January 23, 2009

“Wait a minute.  They may fail but look how much money we’ll save.”

One of our early space pioneers, Alan Shepard, was asked by reporters what he thought as he sat atop the Mercury-Redstone 3 (Freedom 7) rocket just moments prior to lift-off.  He replied that his mind was centered on the fact “that every part of this ship was built by the low bidder”.  Fortunately, Shepard was successful in becoming America’s first human in space and lived to share his thoughts.

Unfortunately, many other projects have been destined for failure by the overwhelming urge to save money at all costs.  While I am a great advocate of competition and of driving costs down wherever and whenever possible, I’ve also experienced (like you) the pain that results from getting exactly what I paid for.  In the case of the low bidder, it can sometimes be not much.

One of the classic examples of the low cost attitude came during an evaluation of vendors on an extremely important project.  As we evaluated the bids, it quickly became apparent that one of the companies in the running displayed very little understanding of the work.  Their bid was almost two times less than the next closest competitor.  Just as we were collectively ready to eliminate them from the deal, one of the evaluators said, “Wait a minute.  They may fail but look how much money we’ll save.”

Amazingly, there are some who carry this attitude.  Ultimately, we know that cost can’t be measured until a project is successful.