Security System Procurement

You have performed a security requirement analysis and determined that part of the solution to the vulnerabilities you have identified will be the implementation of new or upgraded security systems. Although there are a number of system design and documentation tasks to be performed before procuring the hardware and software installation, consideration of the procurement methodology should be an early action item to help guide the form, format and content of the design and construction documents.

This article examines some of the issues at stake and will help make the procurement task more efficient and productive.

To bid or not to bid

Do you want, or need, to competitively bid the installation of the system? This question may be decided for you by your organization’s purchasing policies. Many organizations — particularly public agencies and large private companies — require a formal competitive bidding process. Some organizations have a dollar value threshold, below which sole-source procurement may be permitted, but the figure varies considerably.

There are many benefits to competitive procurement even if it is not required:

• It forces you to consider the needs of the project in sufficient depth to develop a clear, concise and comprehensive set of design documents;

• It provides the opportunity to discuss the design with additional systems experts, some of whom may have cost-effective solutions you may have not considered;

• Even if you plan to award the project to a trusted contractor, it helps to obtain alternate prices to confirm value and to assist in negotiation; and

• You get the best value for your budget.

IFB or RFP?

The two major forms of procurement are Invitation for Bid (IFB) and Request for Proposal (RFP), although there are many hybrid alternatives in between. We tend to use the terms “bid” and “propose” synonymously, but there is a big difference between them.

An IFB may be sent to pre-qualified contractors or may be publicly advertised by public agencies. It typically requires that bidders return a completed, pre-printed form that may have no more detail than the bidder’s name, address, project number and bid price. The contract resulting from an IFB is usually awarded to the lowest bidder, although the bidder’s qualifications may, and should, be scrutinized carefully.

Because there is little or no technical input from the bidder, the system documentation — plans, specifications, equipment schedules, etc. — must be very detailed and accurate, since the contractor is not sharing in any design responsibility and is relying on the bid documents to price his or her bid.

An RFP, on the other hand, is looking for a proposal from the candidate contractors. The proposal is the contractor’s interpretation of the project requirements and may include his or her design input for performance, efficiency and cost effectiveness. The resulting contract is now a joint effort with some of the design responsibility shifting from the owner to the contractor.

An RFP requires a more detailed response from the proposers which, depending on the project, may be up to several hundred pages. It is useful to specify the required proposal format in the contract documents, so the task of comparing apples-to-apples is simplified. Typical RFP responses should include: Contractor qualifications (financial, years in business, experience on similar projects and systems, project staff resumes, etc.); the contractor’s understanding of the project and its scope; any assumptions, exceptions or clarifications; catalog sheets describing specific equipment being proposed; and detailed pricing with materials and labor breakdowns.

Analyzing the responses to an RFP will require considerably more effort than for an IFB, but such effort pays dividends by ensuring that you select, with the highest degree of confidence possible, the contractor with the best solution for the project. On the other hand, the construction and contract documents issued for an IFB must be “rock solid” — i.e., very detailed and very accurate — if the outcome of the project is to meet your original intent.

Contracting Hierarchy

On small projects and upgrades, the security system procurement documents will be issued directly to candidate security contractors; however, on major construction projects, there are many contractors involved, and it is useful to understand their roles before deciding who will be the “prime contractor” for your security system implementation.

Overall construction responsibility is usually given to the General Contractor (GC) or Construction Manager (CM), who may be the same entity. The GC will hire the Electrical Contractor (EC) and a myriad of specialist contractors for different trades, such as drywall construction, door hardware, elevator work, etc.

The GC, in an attempt to keep the contracts to a minimum, would prefer that the security system work be assigned to the EC; however, typically the EC has little knowledge of the workings of low-voltage security systems or thier components and will rely on a security contractor (SC) for final hook-up, commissioning and testing, in addition to supplying the equipment. In the event of a problem, a finger pointed at the EC will result in the EC’s finger pointed at the SC.

To maintain a sole source, or “turn-key” responsibility for security, it is often preferable to award the security contract directly to an SC. This option has another important benefit: if we are issuing a request for proposal: we will deal directly with SCs; we receive complete proposal packages; we can negotiate with them directly; and, we make the award decision. In addition, dealing directly with the SC means that shop drawing submittals, change order requests and day-to-day communications are direct and do not require a middleman.

The SC — particularly in a new construction union labor environment — may not have the necessary grade of labor for all of the installation work; however, it is preferable for the SC to hire an EC as a sub-contractor. It is important that the prime responsibility for the security work is in the hands of the contractor who is most knowledgeable about the technology and its application.

 

Pre-qualifying Candidate Security Contractors

If the procurement is “public,” as many state and local government regulations require, the project may have to be publicly advertised. In some cases, a two-step process is followed where response by contractors to a bid advertisement leads to a qualification procedure that reduces the pool of bidders to those best qualified for the project.

