Why lead into this post with a picture of my local newspaper's report on the firing of a road contractor?
Because it proves a very valid point about every type of service and product purchase you make; more specifically, the purchases of services and goods from builders, remodelers, painters, plumbers, architects, and even interior designers.
I’ve listened to a lot of people rave about the great prices they found for various goods and services related to the business I’m in, design/construction/furnishings. But, truth be told…
Not all of those situations turn out well.
According to this article from The Woodlands' The Villager, in the case of the road contractor, it appears the powers-that-be (TXDot, Texas Department of Transportation) have a policy of always accepting the lowest bid for road construction projects. The construction on this particular road was originally estimated to take around $6.5 million. Guess who received the contract? The contractor who submitted the lowest bid — a bid of $2.86 million.
This particular road is a main artery around here and, when it’s torn up, we all become a bit unhappy. So, after choosing the lowest of six bids for this roadwork project, we're stuck with a road that is nine months past due and still not complete. Now that we don’t have a contractor on board and no one else ready in the wings to finish the job, what are we supposed to do without one of our main thoroughfares finished?
The mistake is obvious, isn’t it?
Don’t always take the lowest bid! Especially when you’ve made it clear to all the bidders that that’s who will receive the project. Obviously, when these are the ground rules that have been laid out for a number of businesses who are vying for one project, their decision makers will, naturally, underestimate how much time and effort it will take to complete the job. They won’t be able to cover incidentals without losing money, and they’ll assume everything will go as planned — which, as we all know, never ends up being the case.
If you’re a service provider who’s losing money on a job, where’s the incentive to complete it with quality? Actually, the more important question is: Will you be able to stay in business, at all?
Do you think it’s the provider’s or vendor’s fault for not living up to their set expectations? I don’t think anyone should expect a lot when only a small investment is being made. It’s impossible to expect someone who has cut their pricing as low as they can go, to meet high expectations. Sure, it’s mostly their fault for failing to understand all the ramifications and details of the job they bid for, so they wouldn’t overextend their capabilities; but it’s also just as much the fault of the buyer for expecting great, perfectly performed work at a low cost. You cannot expect the same quality out of the lowest bidder as you do the highest. Something's got to give when prices are reduced.
I know — As the person who’s on the receiving end of services to be rendered, I can sympathize with how easy it can be to focus only on the price you’re going to pay.
You mull over the bids you receive and make your decision under the assumption that everything will go smoothly and everyone who’s working for you will do everything exactly how you want it to be done, no matter the price you pay them. The rationale is that they want to get the lowest price possible without thought as to how the low bidder might be able to provide that service or what difficulties might be encountered by trying to stay within the cost
➠ Fast-forward on down the road a bit, when that “great deal” you got resulted in a job that looks and functions like it was done on a shoestring budget (which it was)...
You will wish you wouldn’t have focused solely on getting a great price during the bidding process. You will wish you would have provided your service provider with a better income so they could produce a better outcome.
You do get what you pay for.