Pregnant Snake Armpits

1 03 2011

Although I don’t appreciate talking about it, we have a black list of companies and organizations for which we will not again partner with, work with, or bid their request for proposals.  What type of activities land somebody on this list?

Companies or organizations that take our business development efforts and give it to someone else.

We are working on retro-commissioning for a major player in the Midwest grocery market.  As with most of our investment-grade studies for energy retrofit or retro-commissioning, we like to use contractors to provide us with pricing because we expect they will get the work and therefore, the pricing is going to be more accurate in addition to having accountability for the prices at implementation time.  The contractor was very reluctant to help because he was afraid he would help develop pricing and concepts and then somebody else would get the work.  I laughed out of familiarity with such shenanigans.

Unfortunately, while working on the grocer project, we were victims of just what the contractor was talking about, on a different project.  We had completed an energy study for a quasi non-profit, quasi-government outfit (Jeff, how many times do you have to get burned before you learn?) and we were moving into developing the design and provided a proposal.  We had already pretty well nailed down the scope of the project.

Inject another righteous government agency to “help” this end user.  Well, they took our developed scope of work and put out a competitive request for proposals with OUR work on it.  So now we’re faced with throwing away all the development we had already done just to be competitive with the other bidders who were handed this on a silver platter.  As I wrote last week, it’s a rainy day in hell when a government outfit takes anything but the low bid, otherwise known as the cheapest, crappiest system imaginable; one that meets only the major recognizable features, like equipment efficiency.    There are plenty of places to cut cost on the design and on the project itself.

That agency is blacklisted.

Companies that use our credentials to win a job and then dump us like a cheap date.

Last year we had “teamed” with a local architect on a LEED project for a new nearby federal facility.  I must digress for a moment.  This project was in progress when the “stimulus” was passed – you know the one that was supposed to break loose the shovel-ready projects.  If this wasn’t shovel-ready, I don’t know what was.  The plans and specifications had been lying about for year or two waiting for approval to proceed.  It drug on for months once the stimulus passed.

Come to think of it, this one too was in our hip pocket and they bid the work out again.  I’m not sure why because the design was 90% completed but I suppose some milestone had passed and federal statutes required a rebid or something.

So now that it’s competitive, once again after doing a bunch of development and front end work, we have to cut cost to beneath the cheap and crappy level.  So our client, the architect asked us to chop our down our price.  We provided a counter offer and waited.   And waited, and waited.

We already had 20 or so LEED projects under our belt compared to near zilch for the architect.  Finally, we get a hold of the scumbag, er, I mean client, and he says, oh yeah, “The good news is, we won the project.  The bad news is, you aren’t on the team.”  This is lower than a pregnant snake’s armpit.  (stolen from the aussies and modified by me).

Blacklisted.

Companies or organizations that use our proposal in attempt to beat “their” firm down in price.

This one is more difficult to nail down but let’s just say if it walks like a duck and quacks like a duck…  A large organization pursued by a bunch of consultants / contractors has been working with a provider for years and maybe they want a new or modified service, or maybe it’s just the same stuff they’ve been provided with many times.  Now they suddenly want a proposal from us.  This is either a Sarbanes Oxley corporate requirement (ok), process to actually evaluate invited bidders (ok), charade to fake a bureaucrat into thinking the chosen one was competitively selected (not ok), or a hammer to beat down the firm they know they are going to hire (not ok).  Essentially, we are wasting a bunch of our time to benefit only the buyer.  The other bidder(s) gets screwed too.

Blacklisted after a few of these – typically takes a few rounds of abuse to have this scam come into clear focus.

Wolves in sheep clothing.

Over the years we’ve been pursued by numerous companies that would like to partner with us.  It would be a marriage made in heaven.  Next step: an initial public offering on the NASDAQ!  Uh huh.  Sure.  These dirt bags just want access to our clients and for some reason, controls companies and performance contractors make up a substantial portion of this bunch.

Show me the money before I lift a finger or you are blacklisted.

A better way.

Recently a business partner stated it well, “What do we have in business and life but our reputations?”  And I always say to our company’s people, you best treat well everyone you work with in the company, our clients, and even the competition.  You never know who will one day be your client or supervisor, employee, or maybe someone you want to partner with, or get help from.

Everyone involved in business transactions should benefit – consultant, owner, utility, shareholders, and contractor.  Clearly and unfortunately, some entities think they can get ahead while screwing others and thinking they are getting a good deal or making extra profit.  Sooner or later these outfits run out of victims to exploit.  It shouldn’t be a fixed pie that everyone fights over.  It should be a pie from which everyone’s slice grows.

Tidbits

It appears Sacramento is contemplating the same fateful robbery of EE program dollars by hocking the stream of energy efficiency money.   In WI, this grab actually happened and crippled programs.  Ironically, or maybe not so, they would be both carried out under Democrat governors.

Outrage of the Week

Maybe I should start an outrage of the week?  Well here is the inaugural.  The DOE is calling it “Market-Driven Solutions” to work with behemoths like Target and Wal-Mart to develop new efficient rooftop heating and cooling units.  Is this the same Wal-Mart with $420 billion worldwide sales and $14.4 billion in annual earnings?  Chu, you have got to be kidding me.

Like General Electric, why doesn’t Wal-Mart get back to what they used to do well; innovate, rather than going to Washington with its hand out.  Time to put a “strong sell” on Wal-Mart stock.  They’re washed up.

This is a free market solution: an RFP for manufacturers of rooftop units to develop units that meet Wal-Mart’s specifications, reliably, and supply them with heating and cooling equipment for the next 100 stores.  After 100 stores, the incumbent has a huge advantage for (hopefully) proven success.

