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​Late payments are every contractor’s nightmare. Late payments disrupt cash-flow and result in the contractor being unable to pay their suppliers, subcontractors and even employees. This could result in the loss of payment discounts (so items cost more) and stricter payment terms with suppliers in the future, which could mean that suppliers require earlier payment or even payment in advance, which negatively impacts the contractor’s cash-flow further. Of course non-payment of suppliers, subcontractors and employees often disrupts work on construction projects resulting in delays, and it creates mistrust between the parties impacted. Nobody wants to have to wait for their money.

​It’s therefore essential that contractors ensure they are paid on time. This can be achieved by implementing the following:

1. The terms and conditions in the contract document must be clear to all parties. What can be claimed and when can it be claimed? When is payment due? The client must know when payment is due.
2. Contractors must submit claims and invoices on time.
3. Invoices must be clear and include all required supporting documentation. Clients will often make excuse for non-payment, blaming missing documentation, mistakes on the invoice, faulty workmanship, and more. Mistakes on invoices will delay payments.
4. Invoices should clearly show the payment instructions. When is payment due and how should payments be made?
5. Know when payments are due and a few days in advance remind clients that payment is due. Check that there aren’t problems with the invoice and that the full amount will be paid.
6. Provide good service. Happy customers are more likely to pay on time. Unhappy customers will deduct monies from invoices, look for excuses not to pay, or deliberately drag out payment.
7. Follow up immediately when payment is late. A simple phone call a day after payment is due may be all that’s required to get a customer to pay. Often non-payment is simply an oversight, forgetfulness, a clerical error, or a person being sick or on leave.
8. Don’t rely on verbal responses, so send out a written notice of late payment within 7 days of the invoice not being paid.
9. Stay professional with all your communication. Be firm and persistent, but always remain polite and friendly. Make it clear that no matter the excuse late payment is not acceptable and it’s causing problems.
10. Understand why payment hasn’t been made. If the client is running into financial problems research to find out the extent of the problems. Is it just a small hiccup caused by non-payment to them, or is it more serious, possibly the company going into bankruptcy. Talk to your client to see if you can formulate a resolution. It’s important that verbal agreements are followed up in writing so there are no misunderstandings. If the client is in serious financial trouble understand what can be done in terms of the contract to protect your company from further losses. Terminating a contract has to follow strict procedures. Terminating the contract for the wrong reasons puts the contractor in breach of the contract and will jeopardise further payments, even opening the contractor to being sued for damages from the client.
11. Follow the legal route for non-payment as stipulated in the contract document. Get expert advice when required. Understand the costs of litigating against the client since success isn’t always guaranteed. Reaching a solution often takes time and it can be very expensive.
12. Pick your clients with care. Some clients have a reputation for paying contractors late, or making spurious deductions from their contractor’s invoices. Contractors should research their clients and ensure that they have the funds to pay for the work.
13. Offering a small discount for early payments costs money but it often results in clients paying invoices on time.
14. The contractor’s senior management must ensure that employees are aware of how critical it is to ensure that invoices are sent out on time and that payments are received when they are due. Management should be advised when payments are late. Late payments may have a big impact on the company's operations.
15. Contractor’s shouldn’t be fooled into being nice and regularly accepting late payments in the belief that the client will award them further work. The contract document is there to protect both the contractor and the client and no company should take offence to their contractors demanding to be paid on time in accordance with the contract. Clients that regularly pay their contractors late will often take advantage of their contractors in other ways.

Late payments and non-payment is probably the biggest cause of construction contractors going bankrupt. Being paid on time is critical to every business. It’s critical to claim all completed work in accordance with the construction contract and submit invoices on time. Ensure that payments are received and follow up late payments immediately. Regrettably many construction contractors don’t get the basics of invoicing and getting paid right. No company can afford to work for free.
How do you ensure that you are paid on time?
Do late payments impact your business?
Please comment, like and share this post if you found it useful.

​I've written several easy to read books for owners, contractors, construction managers, construction supervisors and foremen. They cover all aspects of construction management and are filled with tips and insights.
The books are available in paper and ebook from most online stores including Amazon.

​Contact me for help and advice.
To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

​A few months back my wife was away for a couple of weeks visiting her mother. I had a few maintenance items to sort out around the house and needed tools and various items from the tool cupboard in the garage. Unfortunately, my wife had left her car parked too close to the cupboard so I couldn’t open the cupboard doors properly. It wasn’t easy getting to the tools and other items I needed in the cupboard, so I had to be careful that the cupboard doors didn’t bash her car and scratch it. Since I had a few things to fix I was in and out the cupboard several times over a couple of days. Now, of course, the easy thing would have been to re park the car further from the cupboard. This would have made access to the cupboard easier and there was less chance of damaging the car. Indeed, the couple of minutes it would have taken to re park the car would have been less time than I lost working around the awkward access to get the tools I needed.
​
You might laugh at my stupidity, but I’m sure that everyone has had a similar situation. We’ve all put off fixing the light that’s not working or repairing the door handle that’s falling off, or fixing a sticking door or jamming window – even when these repair jobs would probably only take a few minutes, maybe ten minutes at max. Instead, we live with the problem for days, weeks and even months. Where the problem is irritating us daily, possibly costing us a minute every time we have to fumble in the darkness or wrestle with the sticky door, where we have to slam the door to get it closed, which eventually starts cracking the door frame and damaging the paintwork. Often the cost of the repair and the time to fix the damage caused by not fixing the item straight away becomes far larger – making it even less likely that we’re going to fix it soon! What are we waiting for, all the lights to blow and the house to fall down?

