The True Cost of Utility Damage Prevention
What is the true cost of utility damage prevention? Contrary to conventional wisdom, it’s far more than the simple price paid to contract with the lowest-bidding utility locating firm. In fact, attempting to contain damage prevention costs by negotiating the lowest locating price can greatly increase the company’s exposure to other risks that in the end will prove far more costly.
What Drives Total Cost?
Would you rather pay for good insurance or a bad accident? Choosing a utility damage prevention partner is not unlike choosing a property insurance policy. Having the correct coverage is all important, the decision MUST not be solely cost based, but rather who will provide the safest solution for your needs.
You get what you pay for.
Difficult competitive bidding situations have resulted in some locating companies offering rates that fail to cover the cost of providing safe, reliable, and accurate service. That cost is more than direct labour cost (which includes recruiting, training, and staff retention). Locating rates paid to utility locating companies must also support:
- Equipment Purchases,
- Vehicle Acquisition and Maintenance,
- Communications Equipment,
- Cost of business (including repairs and maintenance, insurances, wages, advertising, taxes, administration costs, rents, utilities ect.),
- Staff Quality Assurance and most importantly Training
When locating rates are squeezed, locating companies are forced to underinvest in these areas, get out of the business entirely, or both. In any of these scenarios, utilities damage prevention suffers. Locating companies who cannot cover their costs frequently offer inferior service on their way to going out of business.
An ounce of prevention is worth a pound of cure.
By world standards Australia’s damage prevention record is poor. There are far too many utility strikes occurring. This can be attributed to a number of elements; one of the key ones being training practices or should I say lack of training. Dial Before You Dig (QLD) tried very hard recently to introduce a National Training Scheme, but unfortunately because of a number of issues this became a much watered down version of what is really required.
Value Means More than Price
Because “lowest-bid” clearly doesn’t mean “lowest cost” nor does it mean “best value”, companies should select locating organisations based on their ability to offer greatest value – the highest quality service at a fair rate. To offer value, a locating company must continually invest in the areas that make the greatest contribution to their ability to work on time and damage-free – the twin benchmarks of underground utility protection. These include:
Trained, reliable personnel
The job of locating underground utilities today requires more skill and technological sophistication than ever. With the proliferation and increasing sophistication of utility connections caused by economic development and technology advances, the job of locating utilities requires more skill, not less. Locating companies must be willing and able to attract and retain enough skilled technicians to provide accurate and prompt service. Companies must develop the ongoing availability of qualified, committed field technicians by maintaining an employee support and training program that is second to none.
Information technology
Recent advances in wireless technology now allow field technicians to work smarter, better, and faster. Through investment in the latest technology and world best practices, superior locating companies can offer a new standard for productivity, accuracy, management and data collection in the utility damage prevention industry.
Partnership approach
Trust, communication, cooperation, and mutually beneficial business arrangements are the foundation of reduced total cost.
The ability to foster trust, communication and cooperation with excavators, utility owners, and regulatory bodies is integral to a locating company’s ability to provide accurate, reliable service.
A New Model for Utility Damage Prevention
Through value-based investments locating companies are positioned to offer a new service model for their services. This model is based on collaboration, trust, mutual benefit, and performance-based contracts – not adversarial relationships and a low-bid mentality.
Look for locating companies that continually invest in staff training, technology; quality, continual improvement, and high performance in an environment where businesses face increasing competitive pressures. These are the locating companies that you can count on to control utility damages with an eye toward minimizing the total cost of utility damage prevention.
Adapted from an excellent article on the UtiliQuest website, by Jeff Moore. Jeff, who owns the Australian training organization Locating Unlimited (www.locatingunlimited.com.au) has a vested interest in Damage Prevention and providing superior locator training.