HOW TO SELECT A PAINT SYSTEM CONTRACTOR-PART I
By Chris Herr, HERR Industrial, Inc.
This two-part series is a guide for manufacturers and custom coaters on how to select a contractor to supply and install a powder coat system. Part I covers preparing specifications and evaluating bids. Part II will cover qualifying bids from contractors. The article lists information the owner should provide to the contractor and the contractor should provide to the owner, to get the most suitable powder coat system for the application.
Preparation of detailed specifications for a system may seem complicated and cumbersome, however, the specifications help assure a certain level of workmanship will be provided and that an “apples to apples” comparison between bidders will be easier. The specifications also establish the background and minimum requirements for the system and will be included in the eventual contract documents. The specifications should be concise, clear, easily understood by everyone and applicable to the project.
Specifications for the bid package can be divided into four basic sections; however, the specifications can be altered in any fashion to meet the specific project scope.
- Scope of Work
- Instructions to Bidders
- Technical Specifications
- General Specifications
Scope of Work
The Scope of Work should serve as the introduction to the project and provide the contractor with the goals and background for the project as well as a general description of the equipment and services the contractor is required to supply. The scope should also explain the project goals and develop the design basis for the system. The design basis is illustrated by what we call the “5-P’s”, Product, Production, Paint, Process and Plant. When establishing the values for the “5 P’s”, the existing operations should be examined but flexibility must be included to allow expansion and adaptation to future changes.
A full description of the product(s) to be painted should be provided to the paint system contractor. The information should include dimensions of not only the largest part but also as many of the parts as information is available for. The material handling (i.e. hanging) arrangement will dictate the length, width (perpendicular to conveyor travel) and height of the part. The material handling arrangement is determined by the part morphology with respect to product balance and presentation to the process, e.g., exposure to washer nozzles, paint guns, infra-red emitters or blasting equipment and minimizing water carrying or, conversely, air entrapment with dip processes. The part size is one third of the determining factor of the eventual equipment size and will dictate parameters that include but are not limited to; product centers (part density), conveyor turn radius, opening dimensions, number of nozzles in the washer, washer drain lengths, clearances with the oven(s), paint booth size and resulting air flow, etc. Answers to the following questions should be prepared related to the product description.
- What are the dimensions for the largest to smallest parts?
- How much do the parts weigh?
- Will the parts be handled individually or collectively on a rack or in a basket?
- Are catalog cut sheets or shop drawings available to include in the specifications?
- Does the part morphology present concerns for the process?
Production rates are based upon the part quantity, weight, and/or area per some time period such as an hour, shift, day, etc. The production rate is the second third factor determining the equipment size by combining the process time required. In a conveyorized system, the production rate multiplied by the product centers will provide the conveyor speed (feet per minute).
- How many parts are produced per hour/day/week/year?
- How many hours are worked per day, week, year?
- What is the production rate in pounds per hour? Square feet per hour?
- Is the production rate uniform with respect to time or must it be done in batches to meet other manufacturing or shipping processes?
The third “P” stands for the type of paint to be used as determined by the performance requirements of the product.
- What type of paint will be used to meet the performance requirements?
- Does the entire part need to be coated?
- Are all surfaces the same classification, e.g., A, B, C?
- What are the salt spray, cross-hatch adhesion, hardness, gloss or other performance requirements?
- What is the coating thickness?
- Is the paint thickness for coverage only or does it have functional aspects?
- How many colors and, if multiple colors, how often will the colors be changed?
- What is the estimated paint application rate, e.g. gallons per hour, etc.?
The coating processes, or fourth “P”, are the steps required to successfully meet the paint performance requirements. The process is typically determined jointly by the owner and suppliers for paint, chemicals and equipment and identifies the times, temperatures, humidity and other conditions that must be met. Although the process can be widely varied, it typically includes but is not limited to, chemical and/or physical treatment of the product surface to clean it and create a profile to enhance paint adhesion, drying, paint application, curing, cooling, pollution abatement, etc. The process times is the third factor that in concert with the production rate and product determine the equipment size, the system layout and eventually the cost.
- What is the surface preparation process?
- Is drying required?
- Is pre-heating or de-gassing required?
- How is the powder applied?
- What are the special application conditions. e.g. temperature, humidity, etc.
- How quickly should the product transfer from application to cure?
The fifth and final “P” is the plant or physical area that will be utilized to house the system. This information must be gathered and transferred to the contractor to determine a system layout and configure the equipment as well as plan the specifics of system installation.
- What utilities (gas, electric, compressed air, water, steam, sewer, etc.) are available for the system and what are the ratings and locations?
- What is the clear height from the floor to the ceiling available? What obstructions are present?
- What floor area is available for the system?
- Are there up to date and scalable building and property drawings available?
- Where is the product flow coming from and where is it going to after the paint system?