​Of course, it’s the same on many of our construction projects. Construction material is stacked in walkways and rubbish is allowed to accumulate where people work. Everyone has to step around and over the mess. There could be several workers walking the route every day and they all lose a few seconds, even a minute, working around the problem. Then there’s the safety risk, somebody could trip and fall. There’s also a chance that the stacked construction material could topple or fall over and be damaged. Yet, it’s too much trouble to tidy the area. But the ten to twenty minutes that it would take one worker to tidy the walkway and work area is far less time than is lost over a week by all the people having to negotiate the obstacles.

If you look around on your construction projects this analogy is repeated several times over. Indeed many could start with their desk, office, and filing systems. A good sort out and tidy up might take a Saturday morning, but it will save you countless lost minutes every day searching for misplaced documents and missing papers. But, there’s more than just the time lost, there’s also the risk that an important item will be missed or overlooked in the chaos.

Then if you look at our project stores and construction material storage areas I wonder what you will encounter? Are they tidy and well planned, where construction tools and materials aren’t being damaged and can easily be found? Or, are things just dumped in an untidy heap? Is anybody interested in tidying things?

But, it doesn’t stop there! How are the crews working? Do they have the right construction equipment, or are they making do with equipment that’s not quite right for the job? Maybe battling with tools which are blunt or under-powered? How much time and money is that costing? There’s also the risk that the equipment is damaged, or worse, that there’s an accident. Isn’t it better to rather have the right piece of equipment, and sharpen blunt items or replace them with new sharper blades? It might take a few minutes to organise and cost extra money, but, this will almost certainly be less than the time and money saved by using the right item.
​
Unfortunately, it seems to be human nature to work around a problem, rather than fixing it correctly. Often when we do try and fix it we do half a job, a patch job, just to get things moving again. We always make the excuse that we’re too busy and don’t have the time. Is it just because we are lazy? Maybe it’s because we like to tell ourselves that we’re busy? Yet, common-sense (which doesn’t always seem to be that common) should tell us that living with the problem and inconvenience costs far more time and money than fixing the problem would. That, anyway, fixing the problem often doesn’t take that long. But, furthermore fixing the issue now, will remove an inconvenience, it will improve safety and it will often prevent an item being further damaged. Undoubtedly it will improve productivity!

​This article was first published on the ClockShark website. To visit this website and continue reading the article click on the link above.
Please share this post

​Do you want to learn how to manage construction projects successfully? I've written several easy to read books for owners, contractors, construction managers, construction supervisors and foremen. They cover all aspects of construction management and are filled with tips and insights.
The books are available in paper and ebook from most online stores including Amazon.
Need help with your construction project or construction company? Contact me for help and advice.
To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

On construction projects days are often rushed and many construction project managers, supervisors and foremen barely have time to think, being pulled in different directions and facing demands from their managers, their crew and the client. Yet, it’s vital to find some quiet time to think through and plan the day’s activities – what must be done today, what must happen tomorrow and what must happen today so that tomorrow’s tasks can be accomplished. What must happen next week and what must be done today so that next week’s tasks can happen.

This day to day planning includes ensuring that materials are ordered, that there are sufficient workers with the right skills, and that construction equipment will be available. It comprises looking at the construction schedule (programme) so that you understand what must be done and in what sequence. It covers studying the drawings to check that all the information is complete and clear so the structure can be built. It means checking that there’ll be access to the work areas and ensuring that preceding tasks are completed. Of course, it also means communicating with your crew so that everyone knows what has to be done and how it will be accomplished.

Regrettably many in construction neglect to plan projects properly, leading to emergencies and problems when things haven’t been ordered, when items aren’t available, or access isn’t ready. It’s far easier and takes less time to plan things properly, than to resolve problems created by inadequate planning. I always say, “it’s much easier to be a fire prevention officer than a firefighter”. Project managers and supervisors often spend an inordinate amount of time ordering items which have been forgotten – this often takes several phone calls, begging and cajoling suppliers for a favour to get the item immediately, additional calls to arrange special transport, then more time following up why the item hasn’t arrived yet. Often crews have to be switched around to work elsewhere when materials, equipment, information or access isn’t available. Not only does the project manager or supervisor waste time making the changes, but invariably the crew is disrupted and everyone has wasted a couple of hours and got frustrated in the process.

Learn to plan projects properly. Time spent planning your construction project is time that you will more than make up by avoiding project delays and dealing with issues resulting from poor or inadequate planning.

