Preparing The Bid Package

The dollars are big and so are the chances for misunderstandings between the builder and the fire department for aerials and the more complicated pumpers.
The dollars are big and so are the chances for misunderstandings between the builder and the fire department for aerials and the more complicated pumpers. A pre-construction conference at the manufacturer’s plant is the place to ensure agreement before construction is started.
Gates are a new way to hold cribbing material in a compartment.
Gates are a new way to hold cribbing material in a compartment. If they are not in the specs, they could be added or traded for other items at the pre-construction conference. Ensure all trades or changes are documented and signed by both parties. (Fire Apparatus Photo by Bob Barraclough)

Editor’s Note: This is the second in a series of columns by Bob Barraclough about purchasing apparatus.

Bid terms in the spec are important. State when and where the bids are to be opened and that there will be no extensions. Allow 30 days for bid preparation and tell the bidders how long the fire department will take to evaluate the proposals and award the bid. Be reasonable. Taking three to six months to evaluate and place the order is not acceptable. Ask for four copies of the proposal so each committee member can have an opportunity to independently study the bid.

The spec should say five percent of the bid price is set aside for additions or changes that may be desired by the fire department after the contract is signed. Why? There always seems to be something that you forgot or something that is new. Or you may find a better way to do something that costs more money.

The five percent can be used to cover these items and not require the department to go back to your municipality or bank for more money. This can also be accomplished by specifying items that you can trade at the preconstruction conference. Hard suction hose, bells and extra gold leaf are examples of features you can use to negotiate.

Be sure to include statements saying, “The fire department has the right to reject any and all bids. Bids taking total exception will be immediately rejected and not considered. No prototypes shall be bid.” Require that proposals must be in the same order as the fire department specifications. If you don’t include this clause, you will have fits trying to compare the proposals when it comes to the bid evaluation phase. You should also ask for a list of fire departments – along with phone numbers – that have recently received similar units.

Detail how exceptions are to be handled. The best method is to require that any exception be printed next to the appropriate paragraph in your spec with an explanation why the bidder wants a different item. Clearly define that if there is any deviation or question on specific items between the fire department spec, the bidder’s proposal, the approval prints and the manufacturer’s shop build sheet (stripper), the fire department spec will take precedence. In fact, the fire department spec should be used when checking out the final vehicle (more on that in the next installment).

With the shaky financial situation in the world, bonds are more important than ever before. Bid bonds (at least 10 percent) ensure the bidder will sign a contract if his or her company is awarded the bid. A performance bond (100 percent) guarantees the fire department will get a truck to its spec and in the time specified. If the successful bidder fails to comply, then the bonding company is obligated to find an acceptable alternate manufacturer to build the unit. The bonding company will then have to pay the difference between the original bid and the price the second builder wants to complete the rig.

Payments Bond

A payments bond, is usually separate and should be written to ensure that all component systems – pump, generator, diesel engine, chassis, etc. – have been paid for by the truck builder at delivery time, as well as all subcontractor work such as electrical, plumbing and, particularly, installed electronic gear. [One fire department in New Jersey took delivery from New Lexington Fire Apparatus before it went out of business only to find that New Lexington hadn’t paid International for the chassis and didn’t provide a “Manufacturers Certificate of Origin.” The truck sat unused for over nine months until the matter was resolved with a lawsuit.]

In the spec require the bidder to provide a performance bond that is written by a U.S.-based company and a payments bond, and specify the cost of the bond (usually stated in dollars per $1,000 of the bid price). This will give you an idea of how comfortable the bonding company is with the financial stability of the company. A high bond cost per $1,000 of the contract indicates the bonding company feels less comfortable about the contract and the builder. Do not sign a contract that does not include performance and payments bonds . No exceptions. You don’t want a subcontractor – who you don’t even know worked on your truck – filing a mechanics lien on the apparatus.

Multiple Units

If you are bidding multiple units or a complex truck, make sure each truck is covered individually by bonds and require a pre-bid conference to which you invite prospective bidders. State that attendance at this meeting is mandatory in order to qualify to bid. This will ensure that any questions by manufacturers will be heard by all and that unclear requirements can be clarified before the bid.

