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Tag Archives: Contractor Matrix Pricing

How Contractor Matrix Pricing Imperils 5G Builds, Work Quality, Industry Safety

To illustrate the negative effect to safety and work quality that pricing pressures have, as imposed on contractor firms by top wireless carrier, turf vendor and tower owner customers, a contractor trade association yesterday launched a whiteboard animation video.

NATE: The Communications Infrastructure Contractors Association said that take-it-or-leave-it matrix pricing exerts pressure on its member contractors that imperils 5G deployment, skilled labor workforces and industry safety.

According to NATE, some of these small businesses have had to close their doors at a time when there is already a shortage of qualified contractors required to, as NATE put it, “ensure that America wins the race to 5G.”

The video highlights problems associated with the below-market matrix pricing used by the industry’s Tier One customers, pricing that NATE said is not based upon the true material, equipment and manpower costs, in addition to the ever-increasing administrative and technical needs that professional contractors require to be compensated for to remain sustainable.

The whiteboard also points out the additional cost contractors must absorb, such as warehousing, long payment terms, burdens associated with the shifting of liability and not being able to mark up any additional materials.

The video also emphasizes that, in an already taxed workforce environment, tower technicians must be compensated for their skillsets and knowledge or they will seek other professional opportunities. To watch the video, visit here.

Todd Schlekeway, NATE president and CEO

“The whiteboard video’s key points are not anecdotal, but are truly representative of the concerns of every one of our more than 500 contractor members in the United States,” said NATE President and CEO Todd Schlekeway.

“This video is designed to educate our member contractors’ top customers of the concerns that should be addressed if we want to remain a vibrant industry capable of keeping America connected,” he said. “NATE anticipates also sharing the video with stakeholders from government agencies and congress to demonstrate the challenges contractor small businesses are dealing with in our industry that are compromising the nation’s ability to develop the workforce, deploy 5G and close the digital divide. The Association remains ready and willing to engage in the constructive dialogue necessary between the wireless carrier, turf vendor and vertical realtor executives and their teams to address the problems that affect the entire wireless industry ecosystem.”

Slide from Todd Schlekeway’s keynote address at the South Wireless Summit.

Delivering the keynote address at the South Wireless Summit, held in Nashville on June 28, Schlekeway addressed the worker shortages and increased pricing pressures his members are experiencing. He started his keynote — titled “View from the Front Lines of Deployment!” — by asking and then frankly answering the biggest question facing about the business: “Is wireless contracting becoming untenable?  Unfortunately, yes.”

Schlekeway’s thesis is basic: Downward pricing pressure from carriers and others at the top of the chain is making wireless contracting unprofitable.

“Customers at the top of the chain have shifted all responsibility for the safety and vetting of contractors to third parties with an ever-rising bar,” Shlekeway said in is keynote address. “This costs the contractor as they ‘up’ their game to meet the vetting demands. Furthermore, contracts are presented as take-it-or-leave-it and are grossly one-sided.”

NATE said that it encourages industry stakeholders to share the video with colleagues and contacts and post it on respective social media platforms using the hashtag #WirelessContractingSolutions. The NATE website is www.natehome.com.