​Do you want to learn how to manage construction projects successfully? I've written several easy to read books for owners, contractors, construction managers, construction supervisors and foremen. They cover all aspects of construction management and are filled with tips and insights.
The books are available in paper and ebook from most online stores including Amazon.
Need help with your construction project or construction company? Contact me for help and advice.
To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

Many construction projects get in trouble and project managers are good at finding someone, or something to blame. It’s usually the poor estimator who cops the brunt of the blame. Listening to many construction project managers you would think that all estimators make mistakes and every construction project is only completed successfully because of the project manager’s heroic efforts. Of course, the next best thing is to blame the weather – well there’s always rain, wind, cold and heat. Poor weather is a reliable excuse. Then we have others to blame, poor subcontractors, unreliable suppliers, unskilled workers, difficult clients, and weak designers. But wait a minute, isn’t that the experience on most construction projects? What’s different?

There will be problems and disruptions on construction projects. There will be mistakes with the estimate – both mistakes that cost money as well as mistakes that add to the profits. There will be bad weather, difficult clients and poor workers. But that’s why we employ project managers to solve these difficulties and deal with problems! I can’t think of one of my construction projects that went perfectly and according to plan. But we finished them all, and in almost every case made money and had a happy client.

It’s easy to blame the estimator for under-pricing material or underestimating the amount of work. But, there are also often estimating mistakes on the positive side, where the project wasn’t as difficult as the estimator envisaged and the materials cost less than the estimator allowed.  In fact, often an estimating mistake costing project money is cancelled out by an error which is beneficial to the project – it’s a shame that you only hear about the first mistake and not the second!

Why can’t project managers accept responsibility for problems on their project? Why can’t they admit when they’ve made the wrong decisions? Why can’t they just get on and solve the problem, instead of wasting time and effort looking for excuses and scapegoats?

It seems that the easy response these days is to blame others – our politicians set good examples of this. Let’s find a scapegoat, in fact, maybe we can even turn it into a political slogan. Finding the real cause of the problem and fixing it is hard work. In doing this we might not like the real reason for the problem – like we slipped-up. We might upset or offend somebody we don’t want to offend, somebody that’s the real problem. We might not like the solution to fix it – because it could result in more work, or require some sacrifices. Company bosses and politicians are good at cutting employees and freezing wages to lower costs, but very few will take a salary cut themselves. Not sure what happened to lead by example!
​
Blaming others takes time and energy and doesn’t solve anything. A construction project that’s in trouble, one that’s losing money or behind schedule, isn’t miraculously going to come right. Because a culprit, a scapegoat, has been found doesn’t solve anything. Making noise and jumping up and down doesn’t solve problems. Over dramatising the problem also doesn’t solve the problem – it could result in panicked quick fixes that don’t work or over extravagant solutions which aren’t necessary. Throwing up your arms or having a temper tantrum solves nothing – the project that’s in trouble will remain in trouble.

​There’s a problem. What are the causes? Indeed, there is almost always more than one cause. Don’t just look at the symptoms and treat these. Sure, it rained and the construction works were flooded. What steps can we take to prevent more damage? How can we salvage the project? Solve the immediate problems and get the project back on track. Then look at preventing the problem from recurring. Why was the work flooded? Could we have kept most of the storm-water out? What should we do to prevent a similar problem occurring? You can’t stop the rain – but maybe you can implement preventative measures to limit the damage.

Let’s look at the problem logically. Find the real cause. Take action to fix the symptoms and implement steps so the problem is fixed and doesn’t reoccur. Ask for help if necessary.

Don’t try and hide the problem, because inevitably the problem doesn’t fix itself. So, the project is losing money. Why? Maybe the estimator did make a mistake, but usually, there are other reasons. What can we do to prevent further losses? What can we do to recover money already lost? If we’ve done everything possible, ensured that we have uncovered the true causes for the losses and stopped them where possible, and the project will still end in a loss, then it’s important management is informed of the losses so they aren’t caught unawares at the project finish when the project makes a loss.
​
Fixing a problem requires a motivated team. Shouting and blaming demotivates people. The team needs to pull together, in the same direction, in a coordinated effort to rectify the problem and its cause. Threats don’t help. Good communication is vital. Maintaining morale is essential. People hate working for a project or company that’s in trouble.

​Project managers need to be proactive. They should plan for poor weather – okay sure you can’t allow for a hurricane or abnormally heavy snow or rain, but you should at least have anticipated and allowed for the normal expected weather conditions. Projects should allow for the time disruptions of normal weather, but more importantly, take active steps to minimise the disruption, like planning work around the normal seasonal rain and cold, and protecting partly completed work from the worst of the weather. When bad conditions are on the way take steps to limit the damage. When there’s good weather make the most of it.
​
Anticipate problems and take steps to prevent them from arising, or at least implement measures to limit the impact of the problem.