Save yourself a lot of confusion by clearly stating that you expect a pre-construction conference at the factory (especially if it is a complicated truck) within 30 days of the bid award. Also specify: how many inspection trips you want (two is generally good, one at mid construction and one before the truck is shipped); how many fire department people are to attend (the fewer the better, but no more than three); the delivery time in calendar days; and that acceptance will take place at the fire department within three days after the delivery of the serviced and cleaned unit. Require the bidder to provide instruction on the unit to your training folks (not every person on every shift) prior to final payment. This should be stated specifically as so many eight-hour days of instruction at the firehouse to be provided to three department members at no additional charge.

Terms of payment are very important and should be spelled out in the spec. No more holding back 10 percent for 90 days to ensure the little things are fixed. That is what a manufacturer’s warranty is for. If you are dealing with a large manufacturer and have both performance and payments bonds, you can feel comfortable that any problems will get proper attention. Remember, “There are no perfect fire trucks, some are just more finished than others.”

Prepayments Warning

Whether to make prepayments is something your city or fire department financial wizards should carefully consider. There are many departments that have made prepayments and lost them when apparatus makers failed. Ask some of the customers of Peter Pirsch, Elite or New Lexington. Stay on the safe side, protect your municipal or fire department dollars, get a performance and payment bonds and only then should you consider any price reductions for a large down payment or for progress payments. Several reputable, high-volume manufacturers currently are offering incentives for such payments due to the national banking and economic mess going on since last September. Just be sure you are well-protected before you start writing checks in advance.

As for evaluating the bids, I recommend you ask that the firefighting component technical package be separate from the overall bid price. You and your committee can then compare each bidder’s proposal on an apples-to-apples basis. Then open the bids stating the price quotes and, before getting too excited, check out any stated exceptions. You could be lucky and learn the truck with the best technical specs is also the lowest bidder and has the fewest exceptions. Negotiating the exceptions should be separate.

If all bidders—and you should have at least three—take major exceptions, then the fun begins. William Peters, retired Jersey City deputy chief, authored an excellent book on fire apparatus purchasing. Get a copy of the book and look at his system of bid evaluation. You will find it most helpful in deciding which items are “must haves” for your community. Remember, low bid is not necessarily your best choice.

If the prices are within five percent of each other, you probably have a good set of bids. When you see that a company is 10 or 20 or 30 percent below all other bidders, beware. Another caution situation is when you only have two bidders and one is much higher than the other. There is something wrong. You should thoroughly investigate why there is so much spread in the bid results and who else in the region covered by these dealers is currently bidding or buying apparatus.

Call that chief and compare notes to help figure out wildly disparate bids. Bid evaluation takes time, knowledge and diligence. Don’t be afraid to ask a third party for help when the bids are confusing.

Involve Your Lawyer

Throughout the whole process it is best to keep your lawyer involved, especially when it comes to signing the order contract and reviewing the payments and performance bonds. A manufacturer’s contract has been drawn up by some big law firm and details are likely to be slanted to benefit the company. A fire department lawyer can recommend wording that protects your interests and gives you a fair opportunity to negotiate solutions to any unexpected problems.

Once the contract is signed, schedule a pre-construction conference within 30 days. If it is a simple pumper, you can save money by holding the conference at the dealer’s place of business. With a complicated heavy rescue truck an aerial platform or quint, go to the factory to ensure you and the manufacturer are in complete agreement before the engineering is finished and any metal is cut. If at all possible, the pre-construction conference should be the last time you make any changes. Once the truck starts in production, the cost to make changes goes up – very rapidly.

(The next installment will cover the pre-construction conference, inspection trips and the delivery process.)

Editor’s Note: Bob Barraclough is a 50-year veteran of the fire service and fire manufacturing industry. He is chief columnist for Fire Apparatus & Emergency Equipment magazine and a 20-year member of the NFPA 1901 Fire Apparatus Standards Committee. A principal organizer of the annual FDSOA Apparatus Specification Symposium, he is also a past president of the Fire Apparatus Manufacturers Association. Barraclough serves as a consultant to Rosenbauer America and Akron Brass and is called upon as an expert witness in litigation involving fire industry products. His career includes executive positions at E-ONE, Hale Fire Pumps, National Foam, Span Instruments and Class 1.

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