Much like bringing your mother-in-law on a honeymoon, the bid process can be the first step on the path to destruction.

By Jack Beardwood

When it’s time to spend $50,000 on a new garbage truck or $2.5 million for a material recovery facility, it’s your reputation that’s on the line. If you end up with a stiff, that dinosaur will be staring you in the face for as long as you remain on the job. The bid process undeniably has its limitations (and pitfalls). Rather than approaching it like Russian roulette, there are ways to use it to your advantage.

Regarding his feelings about being required to use the bid process, Mark Bowers, solid waste program manager for the City of Sunnyvale, CA, remarks, "We’re drinking some pretty bad coffee here at city hall because we buy coffee the same way we buy equipment. But that’s life."

Bernard Howaniec, marketing vice president for Leach Company of Oshkosh, WI, says they continually shake their heads in amazement as agencies buy garbage vehicles that don’t match their needs. "It was a competitive bid and that’s what they said they wanted in the specs. We got the business, but we could have provided them a truck that would have served them as well at a lesser cost because it would have been a lesser truck, but it would have performed every bit as well in their environment."

He suggests that jurisdictions put the onus on the manufacturers. Communicate with them before issuing bid documents and write the specs so you can get a variety of proposals. "Take a different approach by saying, ‘Here’s how we intend to use this. Here’s what we are going to put in it. Now give us a piece of equipment that will withstand that.’"

According to Howaniec, a common mistake is buying more truck than is needed. For instance, they might purchase a 25-yd. high-compaction truck that can pack 1,000-plus lb./yd.³; however, they never fill it up. "They’re only ever putting maybe 12,000 to 15,000 pounds in the truck when they could have gotten by buying an 800-pound truck, a midcompaction truck, and filled it up a little more, and it would have lasted every bit as long and it would have cost them $800 to $1,200 less."

Buyers also tend to have the mind-set that getting more truck will minimize their maintenance expenses. "Therefore, they buy extra heavy steel and extra large cylinders," observes Howaniec. "They don’t realize that a minor element of maintenance is the thickness of the steel and the size of the cylinders, and if they were just to identify what their intended use was, they could buy it with a little different steel and [somewhat] smaller cylinders and not see anymore maintenance at all."

He maintains that the purchaser should let the manufacturers design the vehicles. One of the pitfalls is that buyers often call for special strengths of steels that go way beyond what most suppliers offer. "In most cases, the standard offerings from most suppliers are more than adequate to meet the requirements of a particular community, but somewhere along the line someone became a metallurgic expert and said, ‘We’re going to buy trucks and this is how we’re going to buy them.’ And the end result is that the municipality ends up paying a premium because it is something we have to purchase specially. In their specification, they try to design a vehicle as opposed to spelling out the intent of the vehicle in allowing the manufacturers to quote against the intended use."

Buyers should better educate themselves on traversing the bid process, advises Howaniec. He suggests attending classes on spec’ing out trucks that are offered at Solid Waste Association of North America events. "They talk people through putting down exactly what they mean so they will not be disappointed, so it won’t be, ‘Here’s a general spec and the low man gets it.’"

Howaniec points out that the more efficient agencies (including the City of New York and the City of Chicago) "partner" with companies, developing a specification with one or two body builders that really meets their specific needs.

Ron Zorn, general sales manager at General Kinematics in Barrington, IL, which sells sorting and separation equipment, echoes Howaniec’s assertion that the agencies should let the vendors do the legwork. "They can do a preliminary feasibility test to be sure that things are on track. There’s a lot of technical support available for a person who is putting something out to bid. The manufacturers have extensive resources and they’re willing to make an investment to get the sale."

When analyzing bid proposals, it’s important to make sure you are comparing proverbial apples with apples, advises Zorn. "There is an art and a science to recycling. It’s a field that involves systems engineering. It’s something that’s very difficult to bid on and achieve comparability. In many instances companies approach the project with a different equipment configuration. They [the buyer] have to figure out [whether] this company’s recommendation [is] going to work out as well as that company’s recommendation. Our class of stuff is not off the shelf. It’s not that cut-and-dried because there’s a lot of custom engineering to be accomplished for the municipality to achieve their goals.

"What kind of engineering support are you going to get? Is the company willing to engage in any feasibility studies? Can they custom-engineer a system for them and do they offer a performance guarantee?"

An example of frustration for vendors is when they have a stationary piece of separation equipment that they know will do the job, but they lose out in the static bid process to a less reliable mobile unit. "These are not necessarily apples to apples. Sometimes the low bidder may not be able to handle the job in the long run. He may have won the contract, but his equipment isn’t up to the task. Be sure that they can follow up after the sale with product support, service, parts, replacement parts, emergency services, and certain performance guarantees," Zorn stresses.

