Apples-to-Apples: Seeking Value in Competing Bids
Brad Gibbs, President of Peak-to-Peak Systems, Inc

Ideally, you’ve formed a rock-solid relationship with the best A/V integration firm in your area.  This firm consistently makes you look great — they’re always on-time and under budget and your clients can’t stop raving about them. If that’s the case, stop reading this article, there’s nothing for you here. 

If not, this article will help you separate the wheat from the chaff and find a firm you can work with on a regular basis. Rest assured, once you’ve found the right firm to partner with, you’ll see A/V as an integral part of the package you offer, rather than a painful-but-necessary process.

Defining the Scope of Work

The process begins with a gleam in the new home owner’s eye. A successful and efficient project requires that your A/V integration firm be involved in the planning and should be allowed input on the following:

• Cabling infrastructure, wall plate locations and jack complements
• Display locations — placement where lighting can be controlled and glare minimized
• Loudspeaker types and placement
• Defining space requirements and locations for equipment and equipment racks
• Custom cabinet design
• Room size, shape and furniture placement for media rooms and theaters
• Sound isolation and sound control, if desired

If the A/V firm is brought in late, certain aspects of the project will need to be re-worked or the client will end up with a mediocre system.

Ideally, your client will agree to take the time to meet with two or three firms. Each of these firms will discuss the services they provide and their ideas for the project. If you’ve introduced the client to good firms, this process will help the client define their requirements, which leads to the scope of work.

Compiling a thorough and detailed scope of work is essential to getting good bids and avoiding change orders.  A well-defined scope addresses not only the desired functionality for the system, but also the desired quality level. A written scope of work reviewed and blessed by the client also ensures that the client knows what to expect and that the bidders know what they’re expected to deliver.

The Least Expensive Isn’t Necessarily the Best Value

Until you find an electronic systems contractor you trust and are comfortable recommending, you’re probably going to be forced to wade through competing proposals in order to help your clients find a service provider. The vast majority of clients are at least somewhat cost-sensitive. So, looking for the least expensive bid that meets the requirements defined in the scope statement you painstakingly put together seems like a good place to start.

Some firms are skilled in finding the least expensive way to satisfy the minimum requirements for the project, while still making a profit. Over the course of the project, they may submit change orders to account for things they failed to plan for (or intentionally omitted in order to submit the lowest bid) and the inexpensive bid that won them the project begins to balloon. 

Worse yet, the client may discover that the inexpensive DVD player selected in order to submit the lowest bid is unreliable, has poor picture quality, or is difficult to control. If the client becomes frustrated enough by this and decides to replace the DVD player, it will require a service call to replace the player and reprogram the remote, as well as the cost of the new player.

What was originally the cheaper solution has just become twice as expensive, and it has left the client frustrated. This leads to dissatisfied clients and a drop in repeat business and referrals, both for the electronic systems contractor and the builder.

Comparing Bids

So, if cost is not the bottom line in comparing bids, what is? 

Well, that depends on the needs of the client and can only be determined on a case-by-case basis. Without becoming an expert yourself, it can be difficult to make this determination. We want our clients to continue referring us to their friends and to give us their repeat business. It is important to try to anticipate the cost of the system over the course of its useful life (both in terms of dollars and in terms of client frustration), rather than just the cost to have it installed.

Listed below are a few places where bids commonly differ and a brief discussion of why the cheaper solution may not offer the best value:

• Cabling Infrastructure
  This is a big one, and it’s usually difficult to see into without extensive knowledge of cable types, quality and requirements.  A well-designed system will have a robust cabling infrastructure to allow for flexibility and change in the future, without having to rip open the walls.  Because it is so much cheaper to wire while the walls are open, we recommend wiring for the future so the home is set up for upgrades to the system anywhere the client may want it.  It leads to a higher initial bid, but not having to run cable through closed walls in the future means a lower cost over the life of the system.
  
  Ideally, the cabling will be Category 6 or fiber optic to account for needs over the next three to five years (primarily, the distribution of high-definition video and the accompanying audio) and conduit will be installed to account for needs beyond the foreseeable future.  Using low-quality Category 5 cable is much less expensive, but will be obsolete for anything but phone or fax lines before you finish reading this sentence.
  
  
• Labor rates
  This is a particularly important consideration for bids given on a time and materials basis.  More experienced electronic systems contractors may demand higher hourly rates, but will likely complete the work in less time and produce a better result.
  
  
• Equipment racks and fans
  Equipment racks make mounting and servicing the equipment easier, faster, and neater.  Paired with the right fans and thoughtful engineering, racks also aid in ventilating the equipment to prolong its useful life.
  
  
• Documentation
  Does the bid include time for creating as-built documentation? The client may eventually decide to sell the house or start using another service provider. The transition will be much smoother if the system is well-documented and cables and ports are all labeled.
  
  
• Lightning and surge protection devices
  A bid that leaves these out will be cheaper, but will leave the client’s investment in their system unprotected.
  
  A client may decide they don’t want to pay for protection devices, in which case, you can ask the submitting firm to remove these from their bid so you can compare apples-to-apples.  However, it should be noted that the National Electric Code requires surge protection devices be placed on all low voltage lines where they enter or leave a dwelling.
  
  
• Static mounts vs. backboxes and mounting arms for displays
  A mounting arm allows the client to pull the display out from the wall and adjust its angle.  The mounting arm folds into the backbox when the display is pushed back, leaving the display flush with the wall for a more aesthetically-appealing look.
  
  The backbox gives the electronic systems contractor a place to mount a surge protection device and any cable conversion devices that may be needed. The combination also makes servicing the display and accessory devices much easier and quicker, reducing the cost of service calls in the future.

Comparing Bidders

In addition to examining the bids, you may also want to spend some time researching the bidders.  A good place to start is with their references.

In addition to speaking with their clients, you might want to ask for referrals among the bidders’ industry partners and subcontractors, who should have a good idea of how the bidders’ perform in relation to other AV consulting firms in the area, their reputation and their relative strengths and weaknesses.

You might also ask to see a bidder’s showroom, demo home or a recently-completed project.  If you do take the time to visit one of these, look to see how they’ve handled the details — are all cables and ports clearly labeled? Have they prepared as-built documentation for the system? Full-blown, multi-page schematics may not be necessary for smaller projects, but they should be able to provide at least a block diagram and a wire list. Have the wallplates been professionally installed? Did they use equipment racks and are the racks neatly-wired and well-ventilated?

Getting an Education

With a slow housing market, now is a great time to educate yourself and your staff in areas that will help you excel and become more profitable when the housing market comes back. Take the time to meet a few electronic systems contractors in your area. Have lunch with them, see their demo set-up or a completed project.

Many NAHB and CEDIA Members are also registered to present continuing education classes to design and build professionals within their respective geographic regions. You can find a CEDIA Member in your area at www.cedia.org. 

To view a list of Registered Outreach Instructors (ROIs), visit www.cedia.org/outreach/registered_instructors.php.

Brad Gibbs is the President of Peak-to-Peak Systems, Inc., a full-service audio, video & control systems integration firm serving the San Francisco Bay Area.

CEDIA is an international trade association of companies that specialize in designing and installing electronic systems for the home. The association was founded in September 1989 and has more than 3,500 member companies worldwide. CEDIA Members are established and insured businesses with bona fide qualifications and experience in this specialized field. For more information on CEDIA, visit the association’s Web site at www.cedia.org.

 

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