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While this approach facilitates competitive bidding, it has its drawbacks. First, the engineering firms that draw-up the plans and specifications typically do not have the specialty expertise to thoroughly design a complete and functional system. This leaves the owner at-risk for change orders from the contractor to resolve gaps in the design. There is also a duplication of effort because the contractor must develop a separate set of drawings to install their system with. This redundant design effort is an added cost to the owner.
B) Contractor Proposal
In this approach, the owner selects a contractor directly, often without a competitive process. This is typically the case for a system expansion, retrofit or upgrade project. The contractor develops a proposal that includes the scope of work and pricing, and the owner issues a purchase order or contract based on the contractor's proposal.
This approach leaves the owner without any pricing competition which can lead to a more expensive project. The scope of work and system functionality are determined by the contractor and may be loosely defined. Typically, the result will be a system that delivers the best profit for the contractor. While some owners are able to oversee and manage this approach, others may lack the expertise or resources.
Traditional Procurement methods
When it comes to installing or upgrading building control systems, owners typically pursue one of two procurement paths:
A) Design/Bid/Build
The owner contracts with an engineering company to develop plans and specifications detailing the project requirements. The plans and specifications are then issued for bid, and the lowest responsive bidder is typically selected to do the work.