Jeff Dworek, director of operations for Metro Waste Authority in Des Moines, IA, notes that he designs his specifications with the intent of getting a variety of proposals. The key to success is getting several participants. "I encourage competition in the submittal of these proposals. I feel it makes the vendors sharpen their pencils in both the price of the machine and the warranty provided.

"For instance, we have a local vendor who provides an extended warranty on everything down to the rubber hoses, which I think is extremely rare in this industry. They’re giving a 5,000-hour warranty for even your hydraulic systems. The pumps are covered, even the rubber hoses. And that warranty also covers the labor and the transportation of the mechanic to and from our job site. I feel that only came [about] because of our making the bidding process more competitive. We’ve been able to get more out of our vendors in serving and supporting their equipment."

Dworek utilizes a matrix point system that evaluates a number of criteria in buying all kinds of equipment. "It helps us tremendously because it isn’t always the lowest-priced option that you want to go with, because there’s a reason why it’s a cheap piece of equipment. A lot of times municipalities will make their specs so tight that maybe only one machine meets the specs. All the other ones get rejected. What that does is jacks up the price of the machine that meets the specs. You end up paying more because the competition isn’t there. We don’t necessarily reject the machines because they don’t meet the specs. We evaluate how much does it not meet the specs. Is it only 5 horsepower? Is it the color? Is it because it doesn’t have an 18-inch-wide track on it; it’s only got 17 or 17.5 inches?"

Dworek’s system gives weight to a variety of factors, including warranty, service and support, and delivery costs. "You really need to pay attention to what you’re trying to specify, because what you write down is what you are going to get. You want to be sure it’s not detrimental that you inadvertently rule out a piece of equipment that can really do the job for you anyway," he explains. "A lot of times I try to evaluate whether this is a major item or a minor item. I try to simplify the breakdown into what is important to this piece of equipment. Is it the horsepower? Is it the size of the blade? There are other things that are minor."

He suggests that buyers meet with the vendors ahead of time to see what’s on the market. "Equipment is changing every year. There are a lot of innovative items occurring from an ergonomics standpoint. For instance, operating a piece of equipment is certainly a lot easier on your operator today than it was 10 years ago. I look to see that we have operator comfort. I feel as long as I can keep an operator comfortable in the cab of his equipment, you are going to get more production out of him and you are going to lessen any type of repetitive motion injuries. Some people don’t think they should put air conditioning in their cabs. We put air conditioning in all of our equipment. We want to keep our people comfortable in there. I feel if you put a guy in a comfortable cab, he stays in there and gets the work done."

Another suggestion: Don’t settle for the testimony of a pencil pusher when purchasing heavy equipment. Rather than talking with the person who bought the piece, Dworek prefers to talk to someone with 5,000-7,000 hours actually running it. He also takes the extra time to talk with the mechanics. "Generally the reference is the person who signed the purchase order, the person who developed the bid spec. Once he’s bought a piece of equipment, he may not be close to it and how it’s been operating."

They leave no stone unturned in evaluating landfill compactors. "We went down and inspected the compactors in operation at various facilities. We took the time out to go down there, meet with their people, see it operating, get our operator in the seat, and let him operate it, because we feel if we are going to spend $500,000 to $600,000 for a piece of equipment, it’s going to be on our site for many years. It’s a heck of an investment, and if it’s not the right investment, we lose a lot of money and a lot of productivity from that machine."

An important aspect of an equipment purchase is making sure parts are available, continues Dworek. "I require a vendor to stock fan belts. You don’t want a fan belt to break on you. You can’t operate a machine because [the vendor is] air express—mailing you fan belts from their central distribution point and it’s going to take two days to get to you. The parts supply and availability is critical because when that machine fails, you want to make sure it’s repaired as quickly as possible so you can get it back into the field."

Making sure your vendor stands by the warranty is another concern. "We require bonds to be put aside for the entire term of the contract," he points out. "We’ve never had to go back on those, but it’s one of those holds that we utilize to make sure that the vendor comes through."

As in every competitive arena, there are bound to be some hard feelings. In trying to reduce the chances for protest, Dworek suggests that buyers personally call the participants to let them know what their recommendation is. "I prefer them not to go to the board meeting and find that information out. It doesn’t do them any good and it doesn’t do me any good to have somebody come up in front of your board complaining about the bid process. I try to be upfront with them. They can vent at that time. You can answer their questions at that time. You give them an opportunity to vent their frustrations, answer the questions they have, not in a public meeting format."

Rick Mauck, director of streets and automotive services (including solid waste management) for the City of Santa Clara, CA, likes to peek over the shoulders of other municipalities to see how they structure their bid documents. "That way we don’t reinvent the wheel. That way the bidders are familiar with the type of package that’s coming out to them, so it’s not something new they’re looking at, because they probably bid on the same kind of package before. We talk to the specific manufacturers before we send out the RFP [Request for Proposal] to get a feel of what the costs will be.