Do you want to learn how to manage construction projects successfully? I've written several easy to read books for owners, contractors, construction managers, construction supervisors and foremen. They cover all aspects of construction management and are filled with tips and insights.
The books are available in paper and ebook from most online stores including Amazon.
Need help with your construction project or construction company? Contact me for help and advice.
To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

Most construction projects will have changes, additional work and experience delays. Where the change or delay couldn’t be anticipated, or allowed by the contractor, they can usually claim a variation and request additional time and money from the client to recompense them for the event.

But, the success of a variation claim isn’t guaranteed, and it’s up to the contractor to explain the cause of the variation, why they couldn’t have expected the event, and then quantify the impacts of the event.

Now, this might seem simple and straightforward, but, regrettably, construction variation claims which are legitimate are frequently rejected by the client, or the contractor only receives part of what they are entitled to get.
​
So where does it go wrong for contractors? Is it just because the client is being difficult or unfair? Occasionally, yes the client is being unfair and then there are usually legal steps that contractors can take when a legitimate and well thought through and presented variation claim is rejected. But, unfortunately, many construction variation claims lack substance and supporting documentation to justify the claim and the client has every right to reject the variation claim.

Most contractors only think about supporting documentation when there’s a variation claim. By then, often the construction project has been going for several months. Much of the supporting documentation must come from events and days past, in fact some even from before the start of the construction project. Missing documents, or documents that are incorrect or faulty, will be of no use to support the variation claim.
​
There are a number of supporting documents:

The construction contract document forms the basis of the variation claim. It sets out the rights and obligations of the contracting parties and it informs the contractor of the steps to be taken when a variation claim arises. Unfortunately, some contractors only read their contract document when there’s a problem. Usually, by then it’s too late. Some construction contract documents are poorly written with conflicting and ambiguous clauses, while some documents unfairly put undue risks on the contractor and remove the contractor’s rights. Contractors must remember that the contract document outlines the project rules. These must be checked to ensure that they are fair before the contract document is accepted and signed – it’s too late to find part way through construction that the rules are unworkable, or unfair, or weren’t what the contractor thought they should be. Contractors must understand what their rights and obligations are, as well as the client’s rights and obligations. The contractor must make sure that everyone plays by the rules.

The construction schedule is the yardstick against which any delay will be measured. The construction schedule should be a reasonable and logical assessment of how the project will be constructed and it should be in sufficient detail so that construction progress can be monitored and the impact of delays assessed. It should clearly indicate when the client must supply access, information, and materials. The contractor must follow the construction schedule. A poor construction schedule will make it difficult for the contractor to quantify the delay, while the contractor not following the schedule and using other construction methods could invalidate the variation claim.

Weather records are essential when the contractor claims for delays to construction caused by adverse weather. Generally, normal weather events are a risk which the contractor must accept and they can’t claim for weather events which are the norm, or the average for the project location. So, how much rain did the construction project receive and was this more than average? If the contractor hasn’t maintained accurate weather records from the start of the project they might not be able to prove the exact amount of rain that fell on the project site unless there’s a weather station near the project.

Daily logs or diaries. Often clients request the contractor maintains a daily log. But, even if they don’t, it’s good practice to maintain the diary. This log must be accurate and include the weather records, the resources on the project, construction delays and major events. Regrettably, many of these logs are not accurate and may not support the contractor’s variation claim. When did the delay start, when did it end, what did it impact?

Project meeting minutes (records) often provide a record of progress and problems on the construction project. These minutes are often written by the client or their representative, and they frequently leave out information which is detrimental to them. It’s important to check that the meeting minutes are an accurate representation of what was discussed at the meeting and reflect the actual status of the project. If there’s an error or omission in the meeting minutes then the minutes should be rectified at the time, or the issue should be addressed in writing to the client. Contractors can’t wait until they are preparing their variation claim to find that the meeting records don’t support the facts in their claim.

Personal diaries. Construction project staff often keep personal diaries recording the events on the project. These diaries can be subpoenaed by either party should a dispute arise. They may provide valuable information to support or refute a variation claim. These diaries should be an accurate reflection of events on the construction project.

Request for information or engineering queries. From time to time the contractor will have questions for the client’s team. This could include missing, conflicting, unclear, or inaccurate information on construction drawings. All questions should be in writing so that there’s a record of the issue and when the matter was raised. The answer should be in writing with a date when it was received. Missing information and errors on construction drawings are a leading cause of delays on construction projects.

Photographs provide a valuable record of the status of the project. They can be used to record construction equipment used for a particular task and also lack of access and problems on the construction project. It’s very difficult to refute a photograph with a date. Of course, the client can also use photographs to record the contractor’s errors, bad quality and poor production, which could be used to refute claims.

Drawings and documents provided when the construction project was priced. All information provided to the contractor when they priced the construction project forms the basis for the contractor’s price. If the actual construction conditions and construction drawings are different, there may be the reason for a variation claim. It’s essential the contractor safely keeps all correspondence and documentation received when the project was priced and refers back to these documents in the course of construction to ensure that they claim for any changes which add time or costs to the project.

