MSW Management | Preparing for Bids

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There must be a way to help public bidding benefit all responsible parties.

By Paul Hull

“The negative perception of public bids must be expelled” and “There is too much at stake—literally, billions of dollars—for buyers, vendors, and the public to allow awkward, unacceptable situations to continue” are popular sentiments on the subject, from both vendors and buyers. Public bidding, you will recall, can be a nightmare for all parties, sometimes even for the winners. It can turn into a costly legal battle when dishonest moves are made to win bids or prevent others from doing so. One of the most popular suggestions we have received is that public authorities should make it perfectly clear what they want in a public bid, whether it involves equipment, services, or both. This sane suggestion does address what seems to be the biggest challenge for bid writers and bid fillers: Prepare and present the bid, and don’t allow changes or exceptions to creep in for personal, perfunctory, or political reasons. (It was to achieve this honest result that public bids first acquired the rules and regulations that control them. If everybody were honest, there would be no need!)

In advice to manufacturers about winning bids—especially governmental bids at the local, state, and federal levels—you will find that it is helpful to have your equipment known and understood by your potential customers. That does not simply mean you should advertise; it means that your potential customers should know you and your equipment so they will think of you as a good problem solver when an appropriate need arises. The other side of this situation is that we, the potential customers, should know as much as possible about what is available for the best completion of projects likely to occur in our domain. It is not simply a matter of sales and price. All parties involved, for their own benefit, have some homework to do.

Here’s a true situation for a vendor; it may explain why vendors get frustrated. You find a project for which your equipment is absolutely the best solution. You can provide exactly what the potential customer seems to be looking for, with excellent quality, at a competitive price, and with good benefits to both yourself and the customer. “Let’s bid on this!” say the leaders of your company. Managers in administration, engineering, production, and marketing agree. “Let’s write the proposal.” So you, with the enthusiastic cooperation of some of your best employees, spend many hours (including evenings, nights, and weekends because the opportunity is so perfect for your company) preparing the proposal. It’s long, more than 100 pages, but that is what is stipulated by the potential customer. Months after submission you discover that a competitor won the bid. How did he do that? How could he do that? Simply, your competitor probably presold the bidding authority. Your competitor learned, before the bid, the true requirements of the proposal, the possible snags for that particular project, what the customer likes to see in a proposal, what apparently little items excite and convince the customer, and what to offer as solutions for all the potential problems. His bid is tailored to those known needs, and to the bid requester, it will look better than yours. That’s how he won. His homework was better. The worst part is that your product may be better than your competitor’s, just right for the application, but it was not known to be better.

Are there lessons in this? Yes, vendors—perhaps through their local representatives—should be known to their potential customers, and they should know the true requirements and ramifications of a request for proposal. There is another lesson, however. This one is for the customers (We the People?), not the vendors. Bidders should investigate the potential advantages of alternative proposals and not assume that the usual suppliers are necessarily the best. Although the proposal from the company we know and have dealt with before seems good, at some time it is likely that somebody else will offer a better solution. We owe it to our supporting taxpayers to evaluate all proposals fairly. It is excellent to establish good business relationships with companies that prove the good value of their equipment and services, but it is also wise to keep an eye on new developments. Think of this. How many electric typewriters did you buy last year? Did you buy music on cassettes for your children at Christmas? Is it easy to find the clothes you favored a decade ago? Things change and we should know the changes.

Equipment Life Cycles
For equipment purchases, one of the most practical ways to determine what you really need is to look at the expected and desired life cycle of the equipment concerned. Accounting for the life-cycle costs of equipment is not a new theory; it’s been active for about 50 years. The simple arithmetic of equipment acquisition is that the purchase price is not the main cost, but it is surprising how often that purchase price becomes the most important consideration. The cost to sustain equipment—whether it’s cleaning our streets, picking up the community garbage, or managing the landfill—over its lifetime is greater than its original purchase price. If we can determine, before purchase, what aspects of a piece of equipment will reduce the cost to sustain it, we will have made an excellent start in specifying what we need and receiving good bids. In this matter, it seems essential that we get help from our suppliers and manufacturers. If they talk only of the purchase price, be cautious. If they have no information for you about maintenance costs, time between maintenance intervals, or spare-parts availability and costs, be even more cautious. Manufacturers should know the expected life cycle (and life-cycle requirements) of their products. Ask them to help you make your decision.

What are the elements that comprise the life-cycle cost? For almost any equipment you could consider the initial purchase cost, plus the cost of installation, insurance, and spare parts. Installation may not seem appropriate if you are talking about a compactor to crush materials at the landfill, but what if you are talking about a pump or a recycling machine? When you mention spare parts you are also considering the time that can be lost if you don’t have spare parts readily available. What about fuel? Estimates for fuel expense made two years ago would have been sadly incorrect last year. Labor is another cost that can become more expensive through the lifetime of the equipment—labor to operate the machinery and labor to maintain and repair it. How efficiently you run your operation is a crucial factor in the life-cycle cost and something that may affect the grade of equipment you request. Will your new purchases affect the operation of your office? Would a new garbage collection system increase the hours required for office workers? Better than that, would a new system lower office expenses?

