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herefishy
27-07-2002, 01:21 AM
My local municipality solicited for bids for a maintenance contract (annual term) for the medium and low temperature refrigeration at a city owned convention center. Included were about 55 pieces of equipment consisting of (15) Ice Machines (2 of which are VOGT), nine walk-in coolers / freezers, and the rest are reach-in and undercounter refrigeration boxes. All of these spread out over a dozen service areas in two facilities.

The bid is to include monthly inspection and your typical preventative maintenace activities/materials, and fill out paperwork for each peice of equipment each visit...... The catch-22 (the way I see it) is that the contract must cover every part that might be required in necessary repairs!!

I talked to "maintenance supervisor" who wrote the bid specifications, and he verified that the language DID mean any part ever required. He told me that the same company has been doing it for seven years! I told him, "Well I'd bet you're right, because who else would bid on such a contract?"

:p

Andy
27-07-2002, 10:38 AM
Herefishy,
What can I say, you wouldn't want the contract, if you got it, unless the money is super. Even then the contract would only change hands if the people who have it at the moment messed up!
:(

Dan
27-07-2002, 03:20 PM
Herefishy, that's not an uncommon expectation from customers. They want us in the insurance business. But even blanket insurance contracts have exceptions, over-and-aboves, etc. You need to explore them to develop a feel for your billable potential. For example, what about light bulbs, ballasts, gaskets, acts of god and operator abuse. Are there extended warranties on the compressors? Is emergency service included? Can you get a truck or trip charge? Can you condemn equipment due to age and condition and get the sale out of the replacement?

Most such contracts have a 30-day clause where either party can back out of the contract. With such an escape clause, I would take my best shot at it and give them a number. After all, somebody else is apparently making money doing this.

twcpipes
28-07-2002, 08:11 PM
Herefishy,
The term, at least here, is "Guaranteed Maintenance". It is big business for the big players who have money to get into it. Many, many major large retail chains use it. And, of course, they are serviced by large A/C Refrig Companies. There is even insurance policies available for compressors if they fail. The whole idea is volume. The upside is, if nothing breaks, you are way ahead. The downside is, if you lose a lot of major parts, you can lose big.
One of the biggest problems I found when going behind these companies is they do as little as possible to maintain a contract.
But overall they make a lot of profit due to volume of contracts.
Tom
p.s.: One thing they invariably do, though, is obtain a "preliminary inspection" and get 30 days to fix everything they can find and be paid for those items.

superheat
29-07-2002, 06:08 PM
I would not touch it untill I saw all the equipment. After 7 years of not being able to bill for parts and labor, there is no telling what kind of hodge-podge equipment they have. The first year you will lose your butt making everything right again. It will take twice as long to figure some of that cobbled crap out, the first time you go out there. You also need lots of service data to track the trends. Without that data you will not be able to do much preventative maintenance. You will be reacting instead of proacting.

herefishy
30-07-2002, 03:29 AM
;) Everyone has represented my viewpoint on this thing. I appreciate the responses.

10-04 on the insurance comment.............. I am not an insurance company, and I really think that the insurance industry is the market that the (customer) is really interested in.

Ya' know, if we operated our businesses like an insurance company, we'd be thrown in jail.


:)

herefishy
20-11-2002, 06:20 PM
Believe it or not.... and end to a thread..... LOL!!

I had estimated that the full-service insurance policy that the customer requested would run near $40,000.00 (25,300 GBP). I received the bid results, and there were two bidders. One came in at +/- $35K, another at...... $12K !!!!!! LOL!!!

I called the "high" bidder and had a chat (I didn't waste MY time bidding it). I talked to the feller who was personally involved in his company's bid, and he certainly seemed to be more than qualified. He said he was at the bid opening and nearly fell on the floor when he heard the competitor's bid!

The City gave the low-bidder every opportunity to "back out" of the deal. But they stuck to their guns, and said, "No, that's our price, and we're sticking to it!".

The City purchasing officer told them that he will allow them to perform, but stipulated that in the contract he is going to write a 90-day grace period for them to "abort" without penalty, if they decide that they're not going to make it.

It's dern shame when the customer has pitty for you. Of course the customer in this case, should really be concerned about the quality of the services that they are purchasing. Whatever they saved on that low-bid, I think will be lost in litigation costs and recovery from the current contract after a new contract is bid.

:p