Value Engineer those light fixtures

In Electrical Contracting Articles, Electrical Estimating Articles, ramblings by David Parden

Do you own or work for a smaller electrical contracting company? Are you competing against larger electrical contracting companies? Do you wonder how they can afford to work cheaper than you on competitive bid projects? You’re probably tempted to believe that they are getting better prices on their commodities and you may very well be right but your lower overhead should be able to offset the edge they are getting on commodities. What else could it be?

If it is a large project that has a particular brand of lighting specified look no further than the lighting representative in your area. These guys are the used car salesmen of the electrical industry. They are the bane of an estimator’s existence on bid day. How many times have you sat around on bid day nervously watching the clock everything is ready except your fixture quote. Then when there is barely enough time to adequately review their quotes they come in. God forbid there be an issue with types or counts.

There seems to be a growing trend by lighting reps to feed direct quotes to certain electrical contractors. The local supply houses or helpless to prevent this unscrupulous activity from happening. They hate it as much as you do.

Here is how the game works. The lighting representative sends a direct quote to the large electrical contractor which is maybe 7% lower than what he puts out to the suppliers. The suppliers add their markup to the bogus quote. If the local supplier adds only 3% markup you are facing a 10% price advantage. Your lower overhead cannot compete against that. The price the lighting representative gives the large electrical contractor already has the local supplier’s profit built in. These guys have the gall to dictate the profit margin of the local supplier. Never mind the fact that the local supplier has to deal with submittals and warranty issues, tough luck!

There is a way to combat this though. You’ll make enemies along the way but why should you care? Find an honest lighting representative. I know you may be saying to your self that is an oxymoron but they do exist. Whenever possible provide a value engineered light fixture package. Do not include the value engineered light fixture package in your base bid. Include it as a voluntary deduct. Level the playing field. Let the owner see exactly what is happening.

You are also probably worried that it is not approved by the engineer. Again, who cares? Engineers are paid based on the value of the project. Many specify high end equipment to run the cost up. Have you ever wondered why they want steel insulated throat compression fitting in a NEMA 1 environment, or ¾” EMT when ½” is more than adequate?

Chances are if the owner sees what they can potentially save they are not going to care who manufactures the fixtures as long as they are equal to what they want. The owner decides what goes into their project not the architect or engineer.

If you are lucky enough to live in an area where these things don’t happen consider yourself blessed!

Perhaps if enough electrical contractors give the lighting representatives a steady dose of their own medicine maybe they will straighten up and fly right or go do what they were born to do and sell used cars!