- Can equipment be placed on the roof or outside the building?
- How are the roof and walls constructed? Does a roofing company bond the roof? How must openings be constructed?
- Can the building frame support equipment, e.g. conveyor, air houses, ovens, etc.?
- How is the floor constructed? Can pits be constructed?
- What insurance requirements must be met for the system, e.g. FM, IRI, etc.
- What type of fire protection is required? Are there firewalls present that may need to be breached?
- What are the air and wastewater discharge requirements?
- Is there clear access to the system site? What size are the doors and aisles? Are there ramps or docks?
- Must the system be protected from adjacent processes or segregated to protect the adjacent processes?
Instructions to Bidders
The instructions to bidders simply answers the “who, where, when, and how” the bids should be prepared to permit you as the owner to ensure that you can see if they meet the scope of work and can compare between proposals. The instructions should include the following:
- Who should be contacted? What is their mailing address, e-mail, phone, fax, etc.?
- How should the bid be formatted or structured?
- How much detail should be provided?
- How should pricing should be itemized and presented?
- How many copies should be submitted?
- How should “exceptions to the bid” be presented? We recommend that the bidders follow the specifications but offer exceptions that can result in process improvement or cost savings. All exceptions should be clearly and separately listed.
- What is the schedule for site visits, bid meetings, bid due date, etc.?
- How are questions to be handled, addenda incorporated, bids withdrawn, etc.?
- What are the requirements for information confidentiality and instructions for the use and return of drawings, specifications, design information, etc?
- How should arrangements be made for a site investigation? We highly recommend a requirement for a site visit by the contractor’s project management and/or installation personnel.
The technical specifications provide the information on the specific equipment to be incorporated into the system. They should be detailed to the process requirements but general enough to allow suppliers to provide their standard designs and work methods. Doing so shifts some of the liability for the design and workmanship to the “experts” supplying the equipment. For example, a pump for a spray washer should be specified as a “vertical style, stainless steel pump rated to provide 20 psi at a flow rate that will turn the tank over 3 times per minute” rather than calling out the pump as a “4 x 5 x 10 SEL pump with a 10 hp”. The pump selection may be correct based upon the owner’s understanding of a sizing formula that incorporates the stage length, number of nozzles, nozzle selection, etc. but it may not compensate properly for the dynamic head involved with the specific vendor design and known only to the vendor. If the resulting flow is inadequate, the owner has now assumed the design liability.
The following list of questions illustrates the general areas of information that will be necessary to gather with respect to the equipment. The list is far from all-inclusive and is applicable to the common types of finishing equipment used today. When developing the specifications, detailed information should be sought first from the paint and chemical suppliers, some of which have design guidelines, and secondly from texts and leaflets available through professional societies or consultants servicing the powder coating industry. Professional societies include the Powder Coating Institute (PCI), the Society of Manufacturing Engineers (SME), and the Chemical Coaters Association International (CCAI).
If experienced, the owner’s own maintenance, manufacturing, engineering and operational personnel are a valuable and key source of information and should be consulted for input into the specific requirements.
- What process goals must be met by the equipment, e.g., production rate, surface preparation, dryness, degree of cure, paint performance, quickness of color change, air or water turnovers, etc.?
- What performance goals must the equipment achieve, e.g. time, temperature, humidity, pressure, air or water flow, degree of filtration, paint application, dB, foot-candles, conductivity, speed, cleanliness, etc.?
- What are the minimum recommended mechanical operating design criteria required to meet the process goals, optimum performance and equipment longevity?
- How will the equipment operate, e.g., automatic, manual, continuous flow, batch, etc.?
- What materials of construction should be used i.e. for frames, housings, enclosures, piping, mechanical components, etc.?
- What are the recommended minimum design dimensions?
- What type and level of control is desired and how will equipment be interlocked?
- What type of v access and illumination is required?
- How is the equipment to be maintained and what features aid maintenance?
- How much does it cost to operate the equipment? What energy saving features are recommended?
- What codes must the equipment adhere to?
- What optional and ancillary equipment shall be included?
- Is testing with actual parts required or recommended?
- What safety and environmental measures must be included? Are permits required?
- What energy source and other building utilities are required and in what amounts?
- How is the equipment cleaned and what features aid cleaning?
- What ambient or background conditions must be identified, e.g. average annual temperature, relative humidity, etc.?
General specifications, as the name implies, are more general in nature and can apply to almost any capital project undertaken by the owner. They include
- Owner-Specific Specifications
- Workmanship and Material Specifications
- Administrative Specifications.
