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How to Select a Paint System Contractor-Part I

CraigLawrence

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.

 

PREPARING  SPECIFICATIONS

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

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.

 

Product

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.

 

Production

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).

 

Paint

The third “P” stands for the type of paint to be used as determined by the performance requirements of the product.

 

Process  

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.

 

Plant

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.

 

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:

 

Technical Specifications

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.

 

General Specifications

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

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.

 

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.

 

Administrative Specifications

Administrative specifications cover a wide variety of issues including Insurance, Documentation, Taxes, Change Orders, Legal, Performance Related and Project Management Related.

 

Insurance 

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:

 

Documentation

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.

 

Taxes

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

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.

 

Legal Issues

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:

 

Performance-related issues

The specifications should include language that sets the minimum requirements for the following performance related issues:

 

Project Management Issues

Similar to the legal issues, there is standard language for these specifications from CSI or AIA.

 

EVALUATING BIDS

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.

 

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.

 

Biography

 

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.

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