What is the “true cost” of underground utility damage prevention? Contrary to conventional wisdom, it’s far more than the simple ticket price paid to contract with the lowest-bidding underground utility locating firm. Attempting to contain damage prevention costs by negotiating the lowest rate can increase a utility owner’s exposure to other risks that will eventually prove costly. To accurately assess the total cost of utility damage prevention, underground utility owners understand what it costs to do the job right – and how much it costs to do it wrong.
What Drives Total Cost?
Choosing an underground utility damage prevention partner is not unlike choosing a property insurance policy. If you are fortunate never to have an accident, all is good. If you experience property damage, pay a slightly higher insurance premium to ensure the company you chose can protect you against costs associated with a devastating event.
Having adequate and effective insurance is only one component of total cost management. While managing damage prevention costs, many companies heed the long-held tenets of good business.
You get what you pay for
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 price is more than the direct labor cost, which includes recruiting, training, and retention. Ticket prices paid to underground utility locating companies must also support:
- Field Equipment Acquisition
- Vehicle; Acquisition and Maintenance
- Communications Technology
- Ticket and Mobile Workforce Management Systems
- Cost of damages (including repair, loss of service, customer service, customer loyalty, claims investigation and processing, and public relations)
- Quality Assurance and Training
- Insurance
- Contract Administration
- Profit
When underground utility owners pay ticket prices that do not adequately value these costs, underground utility locating companies often underinvest in these areas, get out of the business entirely, or both. In any of these scenarios, utility owners suffer. Underground utility locating companies who cannot cover their costs frequently possess an inferior service on their way to going out of business. When an underground utility locating company goes out of business, its clients must find a substitute provider and protect themselves against the higher risk of damages due to the inferior service that the now-defunct company provided.
An ounce of prevention is worth a pound of cure
Although the utility locating industry, as a whole, maintains an accuracy standard of 99.6 percent (or one liable damage per 1000 locates), even one damage can be catastrophic. For example, when a gas line running beneath a highway becomes damaged because of incorrect markings, utility owners can incur costs far beyond the simple loss of service. Unfavorable press and public outrage can easily have a lasting impact on its competitive position. The federal and state fines that can result from a utility service disruption often drive the total cost of the event even higher. While no locating company can operate without some risk of damages, underground utility locate companies that can adequately cover service costs will be better able to maintain and exceed this high accuracy standard. More importantly, they will be financially capable of investing in training, technology, and customer-focused quality-of-service initiatives that will help drive down the total cost of the service they provide for their clients.
Value Means More than Price
The lowest bid doesn’t mean the lowest cost. Also, this does not mean the best value. Utility owners should select underground locating companies based on their ability to offer the best value and highest quality service at a fair rate. Underground locating companies must continually invest in the areas that impact the contribution to their ability to work on time and damage free, the twin benchmarks of underground utility protection.
Reliable personnel
Locating underground utilities today requires more skill and technological sophistication than ever. With the increased complexity of underground utilities caused by economic development and technological advances, the location of underground utilities requires more attention to detail. Underground locating companies must be willing and able to attract and retain enough skilled technicians to provide accurate and prompt service. GLS Utility ensures the availability of qualified and committed field technicians by maintaining employee support, appreciation, and a workplace culture carefully curated over the years.
Information technology
Advances in wireless technology allow field technicians to work more efficiently. GLS Utility has defined a new standard for accuracy, management, and quality in the underground utility damage prevention industry. GLS Utility can offer utility owners mutually beneficial contracts that promise: A higher percentage of on-time locates, more accurate underground utility locates, more accurate billing, greater flexibility, and faster resolution for damage claims. GLS Utility can evaluate quality, zero in on root causes of damages, identify field training requirements and underground locate process improvements. What’s the result? An improved bottom line for both GLS Utility and its clients.
A New Model for Utility Damage Prevention
GLS Utility, through value-based investments, is positioned to offer a new service model for utility companies. A model based on collaboration, trust, and mutual benefit. Not adversarial relationships and a low-bid mentality. Utility owners can trust GLS Utility to offer quality service at rates that allow continued investment in quality, improvement, and high performance in an environment where utility owners face increasing competitive pressures. They can count on GLS Utility to control damages, while utility owners can focus on minimizing the total cost. Utility owners can then invest more time and resources in expanding their capacity and customer base.
