Telecom Companies, Are You Getting What You Are Paying For?

Recently we have been asked to complete a large amount of re work that was originally completed by some of the local telecom contractors. We were told that our pricing was 10-12% higher than the low bidder on this particular project. The owners of a new facilities contacted us after several months of construction activity, to come and help them get the project back on track and moving forward. The company has been struggling to open new permits with local jurisdictions, keep permits open that were under the threat of cancellation and attempt to get their schedule back on track. All of this is due to the high rate of inspection rejections and deficiencies found with the work performed by the low bid contractor. This of course has led not only to a scheduling challenges but also to large additional back end expenses.

The range of the rework has been wide from soft restoration, concrete work, various hard surface restoration issues and full vault change outs of recently completed new vaults due to poor quality installations as well as structural concerns. I have been amazed at the poor quality of the original work and the clients that have been accepting it based on pricing. Some examples of the rework have been, vault sidewalls removed and replaced with plywood for ease of installation by the contractor, vaults notched to allow sprinkler lines and various other utilities to run through them and finally in simple terms, poor surface restoration. It is no wonder projects such as these are getting off track and in trouble in a big hurry.

In today's age of very competitive rates, higher densities of existing utilities anywhere you want to go and expectations from permitting agencies concerning OSHA compliance, traffic control, SWPP and communication/protection of the general public. Based on the high level of municipal and state involvement, you would assume that most project owners or companies would scrutinize and vet their contractors much better than they do. This certainly has not been the case for most of the recent privately funded projects we have been involved in, in fact the price tag has been the only driver of most project related decisions in the telecom sector.

Recognizing that cost is a big factor for any construction project, I cant help but think about the impacts and costs associated with rework for this owner. In looking at the added expense while building the new facilities, they surely would have been much better off paying higher base rates to complete the work initially, one and done. If the owners would have conducted a more stringent vetting process they would have began the project with a reputable, safe, experienced contractor, rather than paying the difference after the fact, in rework, change orders, delayed schedules, public impact and your reputation with major stakeholders involved with the project.

To better illustrate this point, I have added below the Project Management Triangle:

You are given the options of Fast, Good, and Cheap, and told to pick any two. Here Fast refers to the time required to deliver the product, Good is the quality of the final product, and Cheap refers to the total cost of designing and building the product. This triangle reflects the fact that the three properties of a project are interrelated, and it is not possible to optimize all three – one will always suffer. In other words, you have three options:

• Design and Build something quickly and to a high standard, but then it will not be cheap.
• Design and Build something quickly and cheaply, but it will not be of high quality.
• Design and Build something with high quality and cheaply, but it will take a relatively longer time.

Owners and companies must consider carefully the design and engineering on your project, the majority of recent major project failures we have seen and been involved with, have started with engineering. A good contractor can make up some of the gap of a lacking design however, you must understand that what you put into design is what you can expect to get out of the project. Teamwork during the design phase and construction phase of any project should include all the stakeholders, municipalities and other utility owners. You will find they all can be valuable partners in making your project a success.

I would further encourage any owner or company planning a construction project, of any scale, to invest the necessary time in defining the scope of the project very well, find the right contractors to bid the work, ask for references, ask around to local agencies about contractor inspection deficiency rates for your selected contractors, vet your pool well. In most cases a better choice for your overall project needs can be less than 10% away, rework will always be much more expensive in the end.

Finally, I think you see my point, don't just accept that the low bid will be your best choice for any project, interview and spend the upfront time vetting your resources with your construction project team, or you will be asking "Am I getting what I'm paying for".

Bart Jackson