Drawing registers. Construction drawing registers should record when drawings were received by the contractor. Regrettably, some registers record when the drawing left the client’s office, which could be a day or two before the contractor received the drawing. Drawing registers are essential to prove the quantum of a delay caused by late information from the client’s team.

Drawing revisions. Clients and designers frequently revise drawings. This could even entail the contractor having to redo completed work or order additional or changed materials. It’s essential that revised drawings are kept (clearly marked as revised so they aren’t accidentally used for construction) so they can be referred to if the new drawing has resulted in a delay or additional work.

Correspondence, which includes emails, instructions, memos, and letters. All instructions of a contractual nature (which ask for additional work, changes, or impact progress) must be in writing. Unfortunately, clients often have poor memories when it comes to money and additional time. These instructions and letters must have a date when they were received. The correspondence must be clear and unambiguous. Where necessary it may be necessary to, in writing, ask for clarity.
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Other documents could include, test results, handover and acceptance documentation, project reports, etc. All documents must be an accurate representation of the facts and the status of the project and have a date.

...Continue Reading...
​This article was first published on the ClockShark website. To visit this website and continue reading the article click on the link above.
Please share this post

For more valuable information on construction claims get your copy of the author's book 'Construction Claims: A Short Guide for Contractors' which is an easy to read concise guide to helping you win your variation claims ensuring that you are paid for all your extra work and compensated for delays beyond your control

​To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

To help you navigate the construction process and avoid the traps and pitfalls when building or renovating your home read 'An Introduction to Building and Renovating Houses - Volume 1 Hiring Contractors, Managing Construction and Finishing Your Home' ​

Many are looking to grow their construction companies. To do this you need additional people, equipment, and of course projects. Sometimes the simple solution seems to purchase another construction company and merge it into your company. But is this a good solution? Well, it depends.

I worked for a construction company which was privately owned and almost a family business when I joined them. Within twenty years the company had grown into a multinational public company with revenue of several billion dollars and profits of a hundred plus million dollars. This growth was achieved by a combination of growing the company from within, as well as purchasing other construction companies. However, not all these purchases were successful, and a few even proved very costly. But, some of these purchases provided the company with the right resources and clients to grow, as well as giving us a springboard into other markets and regions. In this growth, our company became a takeover target for another construction company, which fortunately we resisted and we eventually outstripped the size of that company and became far more successful.
​
So what did we learn from these takeovers, mergers, and acquisitions?

It’s important to carefully analyze the reasons for purchasing another construction company. Only purchase a company if it’s going to offer additional opportunities and add to the balance sheet of your company. These opportunities may be because the new company:

• Is performing poorly and you believe that you’ll be able to turn the company around and make it profitable again, turning a ‘cheap buy’ into a ‘money maker’. Regrettably, this isn’t always as easy as it seems because:
  • The new poorly performing company often demands lots of management time to turn it around. Management time which is diverted away from doing what they were successfully doing – which was running a good construction company. I’ve often seen the diversion of management to fix and embed the new company then adversely impact the performance and reputation of the original company. Know who will devote time to fixing the company and understand that they will be unavailable for other projects within the existing company for several months, and even a couple of years.
  • You always need to understand why the company was failing and what you’ll do differently to turn the company around. Unfortunately, often failing companies are failing for multiple reasons and often the true reasons for the failure, as well as the full extent of the problems, are hidden and only become apparent after the company has been purchased.

• Is working in a different region, maybe another state, and it will help your company expand into this region. Nevertheless, it’s important to first:
  • Analyse the risks and opportunities of the region. Understand whether the new company is operating successfully in the region – are there problems that aren’t obvious, or costs which aren’t accounted for?
  • Check that they are making money.
  • Understand the reasons for their success – sometimes it may just be a lucky contract or an opportunistic period.
  • Ensure that there will be further work in the region.
  • Understand whether the company will provide the appropriate spring-board to expand into the region. Are there other ways to get into the region without spending money on purchasing that company?

• Has established relationships with different clients to the ones you normally work with. However, you must understand:
  • The reasons for these relationships, since they are often built around personal relationships which can be worthless should individuals leave the client’s or contractor’s employ.
  • Whether the clients will continue to provide work opportunities.

• Has expertise in a different field to what your company has. Nevertheless, first check the following:
  • Is this expertise because of particular individuals employed by the company, and will they remain with the company after the take-over?
  • Could these individuals, or others with similar expertise, be engaged by your company at a fraction of the cost of purchasing the whole company just to get their knowledge?
  • Is the whole company expert in this field, or are you purchasing other sections and people which are less useful and may even have to be terminated later at additional costs?
  • Is the company really an expert and is their reputation with clients as good as you perceive it to be?
  • Will having expertise in this field really enhance your company’s capabilities and profits and will the purchase of this expertise earn a return on the investment?

