Saturday, July 25, 2009

Prices - up? or down? Costs - up? or down? (and Recent Bid Results)

When I was in the reprographics business full time, I made it a habit to follow government bidding activity for procurements for reprographics services. To me, the importance of following government bidding activity is that it helps one determine the "low" end of pricing action in a local market. While competitors like to keep their "lowest" prices secret (between them and their larger customers), prices bid to government agencies are easily accessible by anyone who wants to see who bid and what each bidder bid.

Understanding pricing in your market is essential (at least I think it is!)

Now that I am not working in the reprographics industry in the U.S. (I'm not permitted to do that), I only have a passing interest in government bidding activity - - - simply an interest in following the action (old habits are hard to break) - - - which means that, from time to time, I will check on who's bidding what.

In a recent competition for reprographics services for Pinellas County Schools, and this procurement supports the construction and renovation program for that county school system, there was (evidently) a heated competition for the procurement, several Tampa Bay area reprographers submitted bids. If I were still in the business in the Tampa Bay Area, I would have requested the details of each bidder's bid. But, since my interest is "light", I only took the time to look at the winning bidder's detailed bid.

Florida Reprographics (of Tampa) was the awarded vendor. Two year contract. If you want to view the detailed bid that FR submitted, go to this web address:

Florida Reprographics bid $.04 per sq ft for large-format black & white digital bond paper prints. That price was less than the successful bid the last time this same procurement was bid. And, for the previous procurement, the price that was bid was less than the successful bid 3 years before that.

As a matter of fact (this, since I know the history of this procurement pretty well), the price FR bid for large-format b/w bond prints is the same price that was bid for diazo prints (bluelines/blacklines) several years (I think about 9 years) ago.

I am SO OLD that I can remember when reprographics firms charged cheap prices for diazo blueline and blackline prints, but charged fairly high prices for large-format "digital" bond prints, that service, at that point, was considered a "premium" service.

In the reprographics marketplace and regarding unit prices for different services, what starts high always eventually comes down. I can remember when we charged $3.50 per copy for an 8 1/2 x 11 color copy. I can remember when we charged $18 per sq ft for large-format color poster prints. I can remember when we got $1.00 and $1.50, respectively, for large-format black & white xerographic plain bond and vellum copies. Heck, I can even remember when we got $4.00 per sq ft to plot b/w on mylar.

The point being is that it is a given that prices (for any individual reprographics service) always trend down over time.

On the other hand, how many of you (reprographers) have incurred price increases for plain bond paper since the recession first began to set in? The paper industry (the industry that manufactures and converts) large-format bond paper could easily be described as an "oligopoly." When only a few firms are involved in manufacturing something, prices generally increase when any one of the manufacturers announces a price increase. In other words, one starts it, then the others climb on the bandwagon. And, they all benefit.

Since the this damn recession began:
1) have your prices for large-format b/w printing services trended up or down?
2) have your paper costs (for large-format bond paper) trended up or down?

If prices (charged) are trending down and prices (paid) are trending up, that's an awful thing, especially when volumes are substantially reduced.

Thursday, July 16, 2009

And, on the "bright side"........ more GC's pursuing more jobs ...... more projects going "hard-bid"

Well, the previous post, I will admit, was a bit "gloomy", so, now, I'd like to post something that's "good news."

Several friends of mine in the reprographics industry - and friends who are knowledgeable about the GC business - are saying that, because of the recession, more GC's are pursuing more jobs than ever before. A few years ago (prior to the beginning of the bust-cycle), it was not uncommon for GC's to be selected (to do a project) by "negotiation" (between the Owner and one or few GC's) rather than be selected by "hard-bid." But, now that the construction business is down hard, and very hard in some markets in the U.S., owners are taking advantage of that by using the "hard-bid" process - the theory being that GC's are very hungry and, if there are lots of GC's bidding to do a project, the cost of that project will be less, since there will be heightened competition amongst the GC's.

So, how does this affect reprographers? Well, the more GC's who go after a project, the more sets that need to be printed (provided that CD's are not replacing printed sets!). I've heard some friends say that some projects are being pursued by tens of GC's. One friend said that one project had 40 or so GC's participating in the bid process. So, while there may be far fewer projects out for bid, the fact that more GC's are pursuing more jobs and the fact that Owners are more likely (than before) to use the"hard-bid" process, this situation hopefully brings a bit of sunshine to the reprographer community.

A Nearly "Paperless" Construction Project ? (This post also includes a list of 7 issues that may have an effect on reprographer revenues)

While doing some research, I came across an interesting article about a "paperless" construction project. Egads, a "paperless" construction project? What's that all about? The reprographics industry is in a recession because the real estate development industry is in a recession; everyone knows that. Reprographics revenues are down. Significantly, in some areas of the country.

The questions most (in the reprographics industry) are asking are; when we do see a recovery, will the reprographics industry revert (i.e., recover) to what is was before the recession began; and will the industry's revenues rebound to what they were (and beyond)?

I don't know anyone who has a working crystal ball. (If I did, I'd be buying lottery tickets with that person's help.) But, in spite of that - the impossibility of accurately predicting the future - one must at least attempt to predict what the future will be, for how else could you come up with a multi-year strategic plan for your business? ..... does it make sense to have no strategic plan?

Predicting the future (???)....

1) The article I've posted below profiles a 150+ year old Construction company that attempted (using Bluebeam software products), and, apparently completed, what they refer to as a "paperless" construction project. Does "paperless" mean "no printing?" Or, if it did not mean "no printing," was printing substantially reduced? If either was the case, then why would a reprographer promote and sell Bluebeam software products? (Visit Kal Blue's web-site, as an example of one reprographer promoting and selling Bluebeam products.)