"The main thing is if you see something that looks like it really works, then you should have that on your equipment. If you see one guy has it, just demand that you get that on whatever you’re buying, and usually you are going to get to the point where they have to provide it or they’re not going to get the business. They have to change their tooling system, their fabrication system a little bit to put in this new bell and whistle, but they’ve been putting it off hoping people will continue to buy units they way they are designed. One way to force innovation across an industry is to demand something that’s better."

An example of how Santa Clara was able to help forge improvements involved a street-sweeper acquisition. The low bid required employees to spend 45 minutes a day sweeping out the hopper. The second lowest bid could be cleaned in 10 minutes. "We had to add in the difference of the price with the extra maintenance time," recalls Mauck. "We had to tell the one vendor, ‘Hey, the system to clean the hopper is taking too long and it’s putting you out of the competition.’ So they redesigned their system so it would be similar to the other companies. You work with them. Even though we are a small city, there have been a couple of instances where we have made an improvement on a vehicle that’s actually been adopted by that vendor. What you’ve basically done is make it a new standard of the industry."

When they were purchasing a sideloader, Santa Clara also made a statement when a vendor was only willing to give them a 20-in. step into the cab. As Mauck describes it, "He’s [the vendor is] always going to say he’s okay and your needs are just desirable, but they don’t mean that much. So you have to end up really demanding the lower step into the cab. The guy said [there was] no way he could use his cab and chassis and get the step-up height we wanted, so we ended up picking the other brand of collection vehicle because the entry level on the cab configuration was more desirable for the employees."

Another thing Santa Clara requires is bid deposits. Cautions Mauck, "If you’re going to go through the process of evaluating someone, you want to make sure you are getting reputable people submitting a bid, that they won’t withdraw their bid after you spend time analyzing it. You also have to ensure they will deliver in the time they specified. Then we have liquidated damages if they don’t meet that time. For instance, I’ll specify 90 days for delivery after we sign a contract."

When purchasing a material recovery facility recently, Bowers and the City of Sunnyvale put out for bid a design-build contract, where they did not dictate the layout or the specifics of the project. "The designers were given the throughputs, the material mixes, and the expected truck numbers, and then we asked them to come back in a bid document and show us the layout and the equipment details."

Bidders also were asked to build it to fit the existing facility. The winner actually came back with a proposal that required the building to be expanded slightly. "They were low bidder and the preferred design. They had very carefully worked out fitting the machinery inside the existing envelope."

Bowers’s suggestions to those in the buying game: "One of the keys is to give the bidders the most information you can. It is important to search out qualified folks to send the bid package to. We sat down and thought really hard, looked through trade journals, looked for people who appeared to have good qualifications, and made sure that they got the bid package, along with advertising it the normal way. We went way beyond the minimum legal requirements to get the word out on the project."

They did everything they could to help the vendors help them make a decision. "Get the most information you can, well-organized information on the tonnages, the expected composition of the material flow. In this case, how much newspaper; how much glass, metals, plastics; the number of truck trips you expect each day; the dimensions of the trucks; how they unload; whether they dump to the rear, dump to the right side, the left side; how the compartments are arranged by material."

He says they had to plan for receiving newspaper in one compartment, mixed waste paper in another area, and then beverage containers, bottles, and cans all mixed together. "We included that type of detail and quantity information and physical stuff–the height, weight of the trucks, including when the body is tipped up to unload. You want to know how high that is so you have the proper overhead clearance. Just defining–thinking of what you’re going to do there and what you’re going to bring, what end product you’re going to get–is really helpful to the bidders."

After they put together the bid package, they stepped aside and let the vendors do the technical work. "The design-build aspect was the way to go, as opposed to us sitting down and designing this specific layout and specific equipment type," concludes Bowers. "We could have said, ‘Give us a 12-foot-long, 4-foot-wide conveyer, with this kind of bearings and this kind of belt material’ and tried to define the entire project down to the nuts and bolts. You can do that, but it’s difficult unless you have a very high level of expertise. In a specialized area like this, it was better for us to say, ‘These are the functional requirements we’re looking for and this is the envelope we need to fit them into. Tell us what you think is the best plan.’"

Making the bid process work can be a rocky road. As much as you’d hate to admit it, sometimes getting a piece of quality equipment can be a matter of luck. Remember that, as the buyer, you’re the one who is in control of the game. "The playing field should be your field," emphasizes Mauck, "and you should describe how you want people to play on it."

Writer Jack Beardwood has more than 20 years of professional experience working with newspapers and magazines.

MSW - September/October 2002