These specifications are specific to the plant where the paint system is to be installed and may exist as corporate-wide specifications for companies with multiple plants. Generally prepared by facilities or maintenance personnel, these specifications allow very little leeway with regard to methods and materials. They are important to maintain similarity between manufacturing equipment and enable greater familiarity and faster response with respect to repair and replacement as well as common spare parts inventory. The owner-specific specifications also cover on-site contractor safety rules, identify temporary utilities and facilities for installation crews, material delivery and storage instructions as well as what equipment may be supplied by the owner.
- What preferred equipment brand names should be used, e.g. motors, controls, solenoid switches, etc.?
- What specific practices are in place for installation of electrical, controls, piping, pneumatics and hydraulics?
- Is an MSDS or other technical data sheet required for contractor materials to be brought on site?
- What policies are in effect with regard to security, emergencies, smoking, restricted areas, alcohol and drugs, storms, etc.?
- What personal protection equipment is required for such as eye protection, fall protection, etc.?
- Are there policies for equipment operation such as lift trucks, scissors lifts, ladders, etc.?
- What policies are in effect regarding lockout/tag out, burn permits, confined space entry, use of barricades, signage and asbestos identification?
- How should hazardous material be handled and disposed of?
- What safety training, inspections and certifications are required?
- What temporary facilities are available for electrical, air, break, toilet, etc.?
- How and where should material be shipped, offloaded, stored and protected during installation?
- What equipment the owner will supply?
Workmanship and Material Specifications
Like the technical specifications, these specifications cover minimum requirements for material and workmanship but are more general in nature than the technical specifications and can apply to a range of equipment. Standard specifications for many areas of work are available from groups such as Construction Specifications Institute (CSI) and the American Institute of Architects (AIA) and can be used as applicable to the project.
- Are there requirements for standard specifications for work involving Civil, Mechanical, Electrical, Painting, Piping, Excavation, Structural Steel, Sprinklers or other work?
- Should all materials be new or can they be used?
Administrative specifications cover a wide variety of issues including Insurance, Documentation, Taxes, Change Orders, Legal, Performance Related and Project Management Related.
If proof of insurance was not collected during contractor qualification, insurance certificates should accompany the contractor’s proposal or, in the very least, be provided prior to beginning work. The owner’s insurance officer or underwriter should be consulted regarding the types and limits of insurance required of the contractor. Although there is no set formula to determine the policy type and amounts, the policies should be required based upon a project-by-project evaluation of relative risk. The following questions illustrate the most common types of policies and amounts associated with installation of a paint system project:
- What Comprehensive General Liability insurance should be carried?
- What limits of Automotive Liability are required?
- What limit of Worker’s Compensation is required?
- What other miscellaneous insurance policies required, such as builder’s risk, etc.?
Project documentation specifications identify the drawings, catalog cut sheets, and operations and maintenance (O&M) manuals that are expected, how they should be formatted and in what language. Requirements should also be included for the O&M manual to include start-up/shutdown/operating instructions, component literature, spare parts list, troubleshooting guidelines, maintenance information and schedules as well as safety information.
Sales and use taxes for manufacturing are a complex issue and vary project-by-project and state-by-state. Most states hold manufacturing activities as tax exempt but not all have the same definition as to when the manufacturing activity starts and stops. Many states consider only that equipment that imparts a discernable physical change to the product during the manufacturing process as exempt. In some states, pollution abatement is considered part of the process and consequently tax exempt, in other states pollution abatement such as wastewater treatment is not tax exempt. The specification writer should check with their accounting department for a definitive answer and not rely solely on the supplier to determine if tax is due. For example, in Pennsylvania, manufacturers are exempt on purchases of property that will be incorporated into the product and materials and supplies directly used to produce the product. These items must have a direct causal relationship to the manufacturing process. Pre-production, post-production, and administrative items are not exempt under the manufacturing exemption. Useful websites that provide state by state listing of taxes can be found at http://www.taxsites.com/state.html#links or http://www.taxadmin.org/fta/rate/sales.html.
Change orders are used to document changes to the contracted project scope and its impact on the project cost and schedule. The specifications should include a clause that requires change orders to be prepared in a timely fashion and not put into effect without written approval of the owner.
The owner should consult their attorney for specifications that address various legal issues including the questions listed below. Standard language for these specifications is available from organizations such as CSI and AIA:
- Is their information that the owner considers confidential and not to be disclosed?
- When does the transfer of title occur with the equipment and how does this affect insurance and warranty issues?
- What state will the applicable law be exercised?
- Will any patents be infringed and if so who will be responsible?
- Is there a requirement for the contractor to provide a lien waiver?
- Under what conditions can the project be terminated, e.g. by the Owner, by Force Majeure and/or the Contractor?
- Will there be liquidated damages or other penalties or charges for late shipment?
The specifications should include language that sets the minimum requirements for the following performance related issues:
- How much and what types of training will be required?
- What are the minimum warranty requirements the owner will accept?
- What after sale service will be required?
- Is a performance bond required and how much, e.g., on the entire project amount or installation amount only?
