From Outsider to Partner: A Win-Win Strategy

A little more than five years ago, I began my career with PennWell as a magazine editor after working nearly 14 years for an investor-owned utility. I spent the last eight years at the utility as a contract administrator. Part of my responsibility in that position was to evaluate bids and help project managers select successful bidders. One of my main objectives was to determine which contractor would complete the work or furnish the goods for the least cost. I looked at the bottom line and gave little thought to developing a long-term relationship with the contractor.

It wasn’t until my last couple of years at the utility that any of us ever considered our outside contractors to be more than just that-outsiders. While most contractors were not really considered adversaries, they weren’t really considered allies either. Most of the time they were considered “necessary evils” that had to be monitored closely to ensure they fulfilled their contractual obligations within a given time frame and dollar amount. Once the contract was awarded, it was up to the contractor to meet the requirements, with or without our help.

Don’t get me wrong, most of the time our working relationships with our contractors were good. We certainly did not mistreat them or mistrust them. In turn, our contractors were good to us and treated us fairly. I can assuredly say that the utility would not have been able to fulfill its obligations and serve its customers without the help of some very good contractors. However, it was understood that while contractors had a place in the organization, they were still outsiders.

My, how things have changed! In this issue, you’ll find two articles that illustrate just how much relationships between utilities and contractors have changed in the past few years. At many utilities, contractors are no longer seen as outsiders, but as partners working toward the same goals as the utility. I believe contractor relationships like those that have been developed at Detroit Edison and Carolina Power & Light are becoming the norm rather than the exception. When you read the articles, you’ll see that at both of these utilities, the contracts of days past were superceded by mutually beneficial agreements that foster a true partnership between the utility and the contractor, or utility partner.

The economic environment in which utilities find themselves today requires them to succeed at most every endeavor, or else risk losing customers and shareholders. Today when a contractor is selected and an agreement entered into, the utility understands that if it is to succeed, it must make sure the contractors with which it is working succeed. The same holds true for contractors. They must do more than simply deliver a product or service for a given price. Contractors must work with the utility to deliver the products and services that will make that utility successful. Often this means the contractor must help the utility determine what products or services are needed.

The articles in this issue clearly illustrate that neither the utility nor the contractor would have been nearly as successful without the other’s input and help. The strong alliances described in the two articles are good examples of how working together can create a win-win strategy.

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