School, 100 Camera System, 1 Bid, 3x Budget, Needs Help

A school reached out to us asking for help. They are in a tough spot and are trying to figure out what to do.

They've asked to remain anonymous but I can share some particulars of the situation.

It is a fairly large / complex project, with multiple buildings and a parking lot. For ~100 cameras, they allocated $100,000 but the only bid came in around ~$400,000. The bid, unfortunately, has no breakdowns so you cannot tell where the cost is coming from.

But at ~$4,000 per camera, there is obviously a lot of money for install or a huge markup on products, since $4,000 is a lot per camera. That noted, since they have multiple buildings and parking lots to cover, that could be driving the install cost way up.

One thing I suggested to them was to ask the bidder to break the bid out per item and per installation, as possible, so they can better understand what is driving cost.

The other bigger issue is that, with just one bid, you cannot tell if someone out there would be willing and capable of doing the job for far less.

What do you recommend? Any advice?


Have they actually tried going back to the bidder and ask what is the biggest part of the cost? If the bidder is expected to wire that entire campus, yes, that could be easily it. But I don't see the harm in them asking.

The other aspect, in my opinion, is they should not have been too sticker shocked if they had hired an independent consultant (not a construction GC) to assess their needs and give them and estimated, ballpark figure. They could have put out some RFI's to see what they get back. Maybe they did, maybe they didn't.

I'd be real interested to see the RFQ, but you said they wished to remain anonymous. Did you guys get to read it? Was there some CSI stuff in there like facial identification system of people 200 ft away or being able to read any car plate in the lot, anytime 24 hours, or something ridiculous like that?

I did not see anything outrageous in the bid. It was pretty straightforward.

One thing they could do would be to drop down from mainstream American branded products to Chinese ones. With 100 cameras, though, that might save ~$50,000 but the bulk of the total cost is clearly coming elsewhere.

I still think if they could get more bidders, that would help immensely. The one bid seemed quite padded / vague.

Maybe the scope of work was vague enough to justify the padding? Budgeting $100k for 100 cameras is more than a little aggressive, even with Chinese product. I would start by reviewing the scope of work. Did the integrator have to build out a network to support the system? What about coax/UTP range extension devices? Are they in a union labor heavy area? Racks, consoles, (commercial grade) displays, and many more items are unknowns currently. There are a lot of ways I could very easily get to $400k sell price with 100 cameras assuming there is more than just cameras in the quote.

What about coax/UTP range extension devices?

None are listed. The parts list is super short / generic, it says the manufacturer of the given parts but no model numbers except for one and I would suspect its missing some networking parts but that's just a guess since it's so vague.

John,

Getting an itemized list of materials and labor is always a good place to start when analyzing a bid. I have an article on my website Should You Always Take the "Low Bid"? that talks about some of the variables that could be affecting the price. My article assumes that multiple bids were received and that one was significantly lower than the others, but the same principles can be applied to this analysis.

In this particular case, I would also want to know the following:

  1. What type of specification (if any) was used to obtain the bid?
  2. Is the school a public or private entity?
  3. Is the school located in a major urban area, or in a remote/rural spot?

Michael, thanks. Have you had situations where you only got 1 bid. How do you deal with it?

They are not in a remote area so there should be plenty of integrators close enough to do this.

Yes, I have had situations where I have received only a single bid. In several cases, it was because the client had insurance, bonding, or prevailing wage requirements that were unrealistic for the size of the project. This allowed only the very largest of companies to bid on the project. In one case, my client had such a bad reputation for burning integrator's that no one in town wanted to work with them again.

When the economy is good and everyone is busy, it can also be difficult to get bids for smaller projects.

The solution is to figure out why no one wants to bid the job, and then go back and modify the requirements to hopefully fix the problem (if you can).

That is a good point Michael brings up about some agencies having bad reputations. I have been running into more contractors lately that tell me stories about no one showing up for some agencies pre-bid meetings, sometimes just because a certain person is in charge and has a history of wasting peoples time. Not saying this is the case, but I have heard of it before.

Interesting dilemma.... I think the biggest question is: Why only one bid?

Are there any obvious restrictions in the RFQ that would limit (or exclude) certain bidders?

No, they requested a specific product but that is widely available so would not block many.

I am not sure about their reputation, so I cannot comment there.

Is it possible that the project was registered and is protected by the one bidder?

Here's a wild idea: See if the school would let you contact the bidder and ask them why they think they were the only bidder. Who knows, maybe you'll get an interesting story.

Here's something you could do and you don't even have to ask the school.

Since they list a specific product, just find other dealers of that product in the immediate area and call them up - all curious like - and ask them why they didn't bid.

