Imagine youâre an expert carpenter. And, solely out of altruism, you spend six weekends a year volunteering to build houses for Habitat for Humanity. You wake up early on a Saturday morning, walk away from your family, and spend two full days putting up a house for the greater good. Habitatâs not paying you in anything but the lunch and snacks they bring you, but its fulfilling â youâre giving back.
You get so good at leading teams to build houses you get a call from Jimmy Carter. Carter calls you up and invites you to Habitat for Humanityâs headquarters for lunch to thank you for your hard work.
But driving up to Habitatâs headquarters, things seem out of whack. You, as a builder can take one look at it, and understand that the place is about to fall apart. Structural beams are in the wrong place. There are two toilets in every stall in the bathroom. The water in the building is pumped into a large pool at the top of the building, and then trickles down to where it needs to go, and the pool is held up by very narrow wood beams. And the furnace and water heater are insulated with dry pine straw.
You donât even want to go into the building, but itâs to meet president Carter, so you decide to essentially risk your life and get in the elevator and hit the button to go to the top floor. And of course even though youâre the only passenger on the elevator, the car stops at every floor on its way up to the top.
By the time you get to Carterâs office youâre terrified. Now this is an organization youâve given a lot to, and that you care a lot about. You certainly donât want the building to fall apart. Youâve got to say something, or at least figure out how an organization with so much access to excellent carpenters, plumbers, and electricians, could end up with such a terrible, dangerous building.
You sit and say to the former president, âThanks for having me here for lunch. This building is something else, isnât it?â
President Carter responds, seemingly well aware that his building is a disaster: âItâs amazing, isnât it? Have you ever seen a more poorly designed building?â
âNo, no Mr. President, I havenât. Itâs really dangerous â itâs not only aesthetically bad, itâs also structurally unsound.â
âOh, I know. Our contractors told us it was. Theyâre fixing it now, thankfully. After theyâre done fixing the insides, hopefully weâll have enough budget to upgrade the aesthetics, too.â
âThatâs a relief, Mr. president. Who built this thing? I hope theyâre not building any houses.â
âWell, we bid this out and the only people who bid on this was Master Builders, Incorporated or MBI.â He says.
âI had no idea MBI still built buildings. Who is cleaning up their mess?â you ask.
âWell, MBI is on the hook to fix it too. The good news is, theyâve put 50 new people on the project. Including 45 new project managers.â
âMr. President, Iâm sorry, but you really should switch vendors. I wouldnât trust the people who built this building to clean it up.â you say.
âWell, it was a 500 Million dollar project and there really arenât that many builders out there that can qualify for a project of this size and scope. So we have to use them. Theyâre the only ones that have a track record of doing half-billion dollar projects.â he says.
â500 million dollars? For this office? How many people do you have in here, 60?â
âIt has room for 60, but 30 of our people work in remote offices â out in the field building houses.â
âMr. president,â you say, âI donât know how to tell you this, but itâd probably take the crew I had this weekend to build a habitat house about 500k to build an office building like this. Half a billion dollars more than you need to build a town, not an office building.â
He raises an eyebrow: âI think thereâs a lot more that goes into building a building of this size than one of the residential buildings our volunteers build. We have to be compliant with many more building codes.â
âLike what?â you ask.
âFor instance, we need to be accessible to people with disabilities. This means we need ramps to our doors, urinals that are installed a bit lower, and braille on our elevator buttons. And we need to control access to the building. Stuff like thatâ he says.
âMr. President â thatâs generally cosmetic stuff â it shouldnât increase the cost and scope of your building by 1,000x. And if you build your building with standards, most of that stuff is already done for you. Let me and a team come in here and fix this. Weâll do it for a tenth of the cost, and you can take the money you were planning to spend on your building, and spend it on building more houses and putting more people in them.â
âReally? I have to confess I donât know much about actually building houses these days. Iâm going to look into this. But for now, letâs just enjoy our lunch.â
You find president Carter charming, and he takes a liking to you too. At the end he gives you his card and says, âwe really appreciate your help. And if you know how we can do anything better, you call me directly and letâs talk about it.â
You finish up your lunch with president Carter and get out of the building as soon as you can. Then on your way home, you drive past a home that you built for Habitat. Itâs empty. By the looks of it, nobodyâs been on the lot since the press event that happened right after it was built. You decide to take a look around at the other houses youâve helped build. They all seem to be in some stage of disrepair and neglect.