• Has a large pool of skilled personnel. But first, ascertain:
  • Whether the personnel will remain with the company. (I’ve generally found that up to half the employees resign and leave the company that’s been bought within a couple of years of the buy-out – unfortunately, it’s often the better ones that leave first).
  • Are the people as skilled as you think they are?
  • If it would have been cheaper to attract the skilled people from elsewhere, rather than purchasing the company to get the people?
  • How many personnel aren’t good and are dead-wood who will need to be made redundant?
  • The overlap of people and functions between the companies, since it’s invariably necessary to terminate employees when there’s already a person fulfilling that function (this termination process is expensive and causes fear and resentment amongst the new company’s employees – leading to resignations and poor performance).

• Has lots of construction equipment. However, it’s necessary to check:
  • If the equipment can be utilised (remember there’s no choice and you’re paying for all of the equipment whether you can use it or not).
  • Are the items compatible with the equipment already owned?
  • Is the equipment of a similar model and make as equipment already owned? Having assorted models and makes of equipment means additional spares have to be kept and maintenance is more difficult.
  • The condition of the machines and have they been regularly maintained with service histories and records.
  • Are the warranties in place and still valid (because some may have been invalidated if the equipment hasn’t been serviced correctly or the original manufacturer’s parts haven’t been used).
  • The condition of wearing parts and tyres as there could be a large cost to replace them.
  • Are spare parts readily available for all the items?
  • Who owns the equipment – some equipment may be leased or have large outstanding loans?
  • Would it be cheaper to buy the equipment elsewhere rather than purchasing the company? This will enable you to purchase only the equipment that you need and equipment that matches your existing equipment.

• By purchasing the company you may be removing a competitor. But is this:
  • Going to be a benefit worth the cost?
  • Not going to result in another contractor taking their place?

​It’s imperative that a proper due diligence is carried out on the new company before purchasing it. This should include reviewing:

• Many of the items above.
• The financial statements and verifying their accuracy.
• All projects and understanding their safety, quality, outstanding payments, what costs and revenues have been declared and whether these are correct, potential project problems, progress measured against the project schedule, forecast cost to completion, resources, suppliers and subcontractors, the status of claims and variations, if the client is happy (review project progress meetings) and the quality of staff.
• Outstanding debtors and creditors.
• Business systems.
• Employment contracts.
• Accident and insurance claims.
• Unresolved problems on completed projects. You don’t want to find unfulfilled liabilities.
• Prices which have been submitted for projects that may be awarded to the company. Are these prices reasonable and can the projects be completed profitably? You don’t want to be buying loss-making projects!
• Operating Procedures.
• Their tax affairs.
• Outstanding guarantees and warranties.
• Labor relations and agreements.
• The numbers of personnel, their skills and years of tenure.
• Lease and rental agreements.
• Money owing on loans, equipment, and other assets.

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I’m sure we have all heard of construction companies that have expanded, become successful, revenue has increased and their profits have increased, then, the wheels have come off. Profits have fallen and share prices collapse! Some companies even go bankrupt. Where did it all go wrong?

Of course, we all know of the small local builder who kind of ‘bobs along’. They employ only a handful of people, making an average profit most years and every now and then striking it lucky with a really good year. The owner seems content. But then they have a bad year, literally living from hand to mouth struggling to pay their bills, surviving until another good project comes along. Is that what you want to be?

Yet, occasionally we have construction companies that have grown within a generation, from a one-man business to a multi-million-dollar construction empire, that often spans many states and may even have grown into a multinational organisation constructing mega projects in other countries. The company is now worth tens or hundreds of millions of dollars, occasionally even worth a billion dollars. Maybe that’s what you would like your construction company to be?

So it is possible to stay small and successful and is it also possible to grow and become successful. So how do you decide what direction your company should follow, and how do you make those decisions successful?
​
Of course, there are also many companies somewhere in between, which are growing at a steady pace, maybe even with a few contractions when work dries up, then growing again when there’re more opportunities. The one-man company possibly now has a hundred employees and there’s a steady stream of projects.
lick here to edit.

​Growing a company successfully is very satisfying. It enables the original owner to move away from being hands-on where they were possibly working in the field on the project all day, while trying to complete paperwork at night and on weekends. It allows the original owner to take management control while relinquishing some of the smaller day-to-day project management duties. It’s often less physically demanding. It allows the owner to take on other bigger responsibilities and learn new skills.

Of course, it also creates new opportunities for employees, who can grow into new roles and take on new responsibilities while learning new skills. Not many people are happy fulfilling the same functions and jobs forever – most of us want to grow and develop. As the company grows, the employees grow, and in doing so employees earn more and can better their lives and the lives of their families.

Of course, a larger company can take on more projects and work with different clients which allows them to diversify so the company isn’t solely dependent on the success of their current projects. Sure there will be some projects that aren’t profitable and the amount of work in some areas will decline for a period, but having a diversified portfolio of projects and clients, preferably covering a number of different regions, will enable the company to better survive the occasional poorly performing project and the unpredictability of the construction industry. In fact, being bigger will mean that the company executes larger projects that could extend over a period of a couple of years, which might enable the company to get through the lean times easier.

