Selecting a Supplier

It’s always surprising how much prices can vary widely when obtaining cost estimates.   Over several decades of consulting I have obtained, reviewed or responded to hundreds of RFP/RFQ (Request for Proposal/Quote) for projects ranging from a few hundred dollars to a few million; and the range of estimated costs can be staggering and hard to evaluate. Here are a few hints to help you through the process, whether you are a property owner selecting an environmental consultant, or a consultant hiring a drilling contractor or subconsultant.

Pre-qualify Your Supplier(s)
Some projects may be relatively low dollar value, or very time conscious, so that it may be expedient to forgo a formal bid process and proceed with a time & materials estimate from a trusted supplier. In most cases however a competitive bid process may be preferable (or required) to obtain the most cost-effective supplier. In these cases I suggest using only pre-qualified suppliers that have proven they have the qualifications and expertise to complete the required work. Ideally this is something that has been confirmed by your own past work with the supplier, or through referrals from trusted connections; if not, ask for – and check - project specific references. It's important to do your own research and check not just qualifications, but also that the supplier possesses the necessary experience, licensing, insurance, staff and resources to complete the tasks on time and on budget. You should also request pricing from a sufficient number of suppliers to ensure a good selection of qualified bids.

Comparing Apples to Apples
Even when providing a detailed scope of work for contractor pricing I have seen cost estimates differ by an order of magnitude between suppliers. Its therefore important to provide as detailed and specific a scope of work to each prospective bidder, with clearly identified tasks, deliverables and timelines.   If there are potential or unforeseen work items, you may consider contingency allowances and request pre-determined hourly and unit rates to cover any extras. Including provisions for identifying, costing and approving potential extra budget items in advance will be beneficial if problems arise down the road. Where appropriate, you should conduct an on-site meeting with all the prospective bidders to familiarize all stakeholders with the project requirements. Any questions, clarifications or addendums related to the proposals should be communicated to all bidders equally, and expeditiously. For larger projects, or when required; preparing and executing legal tender documents comes with inherent liabilities, and should only be completed by those with the necessary legal and technical expertise.

Evaluating the Estimate
Once a suitable number of bids has been received, you will need to evaluate the respective submissions to select your best-suited supplier. Some bids and tender processes will specify how much of the evaluation is based on specific factors (e.g. deliverables – 50%, cost – 30%, experience – 20%). If not, my suggestion would be for the client to determine the top three to five factors that are most important to their project (e.g. overall costs, timing, prior experience, communication etc.), and then assign each of those items a weighted rank by their importance. The data from each bidder can then be scored, adjusted by the weighted ranking, and evaluated as an overall score. This could be further refined by considering less-tangible aspects as trust, communication and who you feel comfortable working with. While you don’t always have to divulge details of the winning bid, it’s courteous to inform all bidders of the results in a timely fashion.

Bill Leedham, P. Geo., CESA
Bill is the Head Instructor and Course Developer for the Associated Environmental Site Assessors of Canada (www.aesac.ca); and the founder and President of Down 2 Earth Environmental Services Inc. You can contact Bill at info@down2earthenvironmental.ca