Wednesday, January 12, 2011

Specifications - The Importance of Good Specifications

I learned about the importance of good specifications the hard way. My first Procurement job was in the Air Force. I was responsible for operating and maintenance Procurement and would contract for services like painting, custodial services, landscaping etc. Clearly not the most glamorous work of my career, but it was a good place to learn.  As the government was very concerned about equality in treatment of Suppliers  virtually everything had to be competitively bid and work would be awarded to the lowest bidder, unless you could prove that they weren’t qualified. In that approach to Procurement, you wound up with a real “mixed bag” of potential Suppliers all competing for business. The joke we always had was that “the low bidder was the one who made the biggest mistake”. We also knew the other reality of government contracting was that the low bidder might fall into two other classes:
1)    Those that bid low expecting substantial changes, where they would make their profit up on the change,
2)    Those that would find a loophole in the specifications and use that to take enough short cuts to make the money back.

The best example of this second type of Supplier which relates to the importance of good specifications is what I call the “two coats story”. We awarded a contract to do painting of the exterior of a number of housing units. The contractor was proceeding with the job much faster than anyone had expected, so we went out to investigate. We arrived as they were painting what was obviously the first coat of paint, but they picked up their drop cloths and were getting ready to move to the next unit. The engineer asked the foreman when their second coat would be applied, and he said that it had already been. The engineer argued that the surface had not been previously painted and what we had seen was only one coat. The foreman then stopped, picked up the roller and ran it up the wall and said: “there’s one coat”, and then ran it down and said: “there’s your second coat”. The first thing that we did was to check the specifications to see if there had been a drying time specified between the coats and there wasn’. They had found a loophole and intended to use it. We exercised an option we had build into the contract to cancel substantial portions of the work. When we later re-bid the work, this time the specification had a four hour curing period between coats. This time the prior contractor wasn’t close to winning the bid. This taught me the need to have good specifications or scopes of work.

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