I hear about bad things that happen at businesses all the time. Often those things are dismissed as “stuff happens” or “we all make mistakes”. Often these big boo boos are attributed to Murphy’s Law.
Here is a tale with no apparent easy fix.
There’s a big construction project worth a few million dollars. You’re in charge of preparing the bid. You go over and over and over the numbers. This project has over 3,000 components from parts to contract labor. Low bid will win. It’s tight.
Whooooo hoooooooo you got the deal!
Then, going through the numbers you discover the boooo booo. There’s a $2.95 part that should have been $295. Worse yet, this project requires 200 of these things. That’s a $58,000 error. You’ve got a contract, you’ll have to eat it.
What happened?
- The bid was checked and cross checked by multiple eyeballs.
- This particular item had not been used before so it wasn’t on the company price list or “in the system”
- Everyone is very busy
- The bid prep was a rush
Side note. I cringe when I see team building games that involve making bridges out of rope or buildings out of cards or falling down with your eyes closed. None of those things address real business problems like this one.
So tell me, how can we prevent this sort of error from happening again?
(There are many ways)
Chris Reich
TeachU.com
PS—This happens often. This particular case involved concrete. The estimator had not worked with concrete and did not know how to calculate a cubic yard—he used square yards. Oooops.