Who assumes the risk for infrastructure projects?

Unscrambling the mysteries of service providers, manufacturers and project primes in the cabling industry.

April, 2012 Issue of Cabling Installation & Maintenance Magazine

Unscrambling the mysteries of service providers, manufacturers and project primes in the cabling industry.

By Bob Eskew, RCDD, Automated Systems Design

Today’s network infrastructures are the backbone on which the majority of all technology systems within an organization rely. This includes everything from data centers to building systems. A small issue with a network infrastructure could have a significant impact on business continuity. Due to the critical nature of organizations’ infrastructures, it is important for structured cabling professionals to understand not just warranties and guarantees, but also who is backing them up.

On a typical cabling installation project, there may be multiple vendors involved behind the scenes, including subcontractors, suppliers and manufacturers. When a network infrastructure technology project goes awry, who is left holding the ball? You may assume that the original service provider hired to do the job assumes the risk for the entire project, but that is not always the case. A little-known trend in the structured cabling industry is for cabling service providers to pass risk onto suppliers and manufacturers. The service provider may offer a guarantee for installation and project work, but may not assume risk when it comes to a manufacturer’s products. Instead, service providers often extend manufacturer warranties to end users on behalf of the manufacturer, but do not service the warranty directly.

So how do you know who assumes the responsibility for the success of a network infrastructure implementation? The first step is to determine who is a service provider, manufacturer or project prime.

When it comes to structured cabling implementations, there are several types of providers that assume the risk and responsibility for its success—namely service providers, manufacturers and project primes. Each type of provider assumes a different level of risk/responsibility for a project, ranging from just covering installation work to providing a warranty covering everything from installation work to the products used. Outlined herein is a general guideline of each provider’s typical level of responsibility and acceptance of risk.

Service provider (designer/installer only)—Network infrastructure service providers offer design, installation and maintenance services, but do not manufacture cabling products. Instead, these companies serve as resellers of cabling products from various manufacturers or a single manufacturer. The service provider itself may offer a guarantee or warranty for design and project work, but may not assume the responsibility for products supplied by a manufacturer. Products are usually covered by a separate manufacturer warranty, which means that end users may have to deal with the manufacturer directly if there is a problem with the system.

Manufacturer (supplier only)—Some cabling companies manufacture products, but do not provide design or installation services. These manufacturers play a supplier role only, and sell products to service providers that offer design, installation and maintenance services to end users. Manufacturers may offer a warranty on products, but these warranties are usually separate from any warranties offered by service providers. Manufacturer warranties often do not cover installation services. In fact, in these cases, if a product is improperly installed or installed by a technician that is not certified to install the product, the manufacturer’s warranty may be void.

Project prime (manufacturer, designer and installer)—“Project prime” is a term frequently used in the construction industry to refer to a general contractor who assumes ultimate responsibility for the entire project, including all work done by subcontractors. This term is used less frequently in the technology arena, and the concept of a “project prime” in the cabling industry is even more of an anomaly. A project prime in the cabling industry serves as the manufacturer, designer and installer, and guarantees all service work as well as all products manufactured in-house. A company is considered a project prime if it:

  • assumes the entire risk of the project’s overall success,
  • performs “design/build” services, not “design-only” services,
  • offers multiple types of disciplines in the scope of work,
  • relies on project-management skills to produce project success.

Several potential danger zones exist in network-infrastructure implementations. Specifically, the areas of warranties/guarantees, contractors versus affiliates and cabling versus components can present challenges. Here are some ways to guard against these potential dangers.

Warranties and guarantees—Make sure your warranty and guarantee information is explicitly spelled out so there is no question who is responsible for correcting an issue. The warranty or guarantee must define what is a service-related issue. You do not want to find yourself in a situation in which a service provider insists the problem is with the product, and a manufacturer will not stand by the guarantee, claiming the product was improperly installed.

Contractors versus affiliates—Some cabling installation companies provide services through partners who are members of an affiliate program. Contracts between the parent company and the affiliate partners vary from company to company. Be sure to determine if the parent company assumes the risk for work completed by affiliate partners, or if the affiliate partners assume the risk for projects as a separate contractor. In addition, verify if affiliate partners have to be certified to install the manufacturer’s products. If they are not certified, the manufacturer warranty on the products may be void.

Cabling versus components—Before you sign a contract, look for a clear explanation of what system components are covered by warranties. Some warranties cover cable only, while more-comprehensive warranties cover both cable and the connecting hardware and components.

Hopefully the information in this article will help you avoid common hassles during your next project.

Bob Eskew, RCDD is founder and CEO of Automated Systems Design (www.asd-usa.com).

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