The answers coming from these folks might lead you closer to the truth of the matter... :)

I've been to several school bids; they often don't know exactly what they're looking for, the integrators don't know what to bid on. During walkthroughs, I have seen a lot of people drop off (including myself). In some cases, we felt that the school was so disorganized it would too much of a headache to deal with, so we backed out. I have also stayed until the end and bid high because I figured if I get this job I need to make it worth the headache.

My advice, regroup, reorganize and rebid the project. Make sure it's clear what you want, use the IPVM Camera Calculator to show those who are bidding where you want the cameras installed. Obviously, they need to be opened to different locations and integrator recommendations based on installation feasibility.

Start by getting an itemized breakdown from this integrator. Make sure the bid is well advertised, call IPVM certified sales people in the area, look up dealers on the manufacturers (and other manufacturers) website and personally invite them to the pre-bid walkthrough.

What was the basis of their budget number?

For what reason did they specify one particular product?

Kevin, I don't know the answers to those 2 points, though the effective $1,000 per camera estimate is pushing it (unless it's end to end Hikvision :)

We can generally hit the $1000 mark with Dahua or Hik, including a VMS license, but that is assuming they have the head end paid for, have an established network infrastructure, and the install location isn't a huge pain. Start adding in longer cable pulls, conduit, etc and that number goes up fast. My point is, even as efficient as we are and as cheap as Chinese products are, the $1000 per camera number is pretty low, even for Hik/Dahua levels.

they probably bid high so they dont get the job. Most likely they dont want to deal with the liability and insurance nonsense from a school and its students parents.

I ran into situations where we dropped out of a bid when I was an integrator as well. Sometimes you just know it's going to be a disaster the way it's written. I would usually communicate via RFI the things that were wrong/questions left outstanding, though.

The best thing that happens in this case is that the owner contacts integrators who picked up a bid package but did not bid and asks why. I got multiple calls like that, and they almost always resulted in a more competitive rebid.

#1 Inform the first bidder that you appreciate their efforts.

#2 Go straight to your local ADI or Anixiter or whatever and ask for the name and contact info of qualified, licensed SUBCONTRACTORS in the area that regularly buy from them. This way you will get good information on technicians that will offer you the best cost and install it the right way also (that is very important)

#3 Don't rush time is on your side, You will find a good contractor what will treat you fair and square. It very well may be that 400,00 is the cost (Not unheard of) but at least seek several proposals.

#4 Good Luck

Yes, please buy from someone who does business with Anixter, then hire us to clean up their job. We got nowhere to go but up! :)

I would also mention that the timing for the bid is bad. Contractors have all but locked in their summer work schedule typically by mid to late April. Run into this a lot especially with school projects as the timelines for completion are usually tight and contractors aren't as hungry. This is a project that they know what fit into their schedule but if they get it will figure it out because they can make money.

Also when you say things like parking lots. If they need to trench across pavement or even in turf you will add a huge cost to the project that is sometimes overlooked.

I've always thought it a common mistake for certain size jobs for them to ask the security bidder to also include campus wide infrastructure in the quote. I've always thought it more expensive for a security integrator to do that job when they don't do campus wide infrastructure all the time, because they usually end up subcontracting that part out and it adds to the cost. Better the customer figure out where they want their cameras and bid out lines run between buildings and power out to poles to a data and electrical line installer, separate from the security system. Otherwise, like I said, it adds cost when the security integrator has to sub it, or if it is a company fully equipped and staffed to do that kind of work because it's their specialty, security system proficiency is just an afterthought and ends up being the cheapest and easiest equipment and ends up being poorly supported.

I know from my perspective we STOPPED doing work for the Chicago Public Schools because of the red tape, corruption and cronyism...then the lack of payment on larger projects just created chaos...So now we do very little school work here in Chicago...The bids over 10 k here have to be done by Union shops. We got them to flip from Pelco to Panasonic for cameras long ago BUT they started with Rapid Eye for DVRs which was a disaster...Costs

were very high due to union labor and Higher end cameras and ever changing material specs. Couple that with all the political mess I can see why only a single bidder would quote a job for a Larger City school system...

Is the building ridiculous? We just completed a 109 camera project for $140k. IT wasnt fat, but it wasnt lean either. Using Exacq Z Series and a name brand american based camera manufacturer... Is there a bunch of red tape? crazy warranty or service requirements? whats the catch?

4, the main potential issue was the multiple buildings and the parking lot, though the products were similar to yours. I have not done a site survey so I can't tell how hard the install is but that was what the school suspected as being one factor.

109 for 140 Hmm? Man I hate too see that in writing the Industry is self imploding!!

yeah, original price was close to 200, we made some design changes to accommodate their budget. Not ideal margins, but profitable.

I should also disclose that client had existing infrastructure making this significantly different than a full on brand new deployment.

