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Sunday, July 05, 2009

Who is responsible?

Recently, Bob Kruhm in North Carolina forwarded me an excellent posting from Don Short II, Economic Survival Lessons From Peter Kiewit at The article is well worth reading, but what I found most interesting is this anonymous comment attached to the story:

I have recently been a victim to the economic crunch, but I realized that my problem started years ago in the boom times, not today. The quote above, "It takes competent estimators..." or the lack of that caused my problem. Years ago an inexperienced estimator for a subcontractor mis-worded a quote that made his bid too broad. A less than ethical GC held him to the extra work implied because of the GC's bad estimate on the entire project forced him to get the work done at the lowest price.

Three subcontractors down the food chain and several projects and years later, this subcontractor can't pay my client who can't pay me because he is still trying to recover from the GC's bad estimate. The GC is not even involved in my situation. His bad bid years ago still ripples thru the local industry in many trades. Are the low bids of today discussed in other ENR articles starting more of these ripples?

I don't want to leave this on a negative note with no solution. Support the American Society of Professional Estimators (ASPE) and your local chapter. If you don't have one in your city, look into starting one. Five of us started one four years ago and now have 50 members. I know it can be done. ASPE is dedicated to education and training and offers training classes all over the country that will teach your estimators how to put together better bids. Don't complain about bad times, support the solution. Go to learn what you can do.
The anonymous writer makes some important points about surviving in the industry. And his thoughts link to three perhaps contradictory observations:
  • Our fates are often determined by events and circumstances far outside our control and power;
  • We are responsible for finding solutions and resolving the challenges we face;
  • No matter how good we are at selling and marketing ourselves, if we screw up the estimate (or the actual job) we are goners!
Hopefully, none of us are responsible for causing the recession, but we all have to live with it.

However, we are responsible for our pricing, overheads, and business management.

If we are not winning any jobs, but keep our overheads and business expenses high, we fail. If we win jobs, but price them incorrectly, or accept work from organizations who won't pay their bills in a timely manner, we lose.

If we learn how to market effectively, seek advice and guidance from knowledgeable and experienced people (but always keep the advice in balance with our own perceptions and understandings) and manage our affairs prudently, we will survive, even thrive.

Linked with these observations:
  • Dumb things can haunt you if you are not careful and don't learn from your lessons;
  • Quick fixes and miracle cures sometimes work, but if you are relying on them for your survival, you may not live in business too long;
  • Don't give up -- but don't throw good money after bad!

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