The Hidden Costs of Buying Cheap: How I Learned to Stop Chasing the Lowest Quote on Elevator Maintenance

It Started With a Budget Squeeze

Three years ago, I took over facility management for a mid-sized office complex. We had six elevators—two passenger, two service, and two escalators in the lobby. The previous manager had left a mess of spreadsheets, but one thing was clear: the elevator maintenance contract was up for renewal, and the current vendor was charging us $48,000 annually.

My directive from upper management was simple: "Cut costs." So I did what any procurement person would do—I shopped around.

I sent RFQs to five vendors. The quotes came back ranging from $32,000 to $52,000. The lowest bid was from a regional company I'd never heard of. To say I was tempted is an understatement. Saving $16,000 a year? That would make me look good.

But I'd learned one hard lesson in my years of procurement: the lowest quote is rarely the cheapest option.

The First Red Flag

When I dug into the $32,000 quote, I found the problem. The base price covered only 4-hour response time during business hours. Overtime? Extra. Holiday calls? Extra. After 6 PM? You're paying double.

I called the vendor to clarify. The sales rep was friendly enough. "We keep our base rates low by not including everything," he said. "Most of our clients add on what they need."

So I asked: what does the $48,000 contract from our current vendor include? I pulled out the old contract and compared line by line.

• Current vendor: 2-hour response, 24/7, all parts under $150 included, no overtime markup.
• Cheapest bidder: 4-hour response, business hours only, parts billed at market +15%, overtime at 1.5x.

Let me rephrase: I was fixated on the line item price, but the real cost was in the fine print.

How I Calculated the Real Cost

I built a simple spreadsheet—nothing fancy, just three columns: Line Item, Current Vendor, Cheapest Bidder.

Base annual: $48,000 vs $32,000. Difference: $16,000.

Then I estimated usage from our call logs. Over the past 12 months, we’d logged 22 after-hours callouts, 4 holiday emergencies, and replaced about $3,000 in small parts.

• After-hours premium: 22 calls × $250 avg (cheapest) = $5,500 vs included.
• Holiday calls: 4 × $400 = $1,600 vs included.
• Parts markup: estimated $450 extra at 15% vs included.

Total estimated hidden costs: $7,550. That brought the cheapest quote to $39,550. Still cheaper than $48,000, but much closer.

Then I factored in risk. What if we had a major breakdown? The cheapest vendor's contract capped liability at $50,000. The current vendor's contract capped at $250,000. That's a difference worth considering.

The Moment of Truth

I presented my analysis to the management team. The CFO looked at the numbers and asked one question: "What's the TCO?"

I explained: $39,500 for the cheapest, with a $200,000 lower liability cap. The current vendor at $48,000, with much better terms and a proven track record.

We ended up negotiating with the current vendor. I showed them the competitive landscape and asked for a retention discount. They came back at $44,000—a $4,000 savings without switching.

So glad I didn't go with the cheapest. Almost did, which would have been a nightmare when a cable snapped on a Friday evening.

What I Learned

Procurement isn't about finding the lowest number on a spreadsheet. It's about understanding what that number includes—and excludes.

The exercise took me about 4 hours. Four hours to save $4,000 and avoid potential $50,000+ problems. That's a $1,000 per hour return on my time.

Here's the checklist I now use for every vendor comparison:

1. List all included services with dollar values
2. Estimate usage patterns from historical data
3. Calculate worst-case scenario costs
4. Check liability caps and exclusions
5. Add a 10-15% buffer for unknowns

Bottom line: the cheapest quote had a TCO of $39,500 to $50,000 depending on usage. The current vendor's TCO was $44,000 flat. The 'cheap' option was actually more expensive when you factor in risk.

One More Thing

I should add that we stayed with the current vendor for two more years. When we eventually did switch, it was to a mid-range provider with transparent pricing. Not the cheapest, not the most expensive—just a solid TCO that made sense.

If someone asked me for one piece of procurement advice? Calculate TCO before comparing quotes. It takes an afternoon and saves you years of regret.

Honestly, I wish I'd learned this earlier. Would have saved me from at least two bad vendor decisions in my early days.