Originally published in the April 1997 issue of:
Frustration for Low Voltage Contractors
by Barry McKinnon
Because of the wire connection, there is also a connection to the electrical consulting and contracting industry that is certainly historic, and just maybe is becoming pre-historic
The last scenario is one of the hardest to swallow as a systems contractor. Your competition may be giving away design services in order to get the project tendered around a specific product.
If you were to look for the one common thread that runs through all the modern systems development you might be inclined to say wire. Fibre-optics non-withstanding, almost all current systems contracting hardware is woven together with wire. Because of the wire connection, there is also a connection to the electrical consulting and contracting industry that is certainly historic, and just maybe is becoming pre-historic. The inclusion of low voltage communications, security and alarm systems under division 16 seems to generate more frustration in the systems contracting industry as the technologies become more advanced and specialized, and have less resemblance to their alternating current cousin.
From the point of view of the owner or project manager, this wire connection is the governing element. By keeping all the wire related equipment under one division, all the coordination and contract management should be neatly handled, and of course, should be one less headache to deal with. From the point of view of most of the systems contracting industry, this umbrella approach generates new coordination headaches, and often introduces some unpleasant new business practices to the process of securing contract jobs. From the owner's point of view this elimination of a headache or two is achieved at no cost to themselves, and the fact that it just becomes someone else's headache is not really an important factor.
There are several issues involved here, some are on the design side, some are on the contractor side, and the remainder are on the owner's side. They all carry equal weight, so in no particular order of priority, I'll begin with the design side of the equation.
Of all the scenarios described above, the first one is the least troublesome. In a perfect world, this should result in a good specification, an even playing field to bid on and a well coordinated project. As long as the designer is knowledgable and open minded, alternates should be considered, and they should be appreciative of the effort the systems contractor is showing in the project. Many of the comments that follow would not necessarily apply to this scenario.
As you proceed down the list, new problems arise for the systems contractor. In the second scenario, the systems contractor will often have difficulty in getting alternates approved unless the designer is familiar with a wide range of products, and may end up doing more design and re-design work themselves to fill in some gaps in the system as specified. If the contractor proposes an innovative solution, the designer may not have the experience to recognize the value (or hazards) of the proposed alternate. In the third scenario, the contractor will be working with a specification that (with any luck) will be well designed, but direct access to the sub-consultant during the tender and post tender phases may be limited by the terms that the sub-consultant was hired under. This can result in difficulty getting alternates approved, and getting clarification on portions of the specification. Of course sub-consultants are often hired based on competitive bids to an RFP, so the low bid approach can also mean that the sub-consultant may not be the best for the project, which of course flows down the contract food chain to be eaten by the systems contractor.
The last scenario is one of the hardest to swallow as a systems contractor. Your competition may be giving away design services in order to get the project tendered around a specific product. Often the "no-alternate" status is invoked in exchange for the design being provided, locking out other bidders. The design may not even be suitable for the purpose intended, and the other contractors bidding may not be able to have any discussion about the situation with the electrical engineer because of the lack of direct knowledge about the problems likely to be encountered. Some electrical engineering firms have either been bold enough, or perhaps just unaware of the implications, and have listed the sound contractor who designed the system as the contact in regard to alternates or questions regarding the system design. The obvious conflict of interest that this creates does not seem to be a concern. The largest issue, of course, is professional liability. If the electrical engineer was aware that it is possible design a sound system that does not work, they would be more hesitant to stamp a set of drawings. I have seen at least one example where the electrical engineer ended up on the hook for the replacement cost of a sound system in the 6 figure range because of this very situation.
For the owner or project manager, with no particular knowledge of the technology involved, all of these systems seem like any other. What the owner may not be aware of is the behind-the-scenes activity when all these systems are lumped under division 16. We try to let the owner or project manager know early on in a project that there are cost benefits to breaking out the specialized subsystems into their own division. When the owner is made aware of potential cost savings in the form of eliminating the markup by the prime electrical contractor, which can run from 5-10%, they realize their limited sound system, or A/V system budget can go further by having the systems be a separate division.
Where the specialty sub-systems are a small portion of an overall project, and are included in electrical design, the time will not typically be available to fine tune a design.
By folding the systems contracting into division 16, the designer often loses control over pre-qualification of the bidders, and evaluation of the bids produced by the contractors
The issues the systems contracting industry faces in most projects is a tiny fraction of the problems faced by the owner and project manager on the entire job, even though they can be huge issues for the systems contractors, and sometimes even de-stabilize a contractor's financial situation.
Another owner related issue is value engineering. Many electrical engineering firms do not have a broad enough experience with products to be able to maximize the value delivered to the owner for their available budget. Where the specialty sub-systems are a small portion of an overall project, and are included in electrical design, the time will not typically be available to fine tune a design. While the product selection will often perform the required task, there may be more cost effective methods, or more efficient methods of achieving the same thing. There may also be better performing products available that the designer is unaware of. Like any field of design, someone who specializes in a field will have more time to develop an in-depth knowledge in the products and processes related to the field.
We also try to emphasize that by keeping the systems separated, it is easier to maintain the quality control over the final installation, and to keep the system in conformance to the user's needs through the period from design to installation. With long time-line projects from design to completion, the owner's needs may evolve, the technology may evolve and the facility design may change. There is usually a shorter communication and negotiation path when the speciality sub-systems are kept separate, and the specialty sub-consultants are usually better informed about the true costs of making running changes to the systems.
