Answer: It’s best to be different when doing direct sales to the end-user client, allowing you to sell value and your unique products and services. At that point, pricing may not be the determining factor on winning the project.It’s best to be similar when working on a bid project with very specific product requirements and defined work results. If bidding apples to apples, the low bidder typically wins the project. It’s a no-brainer!
But wait a second … what happens when design-build companies play in the bid market?
They generally want to redesign the project and substitute all the equipment. Then they have hundreds of questions (posed as challenges) for the engineer or design consultant, primarily hoping to alter the concept or product selection.
Most of the time, these companies don’t win the bid anyway. If they do, it’s because they competed with a company that had a similar overhead structure (or they forgot something).
What happens when a bid market (pure systems contractor) company does some design-build work?
That usually doesn’t end well, either, unless it’s a replica of a project they’ve done before. These companies excel in replicable work and cookie-cutter projects. They generally have labor utilization and productivity ratios higher than design-build firms, and operate through a much different (lower) overhead structure.
Design-build firms: high overhead – low productivity/utilization
Bid firms: low overhead – high productivity/utilization
Based on what you do best, you have to decide which of these firms you are.
Yes, there are a few exceptions out there. The only way to make both scenarios work (that I know of) within the same company is to organize differently. These few companies (which just don’t have the right overhead structure to play in the bid market) have successfully managed to separate their internal design team from the bid team. It works for them, but for many others it does not.
Most NSCA member companies want to differentiate themselves, but simply don’t know how (or can’t make the investment to do so). Saying that you have better service than your competitors isn’t enough anymore, and everyone says that. You need clear, measurable, and viable proof that you are indeed different. -Chuck Wilson, NSCA Executive Director