Wednesday, May 30, 2012

continuing from yesterday

Things ended rather abruptly yesterday. It was partly due to time and partly due to a stomach that is ailing yet again. Twenty-four hour illness no more. We're rounding 72 hours now!

Yesterday, I rather casually (and parenthetically) mentioned that trust was the most essential element of any relationship. Other elements of the relationship, whether it is personal or business, are important, but they all ultimately spring from a foundation of trust. I should also throw in the caveat that this only refers to healthy relationships, again, both personal and professional. In the work context, which is what I want to focus on, this generally means doing what you say you're going to do. This could be for a colleague, manager, or client. People expect certain work product and output and you need to deliver.

The problem that stems from the cost recovery discussed yesterday is that it leads to state agency involvement which then leads to a tender process that treats all bids that pass the technical proposal as being technically equal and then it comes down to price and price alone. Price is not about trust. Price is about making your bid as low as possible in order to win and then immediately turning around and going back to what you actually wanted to do in order to make as much money as possible. It's called "up-selling" around here though I am sure it goes by many other names. You could view this as being somewhat dishonest if you are proposing something you never planned to do. The catch though is that the client knows you won't do it either. They know exactly what the "game" is and they play along with the whole process. Now, some savvy clients who are heavily involved and not just doing some copy and paste job from the last tender know how to be ultra-specific in the technical requirements. This essentially shunts you into a single offering that would actually be what is used. That process always feels more honest as it is clear what is going to be done. But the loosely-worded tenders with the bait-and-switch proposals are the norm. And that process, driven by this desire to appear as cheap as possible has no trust involved at all. There's no real dialogue to be able to offer the best possible solution. Instead, it becomes this twisted process of offering something that you will never, ever do, and it's not even for the sake of the client. It is for the sake of the usually clueless state agency that has no idea what their trying to review. The good news is that once contracts are awarded, the client and us as the vendor can go back to the dialogue we wanted to have and get back to solving problems and offering solutions. Every once in a while, that doesn't get to happen.

If a state agency is overly meddlesome, they will lock an operator (our client) into the offering in the tender and keep that as the targeted cost of the well for the purposes of cost recovery. This leads to the saying I was once told in my first location. We had been trying to remediate a well but the client kept going for the cheap option even though we recommended something else. After two failed attempts at remediation, the client finally agreed with our suggestion and it worked. The saying goes, "There's always enough money to do it wrong three times before spending the money to do it right." Basically, this is a cost versus value argument. You can cheap-out and have a bad or useless fix and then have to try again. Alternatively, you can spend more money the first time but only spend that money once. Cost versus value. It's the classic argument for any luxury brand maker. (Any good luxury brand maker as opposed to one that slaps an ugly logo an a handbag and then has people clambering to buy it for a thousand dollars.) Anyway, back to the state agency and our handcuffed operator. If the operator is compelled to use rock-bottom pricing from vendors of dubious quality and track record, they can easily find themselves in a position where they end up having to spend more money in order to redo work or fix mistakes from the first go-around.

Despite these drawbacks, it makes plenty of sense to have a tender and award work in this manner. In theory, if run well, a tender can help lower costs. It ostensibly makes the process transparent and prevents collusion and price fixing and under-the-table deals. Hahahahaha. This is Turkmenistan. There's a reason some competitors and clients say they can customs clear their goods in less then a week while ours take the standard 30 days to clear. And I assure you it is not a problem with our paperwork, unless it is due to inadequate amounts of paperwork that say "This note is legal tender for all debts, public and private" on them. The catch with a tender is that it has to be run well, which means tight and specific technical requirements. But as I said earlier, that is not the norm in this business. Instead, I will churn through this wonderful exercise called a tender because, well, because it is my job and I'm a professional.

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