Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages Description/Paper Instructions
Camden Construction Corporation Case Study
“For five years, I’ve heard nothing but flimsy excuses from you people as to why the competition was beating us out in the downtown industrial building construc-tion business,” remarked Joseph Camden, president. “Excuses, excuses, excuses; that’s all I ever hear! Only 15 percent of our business over the past five years has been in this area, and virtually all of that was with our established customers. Our growth rate is terrible. Everyone seems to just barely outbid us. Maybe our bidding process leaves something to be desired. If you three vice presidents don’t come up with the answers, then we’ll have three positions to fill by midyear
“We have a proposal request coming in next week, and I want to win it. Do you guys understand that?”
BACKGROUND
Camden Construction Corporation matured from a $1 million to a $26 mil-lion construction company between 1989 and 1999. Camden’s strength was in its ability to work well with the customer. Its reputation for quality work far exceeded the local competitor’s reputation. Camden’s business grew rapidly for the next decade.
Most of Camden’s contracts were with long-time customers who were will-ing to go sole-source procurement and pay the extra price for quality and service. With the economic downturn in 2008, Camden found that, unless it penetrated the competitive bidding market, its business base would decline.
In 2010, Camden was “forced” to go union in order to bid government pro-jects. Unionization drastically reduced Camden’s profit margin but offered a greater promise for increased business. Camden had avoided the major downtown industrial construction market. But with the availability of multimillion-dollar skyscraper projects, Camden wanted its share of the pot of gold at the base of the rainbow.
MEETING OF THE MINDS
On January 17, 2011, the three vice presidents met to consider ways of improving Camden’s bidding technique.
V.P. finance: “You know, fellas, I hate to say it, but we haven’t done a good job in developing a bid. I don’t think that we’ve been paying enough attention to the competition. Now’s the time to begin.”
V.P. operations: “What we really need is a list of who our competitors have been on each project over the last five years. Perhaps we can find some bidding trends.”
V.P. engineering: “I think the big number we need is to find out the overhead rates of each of the companies. After all, union contracts specify the rate at which the employees will work. Therefore, except for the engineering design packages, all of the companies should be almost identical in direct labor man-hours and union labor wages for similar jobs.”
V.P. finance: “I think I can hunt down past bids by our competitors. Many of them are in public records. That’ll get us started.”
V.P. operations: “What good will it do? The past is past. Why not just look toward the future?”
V.P. finance: “What we want to do is to maximize our chances for success and maximize profits at the same time. Unfortunately, we can’t do both of these things at the same time. We must find a compromise.”
V.P. engineering: “Do you think that the competition looks at our past bids?”
V.P. finance: “They’re stupid if they don’t. What we have to do is to determine their target profit and target cost. I know many of the competitors personally and have a good feel for what their target profits are. We’ll have to assume that their target direct costs equals ours; otherwise we will have a difficult time making a comparison.”
V.P. engineering: “What can we do to help you?”
Finance: “You’ll have to tell me how long it takes to develop the engineering design packages, and how our personnel in engineering design stack up against the competition’s salary structure. See if you can make some contacts and find out how much money the competition put into some of their proposals for engineering design activities. That’ll be a big help.
“We’ll also need good estimates from engineering and operations for this new project we’re suppose to bid. Let me pull my data together, and we’ll meet again in two days, if that’s all right with you two.”
REVIEWING THE DATA
The executives met two days later to review the data. The vice president for finance presented the data on the three most likely competitors. (See Table I.) These com-panies were Ajax, Acme, and Pioneer. The vice president for finance said:
In 2003, Acme was contract-rich and had a difficult time staffing all of its pro-jects. In 2000, Pioneer was in danger of bankruptcy. It was estimated that it needed to win one or two in order to hold its organization together.
Two of the 2002 companies were probably buy-ins based on the potential for follow-on work. The 2004 contract was for an advanced state-of-the-art project. It is estimated that Ajax bought in so that it could break into a new field.
Table I Proposal data summary (cost in 10s of 1,000s, US$)
Year Acme Ajax Pioneer Camden Bid Camden Cost
2000 270 244 260 283 260
2000 260 250 233 243 220
2000 355 340 280 355 300
2001 836 830 838 866 800
2001 300 288 286 281 240
2001 570 560 540 547 500
2002 240* 375 378 362 322
2002 100* 190 180 188 160
2002 880 874 883 866 800
2003 410 318 320 312 280
2003 220 170 182 175 151
2004 400 300 307 316 283
2004 408 300* 433 449 400
2005 338 330 342 333 300
2005 817 808 800 811 700
2005 886 884 880 904 800
2006 384 385 380 376 325
2006 140 148 158 153 130
2007 197 193 188 200 165
2007 750 763 760 744 640
*Buy-in contracts
The vice presidents for engineering and operations presented data indicating that the total project cost (fully burdened) was approximately $5 million. “Well,” thought the vice president of finance, “I wonder what we should bid so it we will have at least a reasonable chance of winning the contract.”
QUESTIONS
How hungry are the competitors?
How hungry are we?
What has been the bidding history of the competitors?
What has been our bidding history?
How do we compare to the other competitors cost-wise?
How do we compare to the other competitors technology-wise?
RUBRIC
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. 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