The cost of purchasing equipment is simple arithmetic. For many authorities, the guideline is “get the cheapest that will do the job,” and that ignores the higher cost of maintaining, or owning, the equipment. (It’s like saying the true cost of an average marriage is the wedding. We all know there are items after that ceremony that can end up costing a lot more.) The costs of acquiring and sustaining equipment cannot be separated; think of them as twins, born together, existing in harmony with each other. You don’t have to sustain something you’ve never had, and if you acquire something, it must be sustained. At some authorities the onus for preparing life-cycle costs is placed on city or county engineers because the costs are perceived as technical (rather than financial). Engineers who combine a good knowledge of equipment and of the costs involved in the life cycle are most valuable. They are also rare, especially in our smaller communities, which are just as important as their bigger siblings because they face the same problems with smaller resources. In many authorities, the life-cycle homework will be a team effort, bringing together the expertise of operators, engineers, and financial colleagues.

Aspects of the Life Cycles
If we break down the life-cycle costs into two components, acquisition and continued ownership, we can see how any authority can determine what is involved and what should be included in any bidding proposal to avoid future problems. Let’s say you are purchasing a sweeper or a compactor. Do you have somebody who can run the new model efficiently? There will be some training involved, even for old hands, because today’s equipment is simple to run but is not just like yesterday’s models. (The un-muscled nerd who knows video games may well run today’s equipment more productively and less expensively than the six-pack bruiser will.) Will your supplier furnish that as part of your purchase package? Will there be any changes required in your facilities? Does the new equipment require additional storage space? Should you count the cost of any new construction required? If your new equipment is for the landfill, will it necessitate any day-to-day changes, not just in training the operators but in the design of the site itself?

Every new machine or vehicle will have technical data associated with it. (The manual is not simply a well-padded coffee-cup coaster.) Somebody must be responsible for knowing all about the new equipment. The obvious person is an engineer. Who will it be if you don’t have a qualified engineer? Will the vendor give you any technical training with your acquisition? As the equipment starts to work for you, you will learn techniques of maintenance and those mechanical idiosyncrasies that are the delight of design engineers and sometimes the bane of technicians. You will learn about upgrades to the equipment; they can be a practical, less expensive alternative to replacement of the whole machine as it ages. You will learn the most economical ways to operate the equipment and the way to ensure that its use is environmentally acceptable.

All these bits of knowledge cost money; they are, truly, part of the purchase price. Estimates vary about the cost of owning equipment versus the original purchase price. We have seen estimates of sustaining costs as low as twice the purchase price and as high as 20 times that price. Are these sustaining costs going to be revealed as such in the purchase price offered by your supplier? Probably not. But you can ask for the product that seems likely to have the lowest running (that is, operating, owning, sustaining, maintaining) costs as opposed to the product that is cheap to buy but expensive to own.

You can be sure manufacturers have researched the design and performance of their equipment to suit the needs of the marketplace because that is how they sell the equipment and keep their companies going. With that in mind, we pulled out the manufacturer-supplied information about three types of products—garbage trucks, sweepers, and compactors—to see what the manufacturers considered important. It could reward you well to do some detective work. Why did the manufacturer emphasize this innovation? Is this configuration a feature that could be a great benefit to your community? Could that new construction material have long-term advantages in the life cycle for your applications and ownership? Obviously we are not promoting any manufacturer’s offerings above another’s, but we chose three companies you have probably heard about: Heil, Elgin Sweeper, and Caterpillar. Let us add that we didn’t know about several of the advances mentioned in the company descriptions. If I were preparing a bid, we’d have found lots to think about.

Features to Consider Before the Bid
Heil begins its Web site concerning garbage trucks with a brief description of the role of each type of loader: frontloaders, rearloaders, sideloaders, and recyclers. By each type of loader you can access more detailed descriptions of specific models, with the helpful features of each. In the description of rearloaders, for example, Heil points out such advantages as the low loading height and large hopper area, which means your operator can load bulky waste or white goods such as stoves and refrigerators. Would that be a significant advantage to mention in your next bid? Or are sideloaders best for you, with their automation for lifting and emptying residential carts with a robotic arm? They are fast and economical to run, says Heil. Aha! There’s a definite life-cycle point. And they are acclaimed as safer for the operators.

One of Heil’s trucks is the Formula 4060 Split Body rearloader. It is powerful enough to handle those white goods too. This truck really has two bodies in one, with independent hydraulic systems that adjust pressure to provide high compaction for the refuse compartment and lower compaction for the recyclables (to lessen the chance of breakages). Its capacity can be 20 or 25 cubic yards. The Heil DuraPack 7000 is an automated sideloader with the power of the well-proven Formula lift and high compaction. It can lift 2,000 pounds and offers an eight-second cycle time. These models can handle up to 33 cubic yards and have served as many as 1,100 homes per day.