Being the owner of a small company is often a lonely job where you alone must make all the decisions, where you alone must solve the problems. Larger companies usually have experienced and skilled people that can shoulder some of the responsibilities, handle the day-to-day problems on projects, and who can provide advice for solving the more difficult problems.

A successful and well-managed construction company provides employment opportunities for many workers – sometimes hundreds or even thousands.
Of course, a successful growing construction company can make the original owner very wealthy. As the company grows it will take on projects in other regions which may bring opportunities to set-up house in another area which may be more suitable for the family.
​
A larger company means that you can take on larger projects and more challenging projects. At the end of the day building a successful large construction company creates a legacy that others will appreciate, a legacy that’s changed employees’ lives for the better.

​Many construction companies start off successfully. They develop a good reputation and are profitable. The company grows. Then the cracks appear. Quality deteriorates. Projects are no longer profitable. The company starts losing money.
Why does this happen? Well, there are a number of reasons.

• Normally construction companies start off small and the owner is hands-on full-time supervising projects. As the company grows the owner can no longer be hands-on and passes control to managers and staff who aren’t necessarily as focused on ensuring that the projects are successful, and don’t take the same pride in looking after clients and achieving quality work as the owner did.
• Sometimes the new managers are inexperienced. Small businesses often employ mediocre staff because they’re unable (or unwilling) to pay large salaries or attract good people.
• Often owners don’t delegate work correctly. They try and remain in control, but have too much other work and are unable to attend to everything, leaving projects waiting for materials, resources, decisions, and guidance.
• Clients become frustrated when the company isn’t responsive because the owner is busy attending to other business and hasn’t delegated someone else to take the responsibility of managing the project. Clients have become accustomed to dealing directly with the owner and can’t understand why the owner isn’t available anymore.
• In addition, the company undertakes more and bigger projects, sometimes resulting in them having insufficient cash flow. Lack of cash disrupts the procurement of materials and payment of subcontractors, causing delays and, in the worst case, the company goes insolvent.
• Sometimes the company experiences a rapid expansion in a boom period and employs more people, moving into bigger offices and purchasing additional equipment. Unfortunately, these boom periods are short-lived and end just as suddenly as they started. The contractor is left with excess people and equipment in offices that are too large with a high rental.

It’s imperative that the company grows in a controlled manner. The owner must gradually hand over control of various areas of the business to trusted, experienced individuals. The company must progressively increase the number and size of the projects they undertake, ensuring that they always have sufficient cash to finance their operations (including maintaining a buffer for when the unexpected happens) and sufficient resources to carry out the work.

Growing a construction company requires good people and robust systems that can handle the growth and simplify the workload. Managing a large construction company is very different to running a small company.
​
But, it must never be growth at any cost. Some business owners and managers are driven to grow the business no matter what the conditions are. Large companies have shareholders who expect the company revenue to increase every year, particularly after the company has experienced a few years of stellar growth. Unfortunately, construction has periods of growth and times when work is in short supply. It’s inadvisable to try and expand the company in times when work is limited. Use times of low construction activity as an opportunity to clear out dead wood, get rid of people who no longer fit with the company’s vision, consolidate, and importantly train and re-skill people where necessary so that the company is set for better times.

​To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

According to the Bureau of Labor Statistics, there are over 15,000 construction site injuries in the US and more than a thousand of those injuries are fatal. Unfortunately, a large number of these injuries could’ve been prevented if the people in charge put some time and effort into quick but effective training sessions and regular reminders. Moreover, during our research, we found that a large portion of these accidents are caused by the presence of heavy machinery on-site, a critical part of almost every construction site, which is why we’ve compiled a list of construction safety tips when working around heavy machinery using data from the BLS, OSHA, and CDC.

1. High Temperatures
Heat injury is a serious health problem that affects thousands of workers every year. But combine the extreme heat of the summer with heavy machinery and your construction site becomes a lot more dangerous. Metal surfaces of your machinery can easily burn workers. Your operators are at even greater risk as they might get caught out with hot instruments and lose control of the machine. It’s also not uncommon for operators to fall off a machine due to extremely hot metal surfaces when trying to dismount (more on that later).
 
The best way to avoid such injuries? Protective clothing. Workers might not be too excited about wearing bulky clothes in the heat but it’s for their safety. At the very least, they should be wearing gloves at all times. White-colored clothing, regular breaks, and water would further help in keeping body temperatures down.
 
It’s also in your best interest to know when it’s time to stop. Take a look at OSHA’s Heat Illness Prevention Campaign to learn what temperatures are safe for work.

2. Mounting/Dismounting
According to the CDC, falling is the leading cause of work-related injuries and deaths in construction sites, and falls in the construction industry are frequently fatal. In other words, you don't want your workers to lose balance and fall down in an active construction site. The stakes are even higher when there are heavy machinery, like skid loaders, working around them.
 
And what’s the most dangerous and often the most dangerous time to fall? When mounting or dismounting heavy machinery.
 
The best way to avoid such injuries? Use the three-point contact rule, according to which, the worker must maintain at least three points of contact with their hands and feet while mounting or dismounting a machine to limit the possibilities of slipping or falling.