A portion of the $1.6 trillion, or as I like to say $1.6 million million, deficit is funding this kind of crap.  This wouldn’t be funny even if it weren’t true.

Oxymoron of the week: “DOE facilitates market-driven solutions”.

written by Jeffrey L. Ihnen, P.E., LEED AP





EE: LOOK and THINK!

9 02 2011
An overarching theme of the Energy Rant is that much energy policy has a feel-good foundation of fluff.  Last week I ranted about the feel-good dream of having plentiful, inexpensive renewable energy.  This will take a miracle because conventional sources are still huge and growing.  We have enough coal, natural gas, tar sands, oil shale, and offshore energy to last beyond our kids’ great grandchildren.  Of course most readers of this are champions of energy efficiency, but energy efficiency also has too much feel-good fluff.

Consider compact fluorescent lights, which despite my rant about it’s mandate a few weeks ago has been a fantastically successful development from the private sector sped along with the aid of EE programs.  That market has been pretty well transformed, especially in states with high rates and years of EE programs behind them.  Here’s the “problem” – the program has been successful.  The market is transformed.  Programs can no longer take credit for it but they don’t want to let go of the “savings”.  Well c’mon! 

This guy’s letter from the National Resources Defense Council illustrates this.  He is responding to a recent Wall Street Journal opinion piece describing the “ineffectiveness” of California CFL programs.  An independent evaluation of the program demonstrated that savings were much less than claimed.  Sounds familiar per our first hand evaluation of some similar programs.  He says the op-ed is based on a “consultant report that makes arbitrary and unsubstantiated reductions to the benefits of the compact fluorescent lamp program”.  Well if that isn’t the cat calling the kettle black.  Talk about unsubstantiated.  I’m sure there’s nothing in the report to back up its conclusions.  The guy probably hasn’t even read the executive summary.

Per our experience, this hack’s comments are unfortunately not uncommon.  Utilities, program administrators, and implementers do not want to be told their programs are saving less than they claim – as they almost always are.  I’m not sure who did the above evaluation in California but I will bet my house that they did not underestimate savings because: (1) it jibes with results we see for similar programs and (2) evaluators do not hammer savings for fun because it can lead to confrontation.  We tell it like it is; not how someone wishes it would be. 

We’ve recently completed impact (savings) evaluations for programmable thermostats; let’s just say in a state with a temperate climate – a state that has been lampooned in this rant a couple times.  A programmable thermostat is 98% a heating-energy-saving technology.  In the referenced temperate climate, where you can heat the entire house with a toaster oven, or at most your basic kitchen oven, what do you expect?  Even in states that need heating, the attributable impacts can be tiny.  Reasons for poor attributable savings include customers not using their furnaces; they were the programmable thermostat, programmable thermostats replacing programmable thermostats, and programmable thermostats in permanent override. 

Impact evaluation for residential end users is often done by billing regression, which is a sexy term for comparing the bills before implementation to the bills after implementation and making appropriate adjustments.  Consider evaluation for programmable thermostats with the only gas-using device in the home being the furnace.  Billing regression is the ONLY way to go.  Any engineering analysis is going to have much lower precision and confidence.  But noooo!  The program people didn’t like the regression results.  Can we “engineer” savings? NO! 

The other thing I’m seeing is rules changes to capture more savings.  Incentives are limited by total dollars per year per customer, minimum paybacks, and maximum percentage of measure cost.   This of course protects against free riders.  Then there is the incentive itself – how much incentive is there per kWh, kW, or therm saved?  Some utilities are greatly increasing incentives, lowering payback limits, and increasing annual payout limits.  Does this result in more attributable energy savings?  Probably not much.  Evaluations will probably show they are mainly making more projects eligible and thus claiming more savings.  I estimate free ridership will go up a lot.  Program evaluators walking into the evaluation of these “upgraded” programs should prepare for pushback and maybe a little firestorm in some cases. 

Some utilities whine to regulators that they’ve already done a great job of saving energy and all the easy stuff is gone (hence the expanded pay out and slackening rules discussed above).  I don’t buy it.  First, their 20th century programs are running low on remaining opportunity.  Could be, but there are alternatives if they AND the regulators would open up to program innovation.  Second, opportunities are created every day by engineers, architects, contractors, building owners, tenants, the milkman, janitor, cooks… you name it. 

I haven’t seen any studies yet but I would bet there is more opportunity for cost effective measures in NEW buildings – ones that are already built.  You just need to be capable of seeing the hand in front of your face and know how to “read” – i.e., understand what you are looking at.  Buildings are loaded with opportunities we find but rarely see coming out of programs.  Why?  Perhaps because in many cases there is no equipment to sell.  Examples:  grocery store has a main air handler maintaining 75F in the space and at the same time an adjacent one is struggling to maintain 70F.  The little one is cooling like crazy in the summer and pumping cold outdoor air all winter to try to get to 70F while the main unit is burning gas like crazy to make up for it.  Obviously, this is an incredible opportunity and a very simple concept.  Somebody just has to LOOK.  And THINK!  This is far more common than a congressman would ever imagine.

In another program evaluation, the administrators were whining about the difficulty of capturing gas savings even though programs are new to the state.  Good grief.  The only reason gas savings are “difficult” to capture is there is no gas lighting technology.  So as directed by the utility, I provided maybe a dozen major gas saving opportunities that apply to many facilities, I think all of which were for commercial and industrial end users.  “Oh, we are already aware of and understand these technologies and applications”, say the implementers.  Uh huh.  Sure.  And we haven’t seen any yet for some reason.  Reminds me of Cliff Claven
 
written by Jeffrey L. Ihnen, P.E., LEED AP