This case study details the strategic perimeter fence project for The Green Solution’s 27-acre facility in Trinidad, Colorado. Through the application of Stack Profit Mining principles, the procurement process was revolutionized to generate a massive $210,000 profit upside and cost savings. The following breakdown illustrates how dynamic bidding and value engineering transformed a $345,000 estimate into a highly efficient financial success.

Case Study: Stack Profit Mining – The Green Solution Fence Purchase
Project Overview
Client: The Green Solution
Location: Trinidad, Colorado
Scope: Perimeter fencing for a 27-acre grow facility
Initial Design-Build Estimate: $345,000 (pre-site design)
The Challenge
Before implementing Stack Profit Mining principles, the project faced several traditional procurement hurdles:
Lazy Bidding & Cost Creep: The project manager had an overly friendly relationship with the fence company, which led to cost creep claims regarding rising steel prices.
Lack of Value Engineering (VE): VE was not clearly engineered into the initial buy. The originally specified fence contained excessive structural weight that was unnecessary for the project's actual requirements.
Delayed Procurement Timing: Historically, the team waited too long to secure contracts, leaving insufficient time to gather highly competitive numbers or properly leverage supplier relationships.
The Stack Profit Mining Intervention
To optimize the financial outcome, several core strategies of Stack Profit Mining were applied to the procurement process:
1. Dynamic Procurement & Bidding Refusing the initial $345,000 estimate, the project was sent out for a rigorous Design-Build evaluation. By expanding the pool to 10 qualified bidders, the lowest bid returned under $200,000—exposing a massive margin range between the high and low.
2. Value Engineering (VE) The product was effectively value-engineered by trimming out excess unnecessary weight from the fence design. Following three rounds of negotiations while specifications were perfected for permitting, the final negotiated base price was driven down to $135,800.
3. Early Pay & Cash Discounting To further optimize the financials, cash efficiency strategies were deployed:
Negotiated a 3% cash discount for paying in cash.
Approached the supplier with an early pay arrangement, picking up an additional 3% discount by shifting to weekly payments, which the supplier eagerly agreed to maintain their own cash flow.
4. Group Buying & Balance Sheet Bankability Cash assistance empowered the fence company to execute an aggregate buy. They combined this project's steel requirements with two other steel fence companies who had a large highway project. This bulk purchase drastically lowered costs, satisfying the upstream steel supplier and passing the discounts down the line.
5. Pay for Performance & Profit Floors A strict performance agreement was installed:
Liquidated Damages & Bonus: Guaranteed liquidated damages were tied to a specific completion date, offset by a 5% bonus if the contractor finished on time.
Profit Floor: A bottom profit floor was established upfront, so all parties knew the financial boundaries. The dynamic procurement agreement ensured the supplier participated in dropping prices without sacrificing their core margin.
The Results
The application of these cascading principles ensured that everybody was a winner and the project gained a $210,000 profit upside. The project flowed with little to no financial friction, and all parties met their profit goals. The buyer secured a highly favorable price through Value Engineering and Dynamic Procurement, while the supplier and trades benefited from Pay for Performance, weekly cash flow, and Just-In-Time delivery.