Bidability

Welcome to Environmental Protection’s Quiet Waters blog. "Only in quiet waters do things mirror themselves undistorted. Only in a quiet mind is adequate perception of the world." – Hans Margolius.

My name is Grant Van Hemert and I think this quotation fits the purpose of this blog – to discuss the field, share perceptions, and view the water field undistorted.

I work in Schneider Electric’s Water Wastewater Competency Center. Before coming to work for Schneider Electric, I worked with Veolia’s Kruger division and also with Parkson Corporation—both of these companies are water and wastewater oriented OEMs. I am also chair of the American Water Works Association Instrumentation and Control committee.

The purpose of this blog is to provide a forum for all water and wastewater issues, not just those related to power and control of water and wastewater facilities. So pipe up, fellow bloggers. Let’s hear about things that are of interest to you and your area of expertise.

Let me start by discussing something I call “bidability.” Bidability is the process of developing a current project to ensure competitive bids on future projects. From my viewpoint, few utilities actually consider how the choices on a current project affect future bidability. Do you believe this is true?

I have seen utilities commit to a control system that has a streamlined sourcing and integration methodology. Often times these suppliers will offer a strong system at a very low installed cost. Then years later, the supplier charges a very high price per input/output to expand the system. Why? Because the supplier knows that the utility is locked to that system and their exclusive source of supply. Thus, a decision made years ago sacrifices the utility's ability to bid future projects. I believe that this runs counter to the legal spirit of competitive bidding. Have you seen this? Please share your stories, but please do not mention the supplier or systems' trade name.

So what should utilities do? From my point of view, they should look at a supplier's support network and pricing policies. For the support network, a utility should look at how many local suppliers can secure parts. Also, how close is technical knowledge with the desired supplier or with authorized third parties? Finally, I think a good understanding of the supplier’s pricing structure can help to ensure bidability. If the sourcing is limited, then the supplier may be able to modify price on a given utility. If the sourcing is broad, then chances are that price agreements exist with contractors and subcontractors that go beyond any single project. These existing pricing agreements can provide stability from a supplier through its sourcing agents. This means that the variability in an agent's cost is more likely to be due to an agent's overhead; not to a supplier’s whim. This viewpoint is from a control geek’s standpoint. Valve guys, instrument guys, and water process OEMs, what are your viewpoints?

I look forward to hearing your opinions, and please, don’t be shy!

Posted by Grant Van Hemert, P.E., Schneider Electric Water Wastewater Competency Center on Jan 07, 2010