Vendors, Size Matters

big-dob-little-dogI find myself yet again looking for a good pool of contractors for civil works for a job in a new geography where we have no presence before. All new, very little reference, trying to understand the specifics of the new location.

One thing that stroke me was, how in the past I had to look for contractors that match the size of the job. In the past I found that if I commission a contractor that is experienced in large projects and has a big operational set up to do a small job, they will not fit. It will be either too expensive due to a big lag in overhead compared to the size of the job or they just won´t give it the proper attention due to bigger more complex jobs they have. On the other hand even worst, a small contractor with a too large of a job, usually ends up in disaster. Probably will do last minute third party contracts to make up for the small capacity and fail in delivering on time, quality or budget.

Some cases calls for a good research on vendor capacity and a careful approach as to fit the right size vendor for the right size job. I often have several pool of vendors, the ones for larger jobs and the ones for midsize jobs and, if needed, small capacity vendors. The sourcing process should include a size-match process. Take note that financial capacity and qualifications should also be consider where applicable. A vendor overqualified or under qualified, can also be an issue. Financials also should be included in a risk management assessment.

I´m not saying that a small vendor can´t do a large job or the other way around, I´m only saying that not all vendors are for all jobs and you should be aware that a size-match process should help guarantee the end result will be on time, the right quality and on budget. Sometimes we tend to put all in the same basket and fail to segregate them on capacities.

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