Well, gentlemen and ladies, the battle to preserve what was left of the old ways of the old days is now officially lost, the latest casualty of The Great Recession, and to be honest I'm not sure if this a good thing or a bad thing. The Golden Rule still beats in the hearts and actions of many of us in the industry especially us older-timers. Within the paradigm of treating others as we wish to be treated, new perspectives on how we need to meet and beat our competition are evolving from that base of always trying to do the right thing. In the need to match the competitive edges our opponents are using and still maintain a high degree of ethics, the old rules are being heavily modified if not outright abandoned for these new rules: it being either that choice or choosing to close the doors for good.
One thing that has been kicked to the curb by virtually everyone is the concept, on bid day, of "who helps get you the dance, gets the order." No longer are quotes from suppliers and manufacturers' reps during the bidding process on a given job closing anything more than budget numbers to be plugged in and ignored as actual final numbers. You still might do it differently, but in all that I actually know about that's not really the case. Guys and ladies, let's be real: in the good old days to a certain point and at least some of the time this was absolute malarkey.
For one thing, we've all experienced this especially regarding equipment quotes. The reps often played a game of poker with the contractors, quoting extremely close to the specs, but not 100% from what they knew the basis the design manufacturer used in the specs, and often with a high single digit to low double digit difference in price, hoping the contractor would go with their number instead, and then hash out the details and try to get their equipment qualified by the engineer after the bid was won. Geez … I hated and still hate that nonsense!
In a strange way, I find it more comforting and easier to take all bids on bid day and use them as they should be used, as an indication of wanting an invitation to the dance – the details of who actually gets the order to be determined later during spit-in-your-eye negotiations once we have signed a contract with the owners. We, the contractors and the suppliers, all know within a few dollars what the final buy price should be anyway before bid day, so why not get rid of the hypocrisy? Isn't this a Golden Rule as the old way used to be since all are treated upfront equally?
Another casualty is the concept of paying subs and suppliers promptly on time even when our company is having our money held as long as possible by the architect or GC until it feels like a threat of a lawsuit is needed to shake that money tree. Some states have "pay when paid" laws, but even with those it's not unusual for the prime contractor to ignore them and laugh when lawyers are threatened. As tight as jobs are being bid right now, we can't be the bank for our subs and supply houses. Unfortunately, the pain of slow pay which we suffer routinely must be passed on down the line or what company cash reserves we might have will be quickly drained. Our employees have to be paid on time each week, but most companies I know have gone to 45 days or even longer pay cycles for subs and suppliers if not outright "you'll get paid when we get paid," required release of liens aside. This totally sucks, but it is reality!
My parents, who ran their very successful plumbing company for 55 years, not once in those 55 years failed to take their 2% prompt-pay cash discount by paying their monthly supply house bills that were billed on the 15th of every month on time. Pop said this was free money to him and that 2% added directly to the company's bottom line, but when was the last time you heard of any old-line supply house offering a 2% prompt-payment cash discount? You might get 2% prompt payment discount from your particular credit card when used to purchase fixtures and supplies from your local big box retailer (and we all know who they are), but that's the only way you'll get one, which brings me to my next semi-rant…
Lowe's, Home Depot, and similar stores … I don't hold what you did to the old-line supply houses against you. Except for a handful of markets, you dudes pretty much killed actual supply houses off when, using your leverage in buying entire factory production quotas for a given calendar timeline, you were/are able to sell fixtures and even some equipment and consumables at retail cheaper than what the mom and pop supply house next door could buy them for.
What supply houses exist now do so because they've adapted to the marketplace. They still offer reworked flexible lines of credit where they offer select customers extended credit to accommodate the new reality of money due, being held forever because they know their decades-old customers are good for it. Plus these supply houses still offer superior service as opposed to say "none," which big boxers offer and for larger commercial projects … obviously only they and manufacturers' reps can touch quoting and fulfilling them.
But still life goes on and there has been one major change from the way things used to be done as opposed to now and that is safety. Even though construction is often cited as still being the most physically dangerous occupation other than mining and agriculture (even CDC listed it in 2009 as being the most single dangerous way to make a living, (http://www.cdc.gov/niosh/construction/) , I still feel that while there's potential danger around every corner on every jobsite, the conscious awareness of what is and is not safe to do on the job has risen way above what it was 30 or 40 years ago. Owners are starting to realize that the bottom line of proper safety practices is that it doesn’t cost, it pays. I don't miss the bad old days of being ordered by my bosses to ignore even the most basic commonsense safety measures as a short-term way of squeezing every possible dollar out of the job at the longer-term expense of workers’ safety and health.
But still life goes as it always will, and we have but two choices: get out of bed in the morning and hit the day running, embracing the realities of the current macro economy and your particular micro market for what they are, or leave our industry all together for something else we want to do with more passion… Let your imagination and choices take it from there.
Craig is a second-generation mechanical contractor with unlimited Master’s licenses in boilers, air conditioning, heating and plumbing. You may contact him via e-mail at: [email protected].