By Nick Liberto, P.E.
The term “turnkey contractor” is defined in the powder
coating industry as one supplier who is responsible for
providing all the equipment, installation, engineering, startup
assistance, training, etc., for a project with little or no
involvement of the purchaser until the system is accepted.
There are different components
from different
sources (contractors) in a
powder coating system. System
houses are responsible for selling,
engineering, and usually installing
the pretreatment systems
(washer and dry-off oven), cure
systems (convection, infrared [IR],
or both), part conveyance (typically
overhead conveyor and supports),
and environmental rooms.
They may purchase some of these
components from other suppliers
(i.e., conveyors and environmental
rooms); however, they are responsible
for their design and installation.
Powder application and recovery
vendors are responsible for selling,
engineering, and providing installation
supervision for the devices
that apply the powder coating onto
the part along with containing the
overspray powder coating. Sometimes
the installation of the entire
system is handled by another contractor,
or contractors, who provide
skilled tradespeople (electricians,
mechanics, plumbers, welders, riggers,
sheet metal workers, etc.) to
assemble, wire, plumb, weld, etc.,
the equipment components into a
working system. Therefore, the typical
powder coating installation may
require as few as two, to as many
as four, contractors to deliver and
install a complete powder coating
system. Larger and more complicated
powder coating systems can
have many more contractors who
are responsible for control systems,
robots, masking, building construction,
etc.
The pros of using a turnkey contractor
include the fact that one
responsible authority will provide
all the project management and
become the single interface to the
purchaser. This allows the purchaser
to be free from dealing with the
individual contractors necessary to
provide the powder coating system.
In turn, this responsible party will
charge a fee for this service and will
collect all funds for all the contractors
in their employ to complete
the system. This fee can be up to
30 percent of the cost of the equipment
components for which this
contractor does not supply directly.
One of the cons to using a turnkey
contractor is the cost of the
management fee, which sometimes
can be so costly that the purchaser
may be able to afford to hire an independent
consultant or a permanent
finishing engineer to do the
job. Also, the single contact feature
of turnkey contracting at times can
be misleading since the purchaser
has some other responsibilities that
necessitate them to have handson
participation with the project
to handle building modifications,
powder and chemical selection,
utility provisions, permitting, insurance
and code inspections,
etc. Furthermore, if the turnkey
contractor does not pay his sub-
contractors for their equipment or
services, these subcontractors may
come to you directly for the unpaid
invoices and may lien your property
until a satisfactory settlement
is made.
Turnkey Contractor Candidates
There are several possible candidates
that can become turnkey
contractors for a powder coating
system, including system houses,
powder application vendors,
system integrators and engineering
firms.
System House. This contractor is
the natural choice for turnkey responsibility
in most powder coating
systems, because they have direct
involvement with the design and
manufacture of most of the system
components. Therefore, the project
management fee is often lower. Additionally,
they normally have their
own installation crews that can install
other system components (i.e.
the powder application and recovery
equipment) along with their
own system hardware. Since they
supply most of the equipment, they
also have the highest financial stake
in the system (often 60 percent)
and the most at risk if the system
installation goes badly.
Powder Application Vendors.
Unless the installation is a retrofit
of an existing finishing facility
where most of the other equipment
components (i.e., washer, ovens,
and conveyor) are already in place,
then this person is the most unlikely
candidate for turnkey contractor.
Quite frankly, it would be difficult
to entice this contractor to take on
the turnkey responsibility for the
entire system, given their risk of
financial loss if the system installation
goes badly.
System Integrator. This is an organization
that doesn’t actually build
any equipment but usually sells
complete systems and may provide
installation services. In this case,
they have even more exposure than
the application equipment supplier,
since they must purchase and
resell the entire system. Therefore,
the turnkey fees will be the highest
when this person takes on the
total system responsibility. One has
to ask, “Why is this person willing
to take such a high risk?” The answer
is simple: “They are unhappy
with the amount of commission
that they receive from the actual
equipment manufacturer and feel
that the increased revenue is worth
the risk.” This person may be the
only choice for turnkey contractor
in very small powder system installations, where the other vendors
are not interested in becoming the
turnkey contractor.
Engineering Firm. These firms
are often used in large automotive
and appliance installations, where
the powder system is part of a
new facility. Often, these firms are
responsible for the project management
of the entire facility, including
the building construction.
However, they are not normally involved
with most mainstream powder
coating installations.
Choosing a Turnkey Contractor
The rule of thumb used in determining
the best choice for a turnkey
contractor is to select the vendor
who has the most knowledge,
manufactures the largest portion of
the system, and has the largest financial
stake in seeing the project
completed properly and on time.
Given the above choices, the most
obvious selection of turnkey contractor
is the system house (unless
you are an automotive assembly
plant or appliance manufacturer
requiring the support of an engineering
firm). The reasons are
mostly economic since the system
house manufactures 60 percent of
the equipment they will only assess
the 30 percent turnkey fee on the
remaining 30 percent. Their higher
financial stake implies their desire
to ensure the project’s overall
success.
I recommend that you investigate
each turnkey contractor
thoroughly using the following
guidelines:
• Check their customer references
on past project performance.
• Visit their manufacturing facility.
• Investigate their financial stability
and history.
• Talk to the subcontractors that
they will be supervising and determine
their comfort level with
the proposed turnkey contract.
• Solicit the help of a knowledgeable,
unbiased, unaffiliated, credentialed
consulting company to
evaluate the investigation results
and offer alternate choices.
Nick Liberto, P.E., is president of Powder
Coating Consultants, division of Ninan
Inc., an independent technical consulting
firm in Bridgeport, Conn. He can be
reached via email at
pcc@powdercoat.com.