Bid shopping or scope of work -- two sides of the coin

PCL Constructors' Poole's Rules, developed by founder Ernie Poole, codify simple ethical and business practice principals which have helped the employee-owned business to thrive and grow.

When can right and wrong be two sides of the same coin? When you discuss ethics and effective marketing principals in construction, you sometimes find opposite interpretations.

Yesterday, for example, I had a fascinating conversation with Ron Barrie, a retired senior project manager with PCL Constructors Canada Ltd., who recently received the Integrity and Ethics Award from the General Contractors Association of Ottawa (GCAO).

We discussed one of the major bones of contention between subs and general contractors, and general contractors and owners -- bid shopping, and when what could be perceived as bid shopping is actually the opposite: A genuine discussion about the scope of work.

Barrie said he frequently called subs after closing to confirm they had their scope of work correct. This would apply to subs whose bids seemed too low, and slightly higher bidding subs who he knew could do the job well.

Often, he says, the low bid sub, on realizing they had made a scope of work error, would withdraw from the competition. Sometimes the higher bidder would modify the bid recognizing that had overstated their work scope.

Barrie says most of his work before retirement had been on construction management rather than fixed price projects, allowing him to manage things more effectively and ensure a fair resolution for everyone. In this context, only qualified sub trades could get on the short list in the first place.

He added another point to this story, however. Sometimes, he said, a sub would run into problems on the job, often for reasons outside of the individual project. Technically, the GC and owner could throw the book at the sub, replace the trade and sometimes call on the bond.

But Barrie says the better solution, in consultation with the owner and other trades, often involved biting the bullet and providing extra financial support or resources to the sub to help out. The question, from a practical point, is whether the job would move forward better and at lower cost if a reasonable arrangement is made on site, rather than resorting to litigation, delays, and disputes.

Barrie says in great jobs the teamwork builds naturally and effectively. This leads to much happier working relationships -- and really satisfied clients. With the right team of like-minded sub trades and suppliers, in concert with the general contractor and owner, solutions are uncovered quickly and the project moves forward to a satisfactory conclusion.

Rouge elements still exist in the industry, he acknowledges, and some of them find their way into fixed price government-bid projects where the bidding authority is constrained by rules and therefore cannot easily weed them out. But they are few and far between.

Obviously, Barrie's award is well-earned, and the company he worked for has earned a reputation as one of the most successful general contractors in North America. PCL's Poole's Rules, to me, represent a solid model for business practices and processes for not only the construction industry, but any organization, and I believe the company's employee ownership model is well designed to encourage excellence and business sustainability.

The challenge for everyone in the industry when it comes to marketing is to remember that 80 per cent of your success arises from the work you do and the relationships you build on the job site with your associates and suppliers, and your clients. Nothing is stronger in building referrals and repeat business, and I know of no better source of leads than your network and connections built as you are working on projects.

In this environment, when someone tells you about future work, continuing maintenance opportunities, or other areas you could expand your business, you don't need to strain, struggle, or develop new strategies or systems -- your marketing flows naturally. As well, once your work is completed, your references are strong and your relationships are solid.

(Of course, it is wise -- in fact essential -- to develop methods to keep in touch with your clients and colleagues from earlier projects. Here, resources such as annual parties, seasonal or Christmas greeting cards, monthly newsletters, or friendly calls and emails are always helpful -- and will pay off in valuable leads and future business opportunities.)