Whether “public” or not, the intent is to identify a group of contractors — between three and six — that best fit the criteria for a successful project. They have experience with the type of system to be installed and on projects of similar size and complexity; they are financially sound; and, they can work as a team to coordinate the work with the other trades on the job site.

It is also recommended to interview the prospective contractors before adding them to the bid list — note that the contractor’s project manager is considerably more important to the success of the project than the salesperson. Ability to communicate, audibly and in writing, as well as experience, reputation, availability, approach to problem solving and “chemistry” are all important elements.

Candidate contractors may be ones you have worked with before, recommendations from your network of fellow security professionals, or responders to a questionnaire mailed to companies in a phone book or industry directory.

It is recommended, however, that you only issue your protection system design to pre-qualified companies. If the design is very sensitive, you should require the execution of non-disclosure agreements (NDAs) with all prospective contractors, limit the issue and copying of documents, and require the return of all documents with the bid or proposal.

 

Issuing Contract Documents and the Pre-bid Conference

The contract should include construction documents, which may contain plan and detail drawings, riser diagrams, equipment schedules and detailed specifications. Some public bids require contractors to pay for contract documents, others to submit a deposit.

How much time should you allow for contractors to prepare and submit bids? If the project is not complex, and the security contractor does not need to obtain quotes for sub-contract labor, a week or two may be sufficient. Larger projects, and those requiring detailed proposals, may require up to four weeks.

It is recommended that a pre-bid conference be held five to seven days after the issue of the contract documents to allow contractors to see the field conditions, for them to clarify any design or contract details that are not clear, and for you or your project manager to reiterate special conditions or design features. The conference also gives you an opportunity to meet with contractor personnel and encourages that contractors read the documents before the meeting.

It is important to lay down some ground rules for communication. Depending on the formality of the bidding procedures, you may wish to insist that all contract or technical questions be submitted in writing (typically by e-mail) to a single contact (i.e., no phone calls) and that all questions and answers will be forwarded to all bidders. A time limit of, say, five days before the bid due date, should be imposed.

 

Selection Criteria & Proposal Analysis

If the procurement is public, as might be required for a government agency, the criteria for contractor selection may be as simple as “the lowest price from a technically responsive bidder.” For most purchasing decisions, however, the selection criteria can be many and varied.

Early planning will make the analysis of contractor proposals easier to perform. Prior to issuing construction documents, the selection criteria should be determined and each given a weight or importance factor. Representative criteria are:

• Price: a preformatted pricing sheet is useful for comparison. The sheet can be issued as a spreadsheet file and responses in file format will allow more efficient analysis.

• Company Experience: the number of years in the industry or the quantity of similar projects completed.

• Employee Experience: resumes of key employees who will be assigned to the project, in particular the project manager.

• Financial Stability: basic financial reports.

• References: for completed projects, with names, positions and phone numbers.

• Training: experience levels and factory training/certification on specified equipment.

• Responsiveness: ability to follow instructions on proposal content and format, and timeliness of delivery.

• Understanding: of the intent and goal of the project.

• Capacity: backlog of current and anticipated workload for employees being assigned and ability to perform the project on schedule.

• Contract Acceptance: acceptability of any technical or contractual exceptions to the proposed contract.

• Creativity: design suggestions for improvement in performance or reduction in cost.

Once the analysis has reduced the number of contractors, a face-to-face meeting to evaluate contractor personnel is beneficial. Insist that the proposed project manager — the most important person in this process — be present, and allow that person to answer some of your questions. If you are not technically oriented, find out if the project manager has the ability to explain technical problems to your understanding.

Contractor interviews provide an opportunity for negotiation. There are limits to the reduction in price that you should seek without a corresponding reduction in scope — if the contractor’s margin is too small, the project will not be given top priority and the contractor will seek every opportunity take shortcuts or to claim additional costs.

 

Online Procurement

Many large companies have implemented online procurement, or “sourcing” systems. They can be one- or two-step (pre-qualification and proposal) processes. All contract and design documents are posted online and selected proposers receive e-mail notification of each step along with credentials (user name and password) to access the sourcing website. Responses to requests for qualification materials and proposals are uploaded to the website database as complete files and/or the candidate completes questionnaires online.

This method of procurement seems prevalent with large corporate sourcing departments. Undoubtedly, it is more efficient where they are managing the procurement for so many projects at one time. For the proposer, the process is somewhat clinical and the customer personnel are anonymous.

 

David G. Aggleton, CPP, CSC, is president and principal consultant of Aggleton & Associates Inc. He has been practicing in the security system consulting and design field for over 30 years. He is a 20-year member of the ASIS Standing Council on Security Architecture & Engineering and a board member of the International Association of Professional Security Consultants. He can be reached at dave.aggleton@aggleton.com.

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