not want to put yourself in a position of having the client go back to your proposal after the bids have come in and claiming "you assured me I'd be getting the best pricing." John's answer is a good one. The design team should try to give the client value consistent with the client's requirements. One can always get cheaper pricing, depending on what one is willing to give up--but that may not be in the client's "best" interests. David R. Combs, CSI, CCS, CCCA Senior Member Username: davidcombs Post Number: 271 Registered: 08-2004 Posted on Wednesday, April 09, 2008 - 08:04 am:    While I agree with the posts above, it must also be recognized that the architect's / specifier's role when it comes to favorable pricing is somewhat limited. Indeed, there are many MARKET factors that are beyond the design team's control: Strikes, material shortages, higher demand, unanticipated transportation difficulties, construction boom in other countries (i.e. China), etc. that may have the net result of raising prices. Another factor is bulk purchasing agreements, whereby clients (with ongoing building programs) are assured lower or "most favorable pricing status" by the vendor / supplier as a reward for purchasing in mass quantites, and only from them (sole source). We have clients who have made such arrangements. These agreements are negotiated directly between the owner and supplier, usually on an annual basis, and are completely independent of any particular project, architectural firm, or contractor. The owner provides us with a list of all companies with whom they have made such arrangements, and we ensure only those companies' materials or products are specified (yes, all private work). John Regener, AIA, CCS, CCCA, CSI, SCIP Senior Member Username: john_regener Post Number: 378 Registered: 04-2002 Posted on Wednesday, April 09, 2008 - 08:16 am:    The "by the book" purpose of competitive bidding is not to get the lowest price necessarily. The purpose is to establish what the marketplace says is the value or cost of the proposed work. Regarding "most favorable pricing status" (e.g., national purchasing agreements), these can be illusionary and counter-productive. For example, a national purchasing agreement on one project for acoustical ceiling panels yielded prices that were easily undercut by a regional supplier whose purchasing power was much greater than the owner.