Cheapest is Best?

There is often more than one solution to a problem, but we generally select the least expensive one to implement.  The cheapest choice isn’t always the best solution to solve a problem.

Over my 29-years in the Facility Management and Maintenance industry I’ve been on both sides of the decision making process to resolve problems.  Now that I’m a contractor, it is interesting how many decision makers elect to solve a facility problem based more on price than any other factor.  Sometimes the chosen solution doesn’t deliver the expected results or resolve the problem.

Price is certainly a very important factor in decision-making, especially these days, but is it really the best determining factor in proceeding with a solution?  Additional factors in the decision making process should include:

  1. Your best understanding of the problem.
  2. The impacts associated with the proposed solution(s).
  3. The cost variance of the proposals, particularly if they vary widely.
  4. Does the solution really meet the need?

Your best understanding of the problem gives you the basis to select and define a solution.  When facing a problem, it’s easy to get frustrated or simply want the problem to go away.  Time is of the essence in some cases and getting the problem fixed quickly is important.  But understanding what is causing the problem will help you evaluate the proposal alternatives.  A detailed understanding of the problem helps you precisely specify the work you want done (I’ll speak further on that in the upcoming paragraphs).  If you understand the problem very clearly you’ll know what areas a proposal should cover, the quality of the product or service being delivered, and the scope of work within which a contractor or vendor will work to resolve the problem.

Once you understand the problem, the next consideration is realizing the associated impacts of the solution.  Knowing how the solution will affect the quality of the equipment or “fix’ you receive is key factor in your decision making process.  Will the solution leave you with an added “goody” you did not have before implementation, such as a warranty, an added interface, a new look, an added usage step, or additional maintenance cost?  For example, new vinyl floor tile laid over an older asbestos tile is an environmentally conscious installation.  But could imperfections in the previous tile visibly transfer through to the new tile?  If the new tile is lighter, not only will imperfections appear more obvious, but also cleaning and waxing requirements increase the maintenance costs.

So you complete your due diligence and provide several capable contractors your requirements.  The return cost estimates that vary widely for the same project.  How can this happen?  Cost variation can occur because each contractor plans to approach the job differently, which you may not have considered as a source of cost variation.  When specifications or a good scope of work statement is absent, contractors will accomplish jobs the way they believe is best.

I once reviewed contractor bids for the painting of a church sanctuary ceiling.  This ceiling was roughly 30 feet high with lower hanging ceiling lights, three rows of pews beneath, and of course the pulpit and choir stand.  Each painting contractor completed a site review as part of the bidding process.  Each contractor saw all of these factors but were told only the to caulk all cracks and crevices, and then paint the ceiling white.  The bids ranged from $3,000 to $17,000, the variance simply the result of each taking a different approach to doing the job.  The least expensive proposal would utilize a wheeled scaffold to move one painter over the space in the span of a week.  The most expensive proposal called for building a platform above the pews with several painters completing the job, a three-week project.  The least expensive proposal was selected in the end, but wouldn’t the church have been better off getting bids with less price variance because of a better scope of work specifications and/or performance limits?  The more precisely you describe the work you desire through specifications, the better contractors can bid the scope of work.

Getting back to the tile job I described earlier, did the new vinyl tile meet the need?  Not entirely. The limited selection of vinyl time colors and patterns caused maintenance costs to increase.  Because the new tile was a lighter color, there were issues with scratches and scuffmarks.  A thorough review by all parties in advance of the project would have revealed more than a need to simply installing better looking tile over the existing flooring.  In this case, there were needs to improve the acoustics, improve the appearance and to lower the maintenance costs, if possible.  Carpet tile would probably have done a better job meeting all these needs.

Consider all the factors in your facility maintenance decision-making process, and then let the price of the solution fall where it may.  If all other factors are equal and you fully understand what you are getting for the price then making a good decision is much easier.  Don’t just rely on the least expensive proposal as your default solution.