- How many years should spare parts be available?
- What specific tests will be required to gain acceptance of the system? Acceptance should typically include evaluation that the equipment meets all stated operating levels (e.g. cfm, gpm, temperature, RH, fpm, etc), the product clears all obstructions as it travels through the system, all interlocks and safety controls work, etc.
Project Management Issues
Similar to the legal issues, there is standard language for these specifications from CSI or AIA.
- What is the delivery schedule and how shall it be presented and updated?
- What are the payment terms and payment schedule? The payment schedule should be tied to project milestones such as completion of engineering, delivery of equipment, completion of installation, start-up.
- What policies are in effect with regard to duty to inform, subcontracting, workmanship and code compliance (Occupational Safety and Health Administration [OSHA], National Electric Code [NEC], National Fire Protection Association [NFPA]), union or non-union labor, labor clause (says contractor will supply all labor), licenses and permits, inspection and testing, and progress meetings, and so on?
The best way to compare and evaluate bids is to construct a “Comparison Spreadsheet” listing pertinent and important parameters from the specifications in one column and the contractor-specific information in adjacent columns. The spreadsheet can be sent digitally to the individual contractors for completion and when returned, compiled into one master sheet, which easily compares the three bids. The spreadsheet should be as detailed as possible and can typically be up ten to fifteen pages long.
- Does the project scope meet the specifications?
- Do the production-related parameters meet the specifications, e.g., pieces per hour, square feet per minute, pounds per hour, etc.?
- Do the process-related parameters meet the specifications e.g., turnovers, temperature, time, etc.?
- For all the process equipment, do the design-related parameters meet the specifications and how do they compare to the other contractors for, e.g. features, material type and thickness, dimensions, quantity, access, etc.?
- What are the equipment component ratings and how do they compare between contractors, e.g., hp, cfm, gpm, BTUs, psi, size, tdh, rpm, manufacturer, fpm, etc.?
- How much training is provided?
- Who designs, fabricates, installs and services the equipment?
- What is the itemized price breakdown?
- What are estimated operating costs?
- What codes are adhered to?
AWARDING the CONTRACT
The selection of a contractor should be based upon provision of the greatest value, not the least cost. The cost of potential production shutdowns for repairs should be factored heavily when considering supplier selection. Extended periods can lead to expensive production delays; it is important to do it right the first time. If the specifications have been properly constructed, the resulting price range should be close. If the least cost bid, especially if far below the other contractors, may indicate an “under bid” and pose the potential that the contractor will try to make-up costs during the course of the project by cutting corners. The comparison spreadsheet will easily point out differences but cannot be simply relied upon to show the best value. Detailed analysis of the differences is required and follow-up questioning of the contractor(s) is recommended. For example, if one contractor’s washer pumps are larger than another, it can mean a better value with built-in flexibility or it could mean that the particular piping design is not as efficient as the next contractor’s and requires a larger size to overcome dynamic head.
The final contract should summarize the scope of work; identify the involved parties and contacts; identify the project name and location; reference all the pertinent documents; and, list the cost, payment schedule and project schedule. Dated signature lines should be provided for principals from each organization. Pertinent documents include such as the specifications, as described above, the contractor’s proposal and drawings, and any other documents or terms and conditions that may be pertinent to the project should be attached as appendices.
Contracts are drafted to allocate responsibilities, set standards and identify remedies between the parties. The allocation is based upon the simple fact that someone must pay for all elements of the project. The contract should be fair and constructed to provide and encourage a “win-win” philosophy between the owner and contractor. It is in the owner’s best interest to keep the supplier viable to insure future upgrade capability, on-going service and availability of spare parts. Unreasonable or unfair contracts that attempt to assign all the project risks from the owner to the contractor merely raise the probability of change orders and disputes. Disruptions and disputes on a construction project are expensive to all involved and if it proceeds to court will be before an American legal system that is slanted against the drafters of unfair contracts. Disputes can be avoided or minimized by early recognition of the problem, good communication between the owner and contractor, accurate definition and documentation of the problem, fair assessment of the cost and schedule impacts and agreement to work together to reach an equitable solution.
Proper planning, dedicated information gathering, thorough investigation of suppliers, diligent documentation and a commitment to establishing a “win-win”, team-supported environment will spell success to meet the finishing goals.
Chris Herr is the Sales Manager for Herr Industrial, Inc., an industrial paint systems house and mechanical contractor located in Lancaster, Pennsylvania. Prior to beginning work at Herr in 1992 as an application engineer, Chris spent 15 years in the environmental science and research fields and holds a B.S. degree from the College of FWR at the University of Idaho. Chris became the Product Line Manager for finishing systems at Herr in 1996 and is responsible to oversee sales, conceptual designs, and estimating. He is a member of SME, CCAI and the Electrocoat Association.