Commercial 101

March 1, 2000
In the commercial construction market, buying and specifying decisions are not a single event, but rather a process with many influences. Ultimately, those who understand how the market works, and how and by whom purchasing decisions and brand selections are made, are in the best position to influence the market in favor of a given product.Let's look at the various stages of a typical commercial project

In the commercial construction market, buying and specifying decisions are not a single event, but rather a process with many influences. Ultimately, those who understand how the market works, and how and by whom purchasing decisions and brand selections are made, are in the best position to influence the market in favor of a given product.

Let's look at the various stages of a typical commercial project and the people and influences playing a role in the process. Finding out about the job. Electrical contractors will often first hear about potential commercial jobs from the market grapevine, general contractors and other tradespeople, but they may also catch wind of a job from the F.W. Dodge Reports, New York. Dodge Reports collects plans for upcoming construction projects.

Determining electrical system needs. With a commercial construction project, this originates with the building's owner, who may be an individual or a corporation. Depending on how you define the commercial market, these buildings include office buildings, shopping malls, Main Street America shops, banks, theaters, museums, sporting facilities and other public buildings. Some companies may break these jobs down further into retail and government market segments.

Designing the electrical system. All elements of the system are developed and initial equipment selections are made by brand names, performance, "or equal," or product-description designations. Electrical consulting engineers, electrical design specialists working for architects, electrical contractors or electrical design specialists on a building owner's electrical staff do the design.

Selecting the contractor. The electrical contractor who will do the electrical work may be selected at any time prior to the construction of the system, most often through an open-bid process. If the contractor is also the system designer, (a design/build contractor) he or she is obviously selected prior to the system design stage.

The bid process. Once the contractor puts together a list of materials that will be needed for the job, he or she will then usually put that list of materials out to open bid, so electrical distributors can submit their prices. For most projects, the distributor is the source of products and tools, as well as information. Here are the various steps a distributor will often go through in the bid process:

Making a "takeoff." A takeoff is a listing of all the electrical materials that have been specified on a construction project. It includes the types and quantities of all products that the specifying engineer has specified. In lighting, all fixtures are on the plans in the fixture schedule. The types of products included in a takeoff are panelboards, transformers, switchgear, underfloor ducts and cable trays.

Preparing together the initial bid. The distributor's quotation person gets the takeoff and then calls manufacturers, manufacturers' reps and lighting specialists to get the products on a takeoff. The prices that the quotations manager collects are used to develop a final bid. Most packages include prices from a number of suppliers. At bid time, the distributor's salespeople may have some leeway to negotiate the price with electrical contractors.

After the bid is awarded. After all electrical contractors submit their bid packages, the low bidder is selected and awarded the job. At this time, if one of the contractors that the distributor deals with has won the bid, the distributor then prepares a "cut" for them. A "cut" is a list of exactly what products the supply house has submitted to be used in the package. A distributor will often have to make at least a half dozen copies for various engineers, the contractor and other people related to the project.

Some of the products may not be exactly what the specifying engineer has asked for. These substitution products are submitted for approval on the part of the specifying engineer. All products in the cut are accompanied with specification sheets.

After the bids are in, the project's owner may tell the general contractor the job is over budget. The general contractor may then come to the electrical contractor to ask for suggestions on reducing cost. Some options to do this may include coming up with another manufacturer's lighting fixtures or laying out the switchgear in a less-expensive way.

Design and specification review. All members of the electrical construction team participate in this process: consulting engineers, in-plant electricians and contractors. Primary considerations at this time are the specification alternatives suggested by the contractor and the in-plant electrical staff, and will be primarily governed by installation, operating and maintenance considerations. Most component selections will be finalized here. This is when an electrical manufacturer, rep or a distributor may offer their products as alternatives to the product specified on the plans if it's an "or equal" specification.

System construction and in-construction modifications. Intricate modern electrical systems require coordination with other building considerations. System designs and component selections require frequent modification during installation of the electrical system. The electrical contractor or in-plant electrical staff generally will propose these modifications, which are subject to the consulting engineer's approval ifone is working on the project.

Operation, Maintenance and retrofits. When system construction is completed, the owner's in-plant electrical staff takes responsibility for operations. This staff will most often also handle maintenance and repair work, although it's becoming increasingly common to hire outside contractors to do this work. The contractor who installed the system is a valuable ally to the owner's staff when repair work or modernization is required.

Retrofits may occur at any time, and are generally a relatively continuing process as production loads increase, new processes are introduced and lighting, working climate and other requirements change. When system extensions and modernization are undertaken, all members of the original electrical construction team may be involved.

Finishing with a flourish. As with any job, your commercial customers will remember you most by how you handle the final phases of a project. This is often the time when you are hustling to complete the job and get onto the next piece of business. It's also the time when some minor annoyances can screw up a job that ran smoothly for months or years. Says one distributor, "One of the biggest headaches is finishing up a job-the nitpicking stuff, the last two or three weeks. Customers don't remember the year or two that you spent when everything went smoothly, just the problems that cropped up in the last two-to-three weeks-defective lenses, broken ballasts, the $100 item out of a $500,000 job."

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