By the time you get home, youâre outraged. You decide to sleep it off, but the neglected houses keep you up. By 9am, you find yourself with your phone in your hand dialing president Carter.â
âHey there! Good to hear from you! Iâve been asking around about our building issue. It seems like MBI is the only builder thatâs managed to go through our vendor qualification program, and thus theyâre the only ones qualified to do the building. But if you went through the process, you could probably bid on the project and compete against them in the open market for the next round of work.â
âHow long does that process take?â
âTo register? I donât know. Shouldnât take that long, should it?â
âI guess not,â you say, âbut Mr. President, I have a more pressing question â why is it that all the houses I helped to build are all vacant and neglected?â
âAh, yes thatâs really unfortunate. But the problem is, we donât have the budget to hire the people needed to keep the property maintained and to put them in houses.â
âBut⌠youâre spending a half billion dollars on your office building. Do you know how many people you could put in houses with that money?â
Carter chuckles. âWow, that would be a lot, huh? Hey â Iâve got to run to a fundraiser. But itâs good talking to you. Iâll introduce you to our procurement people about getting registered as a vendor for us.â
Youâre frustrated, but think you can solve the problem. Youâll just form a company with your friends from Habitat to get that buildingâs cost down so that money can get freed up, and then people can get in those houses. A few days later, you get a terse email from Habitat for Humanityâs procurement division:
âDear Ms. or Mr. Smith,
Please see the attached documentation for signing up to be a supplier for Habitat for Humanity. Please note that your business must meet the minimum requirements in order to bid on our projects.â
Out of the 14 attachments on the email, you manage to find the document (titled 2012_AU776-REQS.PDF) describing the requirements. It says:
All Vendors must be at least 2 years old. Vendors for projects that cost more than 150,000 must have a one billion dollar liability insurance policy.
Well, so much for that. You wonât even be eligible to bid on the project for another two years. And thereâs no way youâll get an insurance policy like that. Only huge mega corporations have insurance policies like that. You call president Carter.
âHey, itâs good to hear from you. You get connected with our procurement people?â
âYeah, I did. Itâs unfortunate though, because they say that I have to be two years old and have a huge insurance policy in order to even get a seat at the table to help you out. So, I guess thatâs that.â
âWell, why donât you partner up with an existing company and just subcontract through them. I think our procurement people have encouraged a mentoring program for this.â
You have to admit, you hadnât thought of that. So you call up the procurement people at Habitat. Theyâre very accommodating and they give you a list of companies who say theyâll partner up with smaller contractors to âlearn the trade.â
You set up meetings with MBIâs biggest competitors: Dynamic General Builders, Whiskey Elon Jackson, and Whiterock. And when you meet with them itâs clear that they donât know anything about building houses. Not a single one of them uses termite treated wood, for instance. They all connect copper pipes to iron ones, not understanding that over time, that will cause corrosion and the pipes will have to be replaced. And when you mention these issues, theyâre condescending about it: âListen,â they say, âyou may know a lot about building homes â but you have no idea how to build enterprise-grade buildings. You have to do things this way. Work with us and youâll learn this in time.â
You just canât bring yourself to do it. 99% of all new houses today use PVC piping and termite treated wood for damn good reasons, and youâre not going to go back and use tools and techniques from 50 years ago.
Then you realize it: this is, of course, the problem. This is the reason why the building costs a half-billion dollars in the first place. Habitat is trying to build a modern building using the tools from 50 years ago. Itâd be like trying to buy a car with 300 horsepower by buying 300 actual horses and trying to get them to all go at the same time. Horses cost $5,000 each.
Defeated, you head home. The phone rings, and itâs president Carter.
âHey there â I was calling to see if youâd lead a build-a-thon this weekend to put up a house in your neighborhood. Homelessness is way up because of the economy, but if we work together, we can give people a helping hand up.â
You get sick to your stomach. âMr. president, Iâd be happy to help, but I canât very well build houses for you for free while youâre paying people a half billion dollars to build yourself an office. And I know you donât have the budget to actually maintain and get people in the house.â
âOh, Iâm sorry to hear that. Is there anything I can do to change your mind?â
âYes. You can make it so that your own volunteers whoâve built these houses can come in and fix yours. And that starts with changing who can compete for your contracts,â you say.
âGosh, Iâd really love to do that, but to be honest with you I really donât want to pick a political battle with our procurement people. Itâs an issue that doesnât win me a lot of support with my board. Theyâre much more concerned with getting new homes up or meeting fundraising numbers,â he says.
âSo you donât think that spending a half billion dollars on your office building is a high priority problem?â You say, steaming.
âWell, I do. But I donât think my board is going to let me do anything about it.â
âI think theyâd be really concerned about it. Who is on your board?
âWell, we have a ârepresentational boardââ he says, proudly. â80% of the board votes belong to our members â people who donate under $250, and people who volunteer. Then we have 20% of the board represented by our large corporate sponsors: people who have given more than $50,000.â
âReally? Do those people usually vote on stuff?â You ask
âNo, most are just happy donating. Itâs the corporate sponsors who normally care about our operations.â he says.
âAnd who are they?â you ask.
âMBI, Whiskey, Dynamic General, Whiterock, you know them.â He says.
You want to give up. But you think about it, and for some reason, you just canât.
âMr. President,â you say, âweâve got to fix this procurement problem. And if itâs not an issue for you now, Iâve got to make it an issue. But for now, no. I canât lead the build-a-thon this weekend. Iâve got a bigger problem to solve than building houses on the cheap.â
âOkay!â he says. âWell, hope to hear from you soon then!â
You grin and say âYou bet!â