An important life-cycle consideration hinted at here is that a large truck will have to make fewer trips to the landfill. That’s the kind of arithmetic recommended for study before coming up with a bid request for a garbage truck. You could also read why Heil claims this truck to be easier to service than some others.

Why would a manufacturer make its sweeping unit available on a different chassis? Because customers asked for it, probably after studying the life cycle of different chassis. Elgin Sweeper, leading manufacturer of street sweepers, made the change for its single-engine sweeper. You can now get it on either an International 4300 chassis or a Freightliner M2. “Our customers asked us to offer the option of ordering the Broom Bear on the International 4300,” explains Brian Giles for Elgin Sweeper. The 4300 conventional chassis offers a powerful 230-horsepower engine and an Allison World transmission with pushbutton range selection and automatic shifting. “This power train configuration makes this single-engine sweeper both powerful and easy to operate,” adds Giles. Elgin Sweeper offers municipalities and contractors many sweeper options, taking advantage of new sweeping technologies, such as mechanical, pure vacuum, regenerative air, alternative fuel, and waterless dust control. There’s food for thought! Which type of sweeper would suit your community best? Which would be the type to specify in your bid?

Directly connected with the concept of life-cycle performance is the LifeLiner hopper system from Elgin Sweeper. To quote the manufacturer: “It’s a hopper liner and finish system that greatly improves the life, durability, and functionality of a sweeper hopper.” Advises Giles, “It uses a proprietary polyurethane coating that is more wear resistant than stainless steel and extremely resistant to chemicals. This liner system is incredibly durable and will stand up to most abrasive debris, while the smooth surface finish inside the hopper makes dumping and cleanup easier.” Durability is a good life-cycle concept, isn’t it?

Caterpillar’s description of its 836G landfill compactor tells us why it’s a practical machine for landfill work. For a start, the ground clearance is now more than it used to be.

The Cat Axle Guard System protects the planetaries, final drives, and seals from that all-too-familiar damage caused by wires and cables at solid waste sites and plastic and other materials that can wrap themselves around axle components. Items such as recessed bolt heads, which reduce snagging, and stranded materials show the thought that has gone into the design of this landfill compactor.

Caterpillar believes this system will reduce the need for periodic cleaning of axle assemblies (that is, reduce the cost of sustaining the machine). Under the cab of the Cat 836G there is a bottom guard that protects hoses and wires from assaults by flying debris and waste, and the front frame guards prevent trash buildup inside the frame; such a buildup can damage hydraulic lines. You can use a straight blade for most applications at a landfill, and the U-Blade is heavier, with a larger capacity. The U-Blade gives the operator more control of the trash when pushing it for long distances.

An interesting page in the same brochure concerns Caterpillar’s customer support and how it can help the performance of your landfill compactor over a period of ownership. A brief, compelling sentence is: “Look past initial price.” Caterpillar recommends that the financing options, too, be considered as significant as the day-to-day operating costs. And what can your local Cat dealer do to help you lower the cost of owning equipment? How can the manufacturer’s local representative help you with operating costs?

Some of the suggestions will involve training—with video, for example—and tips for effective maintenance. Here’s a little paragraph from Caterpillar that reinforces what has been said already in this article. “Customers should make detailed comparisons of the machines under consideration before buying. Cat dealers can give precise answers to these questions: How long do components last? What is the cost of preventive maintenance? What is the true cost of lost production?”

Making the Bidding Better
The public authorities in many, many communities don’t think they have a problem with their public bids, and that—if it’s realistic—is encouraging. If there is one common comment to all correspondents about public bidding it is that the process is a joint effort and should be addressed by all parties as such.

Clear communications make a good starting point, before anything is put down on paper or published. Vendors need to let others know what they have and why it may be the best solution for particular problems. Public authorities, with good rapport among all departments to provide the foundation facts, need to tell vendors exactly what they need.

In national projects, the waste of taxpayer dollars has reached awful amounts, at home and abroad, in recent years. The waste has been caused by different, dishonest influences, many of them precisely those bad habits that prompted legislation about public bidding in the first place. At the local level it should be easier to combat those influences and to represent our employers—the taxpayers—in a beneficial and prudent manner.

One complaint nationally has been that there are too many people with buying authority who have no idea what they are buying and too many people hired to powerful positions who have no qualifications for such authority. We can cure that at the local level more easily than at allegedly higher levels where there are more people and influences involved.

Winners will always approve and losers will always cry foul. Each public authority has the obligation to make its bids competitive for the benefit of both vendors and buyers, and each public authority has the legal right to do things correctly and the obligation to do so.

The task is not an impossible one. As we have tried to show, a good start would be for buyers to know exactly what they want for a particular project, to communicate that knowledge accurately and clearly to all qualified bidders, and to select the bid that will satisfy the community’s needs most fully. It requires research; it requires effort. Success will be rewarding, in spirit and in dollars.

Paul Hull writes on construction and environmental topics for several magazines.

MSW - July/August 2007