2) What negative effect, if any, will the "wide-spread" use of BIM have on the reprographics business? I posted an extensive article, recently, about that subject. It will take years before BIM becomes standard practice in the A/E/C community. It is likely, given the advantages a GC could have if a GC uses a BIM model during the precon/estimating process and, afterwards, during construction, that GC's will embrace BIM before most A/E firms do. But, when BIM technology is in wide-spread use, will not that eliminate the need for substantial quantities of prints for GC's and their subs? Will not they use the "database" within BIM to do estimating?

3) What negative effect, if any, are "on-screen" / "on-line" computer estimating processes having, or will they in the future have, on reprographics? Are customers ordering fewer printed sets of plans because of computer estimating capabilities? Will this trend continue; will this trend increase in pace?

4) In the past, reprographers got orders to print sets of "plans and specs". And, in the reprographics industry's heyday, lots of orders for lots of printed sets. Nowadays, some GC's (and others) are ordering and distributing plans and specs on CD's instead of ordering and distributing plans and specs in hard-copy (i.e., printed.) What negative effect, if any, has this transition had on reprographer revenues?

5) Some A/E and GC customers are apparently inclined to distribute "files" (containing plans and specs) directly to project participants. For those firms who handle their project documents in that manner, they are no longer the "single source" of a "mass print order." What would have been a "mass print order" becomes a series of smaller orders from the individual firms who received a set of files, provided that the individual firms need hard-copy prints. What negative effect, if any, does this manner of document distribution have on reprographers.

6) Electronic Permitting? - The City of Atlanta recently initiated an end-to-end digital plan submission process through ProjectDox ePlan software (referred to on the City's web-site as ePlans.) "Atlanta is one of the first cities in the Southeast to implement a complete online solution for construction and land-use plan approval, in what is to become a nation-wide technology standard for building and planning departments." Firms who apply for permits submit files, rather than submitted printed sets of plans. What effect will this type of business model have on reprographers?

7) And, finally (at least this is all I can come up with for now), what will happen, "reprographically speaking", if and when flexible, portable, large-screen displays are used to review plans instead of printed plans being distributed? (This relates to an earlier post I did about technology like the Amazon Kindle reader.)

So, what have I missed? Am I way off base, on base?

I invite those who read this article to post their thoughts ("comments") on this subject - "what factors are going to negatively or positively influence the future of reprographics revenues?"

Okay, here's the article about the "paperless" construction project:

William A. Berry & Son Announces Paperless Construction Project Results
— Bluebeam PDF Revu used to eliminate 42,000 pages of paper and 1,557 lbs of CO2
Pasadena, CA (June 16, 2009)

Today, construction management firm William A. Berry & Son, Inc. (Berry) announced impressive results in its quest for a paperless project. Using Bluebeam PDF Revu, Berry, project architect Perkins+Will and all sub-contractors electronically redlined over 42,000 pages of construction documents in PDF – making the project almost completely paperless. By reviewing these documents electronically, the team reduced the project’s carbon footprint by 1,557 lbs of CO2. Based on this exceptional achievement in sustainable communication, Berry is applying for a LEED Innovation & Design Credit from the United States Green Building Council (USGBC).

Berry achieved this milestone by deploying Bluebeam PDF Revu, a PDF creation, markup and editing solution, to the entire project team working on the Overlook Center. Berry managed the core and shell construction, and is currently managing the fit out of this 100,000 square foot building in Waltham, MA.

Developed by Bluebeam Software, Revu was selected due to its specialized features for architecture, engineering and construction (AEC) professionals. Unlike other redlining tools, Bluebeam PDF Revu includes industry standard markups and takeoffs, an exclusive Tool Chest for storing custom annotations, a drawing comparison feature, integrated tracking and tablet PC compatibility. Combined, these features enabled all project documents –submittals, RFIs, punch lists and more – to be reviewed and redlined in a light-weight, universal file format. “Bluebeam was instrumental in helping us review and respond to project documents electronically,” said Jay Bradley, Project Manager at Perkins+Will. “We found that Bluebeam was an essential part of streamlining and simplifying the construction administration process. The inherent simplicity of utilizing Bluebeam
technology was key in helping achieve a cost effective, time sensitive, and sustainable solution to our daily work output.”
To ensure project-wide adoption, Berry and Bluebeam collaborated to train its staff, the Perkins+Will architectural team and sub-contractors on best practices for PDF markup and editing. As a result, Berry created a blueprint for paperless workflows that is being replicated on all of its future projects. “Bluebeam PDF Revu helped us transform the way we manage project communication and its unique tools for AEC allowed us to design an electronic workflow that is scalable,” said Jake Chace, Senior Project Manager at William A. Berry & Son. “We’re already using this process on current green building projects to
eliminate paper usage and distribution, and hope that the example we’ve set will be recognized by the USGBC.”
“The paperless project has been the holy grail of the construction industry,” said Richard Lee, CEO of Bluebeam Software. “Berry has proven that it is possible to go virtually paperless and engineer an electronic workflow that can be duplicated using Bluebeam technology. By recognizing paperless workflows in the LEED standard, the USGBC can incentivize green builders to follow Berry’s lead in process sustainability, and affect real and significant change industry wide. Using Berry's results as an example, we estimate that the USGBC would be responsible for the reduction of over 25 million tons of CO2 emissions annually.”

Berry has submitted a LEED Silver application for the Overlook project and is currently awaiting notification from the USGBC.
About William A. Berry & Son, Inc. Founded in 1857, William A. Berry & Son, Inc. is one of the nation’s oldest construction companies. A top-ranked construction management firm by such leading publications as ENR, Building Design & Construction and Modern Healthcare, Berry has an extraordinary portfolio of institutional and corporate construction projects throughout the Northeast.