Must have missed that in my initial read-through.... so an additional 260k for some wireless bridges?There is still something here we are not seeing. as stated above, client reputation or some other requirements in the bid not being disclosed.

"There is still something here we are not seeing"

No wireless bridges listed, also no fiber equipment or anything special listed either.

(1) Wireless might help here. (2) This gets back to the vagueness of the one bid.

Without knowing the details on the specifications, 100 cameras could easily drive the storage requirements to 360TB and remarkably up to 1-5 Petabyte solution. This can drive the cost to an easy $100K solution just for storage alone (Assuming high quality). So $400K would not be far fetched; it is all dependent on the requirements.

They definitely want to get two more bids; in addition, request the 1st bidder to itemize the equipment and labor rates. I would highly caution this bidder if they did a bulk lump sum of the job in one price.

Billy, good points. The resolution and storage requirements were normal in this case so that is not the cause.

John, good to hear! So, in that case, I would definitely have the school request an itemized breakdown of the cost and then get a few more bids.

A single lump sum price is so you don't get your proposal piecemealed out, where the buyer decides bidder 1 has a cheaper labor rate than bidder 2, so they opt for bidder 1's labor, but bidder 2 has cheaper equipment, so they buy bidder 2's equipment. Or, they put either labor or equipment out for bid again to try and get an even cheaper price while expecting the bidder to hold to their quote for the other portion. That's nickel and dimeing and no self respecting integrator of worth would put up with it.

Well, welcome to the world of bidding! It is just unprofessional; if the potential customer wants to go do that, more power to them. It is very rare that we have seen what you are describing here in Hawaii; however, I tend to research a business before even attempting to do business with them. It works both ways, just because they are a paying customer does not mean I want to do business with them! I have ways to weed out a customer I feel that will price-meal our bid. At any rate, I would rather dish out a professional looking bid than it look like I spent only 5 minutes adding a price and calling it good.

First, did the school disclose the budget to the bidders? If so, most would just skip it since there was no way to meet the budget. Perhaps the one company didn't catch the budget part or thought they'd shoot for it if they felt nobody else was bidding.

Otherwise, was the quantity based on the bidder design or did the school specify the camera locations? I suggest they get some help with design and specification before spending any more time trying to figure out how to find another bidder. I'd bet no consultant would identify that quantity and that budget so they either guessed themselves or the bidder guessed at the number of cameras.

If they found a bidder that claims they can do the project they would probably end up spending the 100K and not getting what they expected if it didn't shut down due to costs of adds and change orders before it even finishes. 100 cameras for $100k might work for an interior only solution with good existing infrastructure but realistically I'd expect closer to $300k from what you are saying. The one bidder is actually closer than the school if most of this is outdoors.

Maybe once there is a true understanding of purpose they can obtain a design that gets closer to the objective with the budget they have instead of relying on a bidder, or, guessing themselves?

Does the bid address everything in the RFP?

A generic RFP is often met with an equally vague quote.

IMHO:

It would seem 100 cameras in a few buildings both interior and exterior with adequate storage for a school along with all the other requirements of a "public school install" could be done if:

They had specified 2.1MP HIKUA cameras and small integrated NVR's or TVI/CVI/AHD cameras located in each building.

A few Ubiquiti links could be used and it was all displayed on CMS software in a single location.

The parking lot cameras would have to be installed at the buildings and facing the parking lots.

A private school install with less regulations may have been a little less without prevailing wage, after hours work scheduling and such otherwise they might have to settle for less cameras and remove the most challenging (expensive) cameras.

No, I'm not trying to be funny.

There is just limited information and although $100,000.00 in your pocket seems like a lot of money, it's not. It didn't sound like they would accept 12 Costco kits dispersed around the facility and that would have been about $7,000.00 in parts!

in my experience with quoting jobs, i would always say to budget between $1000 - $3500 per camera for a completely installed system. (VMS, switches, servers, storage, installation etc) The lower end of that budget was for the cheap chinese stuff...

Depending on what brand was quoted, then seeing a 100 camera install for $400k is not that bad if it is a labor intensive installation.

What do we advise?

The school only received one bid. Get two other bidders and let them all know they are competing for the work. That will likely knock 100k off the bid right there.

I was wondering the same thing. How do we actually help them?

Without seeing the RFP there is not a lot I think we can do besides speculate. And speculate we have. It's entirely non-productive at this point.

Actually it sounds like the one bid came in at 4 times the budgeted amount.

Any insight on how they came up with the budgeted amount?

Is the School willing to share a redacted copy of the bid specifications? In most cases I would expect they will be rebidding this unless they get at least three bids. The Bidder's response is characterized as vague- how vague is the request for bids? Is there a performance bond required? What performance is expected?