Cheap is good but how do I get best value?
Dispelling the common myths in the onsite wastewater business.
The IWS team can assist you in value engineering your project – including collection, treatment, dispersal, and overall construction. In addition, IWS can provide a constructability review to make sure what gets designed can be constructed without unexpected additional filed costs to the owner.
Over the years we have seen and heard many myths about saving the owner project cost and we thought that we would give you our take on what typically ends up happening:
-
The Owner saves money if he purchases the equipment direct – It starts out sounding very convincing, if the owner purchases the equipment directly from the manufacturers rep there is no contractor’s mark-up. The reality is that the owner typically isn’t aware of the market price for treatment system components because they are not in the market. An experienced design-builder or contractor knows the market pricing and can get the owner the best price for their system. In addition, we have seen the manufacturer reps add features and upgrades to the equipment which are unnecessary and drive up the cost of the project. Each item when isolated doesn’t seem like much, but when added together can add 10 % to 15% to the overall project cost. IWS purchases equipment for projects all over the US and we have seen mark-ups on big ticket item fiberglass tanks exceeding 50% when the owner purchases direct.
-
But the contractor recommended I buy direct! – In most cases when we see a contractor recommend to an owner that they purchase the equipment direct it means the contractor doesn’t have the financial strength to finance the purchase of the equipment. That should be a red flag to the owner – if the contractor doesn’t have the financial strength to purchase the equipment how do I know he has the resources to complete my project on time in a safe manner without cutting corners? Does he have all the insurance to protect me? Will he be here should a future problem arise and I need help? Is he following OSHA requirements so that we don’t have an accident on my property which puts me at risk?
-
The market is so bad you can really work the contractors – There is no doubt the overall US economy is in a very slow recovery and there is oversupply in some construction capacity. However, finding the lowest cost contractor for your project may not be the bargin that you expected. We have seen numerous cases when the low bidder doesn’t have the resources to complete the scope of work on a timely basis and it ends up costing the owner loss of business revenue and profits. In addition, the lowest bidder may not have the quality control or experience for your specific project. Will they respond during the warranty period when you call? Will you need someone to come back to fix their issues? Did they install the equipment in accordance with the manufacturer’s recommendations? Cheap doesn’t always save you money – it can cost you more.
IWS would welcome the opportunity to discuss your project needs and provide some initial thoughts for you to consider.
Want to learn more? Read some of our similar articles:
Sign up for the Integrated Water Services newsletter.
We share important perspectives and news on MBR wastewater treatment every two weeks.
