Philly Services Not Really a Bargain
Michael Hart -- Tradeshow Week, 8/21/2006
Dear Editor:
Re: "Philly CC Offers AV Directly to Customers" (July 3, 2006):
The Exhibition Services & Contractors Assn. feels it is necessary to respond to this article concerning audio visual labor at the Pennsylvania Convention Center. We feel that the article quoting the director of the center, Dittie Guise, does not paint a complete picture of the situation that currently exists and should not be considered full disclosure, as Ms. Guise has stated.
The utilization of presentation technology has become mission-critical for many customers and, because of this, long-term relationships have been formed between customers and their audio visual contractors. In most any service business, it is the experience and expertise the vendor brings in the management of labor and equipment that are the value added over and above the base price of labor and equipment.
In this day and time, most customers understand the value the contractor brings to the relationship and are willing to pay a reasonable markup for this expertise. "Reasonable" is a relative term in this situation, as detailed below.
The fact of the matter is that PCC utilizes a third party to handle union labor. The labor is obtained from the local stagehands union at a cost of approximately $42 an hour. This is the same rate that all audio visual companies pay the local union.
PCC, through its third-party vendor, sells this labor at $61 an hour, a 45-percent markup. A recent survey of our member companies has revealed that most would quote $65 to $68 an hour for the same labor if allowed to go directly to the union for their labor. While it is a higher rate than what PCC is quoting, there is much more to the price than meets the eye.
If clients decide to order labor directly from PCC because of the lower rate, they need to be prepared to accept the following responsibilities that go along with that arrangement:
- determining the amount of labor necessary to execute their meeting requirements
- supervision of the labor on a daily basis
- determination of the skill levels of the individual workers and proper assignment based on those skill levels
- complete understanding and familiarization with all the work rules pertaining to that labor crew, i.e. straight time, overtime and double-time hours, minimum labor calls, etc.
- determining each day's labor call and turning it in to the labor coordinator on a timely basis
- coordination of their labor calls to coincide with unloading and reloading of the audio visual equipment since this is handled by different unions
- liability for any damages or injuries that may be caused by the labor they are supervising
The markup that contractors place on labor is intended to cover all of the above mentioned items as well as the downtime that is inherent in any meeting and that cannot legitimately be charged to a client. This markup also covers the contractor's overhead and, yes, a reasonable profit.
All these things are the value-add that a professional audio visual contractor brings to the relationship. ESCA does believe the value-add aspects of aggregating the labor and offering a lower hourly rate are equal without understanding the additional responsibilities that a customer must accept in order to benefit from the lower rate.
Finally, while the rate that customers are being quoted by PCC appears to be much lower than what contractors are quoting, it does not reflect the added work and responsibility that the customer will incur and, therefore, without full disclosure, is a misrepresentation of the overall situation.
Tom Drullinger, President, Exhibition Services & Contractors Assn., Henderson, Nev.
Letters to the editor of Tradeshow Week are always welcome. Please send them to Editor in Chief Michael Hart (by mail) Tradeshow Week, 5700 Wilshire Blvd., Suite 120, Los Angeles, Calif. 90036-5804; (by e-mail) hartm@reedbusiness.com ; or (by fax) (323) 965-5306.