The issues of warranty, owner's manuals and assistance and training for the owner are almost always handled better when the systems are kept separated. I remember one project that had the A/V system under division 16, and the contractor's final payment was being held up by the delivery of the owner's manuals. After several months of communication between the owner, the general contractor, the electrical contractor and the A/V contractor, in an effort to locate the manuals for review, the A/V contractor finally duplicated the entire set of manuals, only to discover that the original A/V owner's manuals that were produced to specification had been disassembled by the electrical contractor and included in the electrical system manuals sent to facilities maintenance. In this instance the users had no access to those original manuals, buried deep in the bowels of the building maintenance archives.
Because the sound or A/V system training and assistance to the owner often occur long after the other trades have left the site and the job is signed off, there is often a significant problem in holding final payment until these services are completed. The systems contractor is often under great pressure to deliver these services before there are users or owner's representatives available to receive the training.
The owner will seldom be aware of these issues, either because the electrical engineers are not aware of them, or because they have a vested interest in keeping the separate sub systems under their purview. There are few available options for informing the owners of the cost benefits available to them by separating the specialized low voltage systems.
For the systems contractor, having the low voltage systems under division 16 creates many problems. The most disconcerting for both the contractor and the system designer is the practice of having the electrical contractor shop the bid around after the project is awarded. It would seem that many times the electrical contractor may select a number, seemingly at random, to include with their bid package, and then if they win the job they will get serious about getting bids from systems contractors for the sub systems. I have seen some electrical contractors caught on this where they have misjudged the value and complexity of the sound or A/V system by as much as a factor of ten, and really try to grind the systems contractors for a price that will salvage some of their profit margin.
Even in situations where several systems contractors submit bids in good faith to an electrical contractor prior to the close of the tender, the winning electrical contractor will often go back to the bidders to see who is prepared to drop their price the furthest to buy the job. Most systems contractors work on a margin too narrow to give up additional percentage points at this stage of the game, and often the best prepared bids are rejected in favor of low bids provided by contractors able to use information provided by their competitors to slash their own bids to the bone.
By folding the systems contracting into division 16, the designer often loses control over pre-qualification of the bidders, and evaluation of the bids produced by the contractors. This can be frustrating for both the designer and the contractors who have worked to build a good reputation and become pre-approved. Often the lowest bid is not necessarily the best (or correct as it turns out), and the electrical contractor will inevitably take the lowest bid under the assumption that it meets specification. This is the route many trunk-slammer contractors use to get into projects where they would not have been pre-approved. The lack of understanding of the issues involved prevent the electrical contractor from seeing the risk they take in this manoeuvre. The only advantage to this scenario is that the hold back on the entire electrical contract can ride on the successful completion of the specialty subsystems.
The electrical contractor will not necessarily understand the issues related to maintaining an installation schedule. With much of the equipment associated with specialty low voltage systems contracting, the cleanliness of the site is an issue. Often the clean date and the turn-over date will become one and the same, which can be a significant problem for installation of electronic equipment with fans, or optic systems. If the electrical contractor does not understand the issues, they won't be bringing the issues forward to the project manager. This often puts the systems contractor in awkward situations, and at the center of blame when a project is late.
When we are involved as a sub-consultant in the design of systems for inclusion in division 16, we can notify the owner and electrical designer of the potential problems that will result from this scenario, and in some cases this has resulted in the electrical contractor being asked to name their subtrades, and identify as a separate line item the value of the subsystems. This eliminates the possibility of shopping the bid, but still can't prevent the renegotiation of the systems price with the subtrade after the bid.
We try to emphasize to the owner that it is important that the systems contractor have enough profit margin so that they take ownership of the job, and want to cultivate the owner as a long term client. It is in this area that the electrical contractor differs the most from a systems contractor. Once the electrical contractor is done, any electrician can provide ongoing maintenance. If the systems contractor does their job right, then they will have a long term relationship with the owner. The training and assistance process is the opportunity for the systems contractor to cement their relationship with the facility owner and user groups.
The problem is one of education. The owners need to know that it is in their best interest to have a more direct relationship with the specialty systems contractors. They need to know what it costs them to have the low voltage systems incorporated into division 16; in dollars, in performance and in ongoing support. The problem is there is no one place to contact all owners. Owners are a diverse lot, ranging from giant corporations to church building committees and city, state or federal governments. The people you have the opportunity to deal with are often not close enough to the end users, or to the funds paying for the project to be interested in the discussion. For the immediate project management people, the issue is one of dealing with the coordination problems, they are looking for a method of streamlining their workload, and anything that will make things work smoother is worthy of consideration. It is hard to see what role the various systems contracting organizations can play in this problem. To teach people you need to get their attention, and they have to recognize that a problem exists. The issues the systems contracting industry faces in most projects is a tiny fraction of the problems faced by the owner and project manager on the entire job, even though they can be huge issues for the systems contractors, and sometimes even de-stabilize a contractor's financial situation.
The answer to problem certainly isn't clear, but is clear we need to get more people discussing the questions.
United Entertainment Media Inc.