WK 6_TONY_CHOOSING A SUITABLE ALUMINIUM SUBCONTRACTOR

Problem Definition
I am currently working on a housing project that requires aluminium windows and doors to be done by a subcontractor. Considering that it is a small personal project no advertisements were made for the works. Three aluminium subcontractors were introduced to me and from whom I obtained quotations. I have no previous work experience with any of the subcontractors and I also had a limited budget of $4,605 for the works. I was faced with the problem of selecting the most suitable subcontractor for the works.

Proposed Alternatives/Solutions
The proposed alternatives revolve around the offer from the vendors. The selection of any of them excludes the choice of any of the others, the alternatives are therefore mutually exclusive [1].
The alternatives are summarized below.

Alternative A
Quoted sum by Vendor A: $5,000
Negotiated Sum: $4,802
Duration: Not Stated
Required Profile: Tower standard profile
Quoted profile: Not stated
Others: Quoted profile not known until negotiations

Alternative B
Quoted sum by Vendor B: $4,770
Negotiated Sum: $4,145
Duration: Not Stated
Required Profile: Tower standard profile
Quoted profile: Tower standard profile
Others: No profile sample shown or submitted


Alternative C
Quoted sum by Vendor C: $4,605
Negotiated Sum: $4,079
Duration: Not Stated
Required Profile: Tower standard profile
Quoted profile: Tower standard profile
Others: Showed sample of various profiles and explained the differences between them

Expected outcome of the proposed alternatives

Alternative A
Profile quoted was not stated. On enquiry the vendor confirmed his quote was for a profile cheaper than what I requested. If I had assumed it was the required profile he quoted, it could have led to scope change and hence cost overrun at the end. Discount on original quote is 4% and the negotiated cost is 4% above my budget. Duration was not stated; but this not critical for me.

Alternative B
Quoted as per required profile and negotiated cost is within my budget. Duration was not stated. Discount on original quote is 15% and the negotiated cost is 11% lower than my budget. This vendor did not present profile samples.

Alterative C
Quoted as per required profile and negotiated cost is within my budget. Duration was not stated. Discount on original quote is 10% and the negotiated cost is 10% lower than my budget. This vendor presented profile samples and showed the differences between the various profiles

Selection Criteria of Proposed Alternatives
1. To be within budget. Budget is $4,605
2. Understanding of specifications/certainty of profile
3. Vendor should not be desperate

Analysis and Comparison of Alternatives
Alternative A is higher in cost than B and C and it is above the budget price. The offer did not reflect the scope and would lead to cost overruns. It was therefore not a possible option.
Alternative B & C are possible alternatives as they are within budget and for the required profile. Alternative C however added value by the presentation of profile samples to show clearly what he intends to quote for and to confirm that it is in line with client’s requirement. Alternative B showed desperation in the negotiations and ended up with a 15% drop on his original price. The problem with desperation is, the vendor accepts any price just to get the job and ask for contract review in the course of the works. This trend was noticed in the Site Engineer who introduced him. He brought no profile samples to back his claim of understanding of the client’s requirement.

Selection of Preferred Alternative
Based on the comparative analysis above and the selection criteria, Alternative C was preferred and awarded the contract. While he was not the lowest, his final price was within budget and he showed a good understanding of the client’s scope requirement. Lack of clear understanding of client’s scope; leads to cost overruns. Furthermore Alternative C added value by educating the client on the various profiles that are, currently in use.

Performance monitoring and post evaluation of results.
The works are currently in progress and in monitoring the works; I will need to match the produced windows/doors with the sample profile to ensure the specification is not deviated from.

References
1. Sullivan, W., Wicks, E., Coelling, P. Comparison and Selection among Alternatives, Engineering Economy, 4th Edition ch 6,pg 259,