3. Hand Signals
As useful and versatile heavy machinery is, they can be noisy and make it difficult when workers try to communicate with one another. In addition, machine operators (especially crane operators) are often positioned far from those directing the work. Not being able to understand each other can have dangerous consequences on a construction site. One way around this is to use radios for communication. It’s also what most construction sites use to overcome loud machines. But radios don’t always work and you must have a backup in case the radios stop working and your operators and workers can’t communicate with each other.
 
The backup? Hand signals. Train employees to learn and use and understand simple but clear hand signals when the need arises.

4. Regular Inspection
Machines require maintenance - no two ways about it. But the maintenance also needs to be regular or else critical signs of damage or improper fits can go unnoticed. For instance, if a skid loader’s tracks aren’t properly tensioned, it can simply walk out of its tracks and potentially hurt others nearby.
 
There are millions of other ways a lack of heavy machinery maintenance can lead to disaster in a construction site. So put in the time and effort into keeping your machines in perfect condition. Otherwise, you could be paying $991,027 - the average hospital costs for a fatal construction accident.
​
5. Training Session
A proper training session can be as short as 30-minutes. It would be enough to cover the basics of best safety practices when working around heavy machinery. A few of these training sessions will allow employees to understand the common hazards when working with heavy machinery, the correct way to inspect and maintain heavy machinery, and also teach awareness procedures to both operators and ground crew.
 
And that wraps our top 5 construction safety tips when working around heavy machinery. You can learn about these safety tips through official websites of BLS, OSHA, and CDC. ​

Have you selected the wrong contractor or subcontractor for your construction project? The contractor performed badly, with delays and poor quality? Perhaps there were hidden extra costs and their final price when the work was complete was much higher than you expected?
​
Regrettably many construction projects go badly because the wrong contractor or subcontractor is selected. Often owners or contractors are only focused on the lowest price and select the cheapest contractor who is sometimes the wrong contractor and proves to be very costly. It’s therefore important to consider the following when selecting your contractor:

• Does the contractor have the required experience to deliver the work? Don’t just take their word for it, check their references and visit their completed projects.
• Do they have the applicable registrations to do the work? Ask to see the registrations.
• Can they produce acceptable quality? Some construction projects and clients require contractors to have particular quality registrations. But more importantly, have they produced good quality work on their previous projects? Do they have a quality management system? Do they have the required people and skills to produce good quality work?
• Have they worked on similar construction projects? This not only relates to the type of construction work that’s involved but also to the type of project and client. For instance, many contractors may be able to deliver a similar project on a commercial building project in the city, but have no experience on working on remote mining or oil and gas projects which have specific requirements and require more onerous safety standards. There is also a large difference between contractors that build low-cost houses, to those that build houses for the luxury market.
• Do they have the resources to carry out the work? This includes equipment, management, and the craftspeople. If they don’t have the resources can they access the resources and will they be able to manage them?
• Do they have the financial means to carry out a project of this size? Because of the way project finances are structured, with contractors usually only being able to invoice for work once it’s been completed and then they’re only paid one month to three months later, often after the client has deducted retainage monies, contractors often experience negative cash flows on their construction projects until they are substantially complete. The larger the project the larger the negative cash flow will be. Contractors have to be financially secure, with sufficient cash reserves to withstand the negative cash flow on this project combined with the negative cash flows they may be experiencing on other projects they’re working on. But furthermore, if contractors are suffering losses on other construction projects this could cause them financial stress on the new project which could mean they can’t pay for people and materials on your project. In extreme cases the contractor could become bankrupt partway through the project, which would leave you in trouble, facing delays and additional costs, while you find another contractor to finish the project.
• How does the size of the construction project compare to the size of projects the contractor has undertaken in the past? Contractors may have successfully completed smaller projects, but managing a large project can involve different management techniques. In addition, larger construction projects require more resources and more support from their head office. Larger projects also impact contractor’s cash flow more than smaller projects do.
• What other work are they currently doing? If they are involved with other large projects they may not have the resources or the finances to undertake additional work.
• What is their safety record? A poor safety record is often indicative of poor management. But, contractors with a poor safety record shouldn’t be used on your construction project. Accidents delay projects, they result in negative publicity for the project, it usually involves lengthy investigations and masses of paperwork which takes everyone’s attention away from getting the construction completed, and poor safety could get the project stopped until the contractor rectifies the safety breaches.
• Do they have a good reputation?
• Have they got a record of being claims orientated and engaging in legal disputes with their clients? You don’t want to have to waste time arguing spurious variation claims or engaging legal experts to argue frivolous disputes. Sure there will probably be changes and additions on your project, but you should be comfortable that the contractor will deal with these in a prompt and fair manner, as you should also deal with their claims.
• Are they reliable and complete their projects on time?

It always pays to check references, who did they work for previously and were they happy with the contractor’s performance. Even visit their completed projects to see if you’ll be happy with the standard of work. Past performance, however, is not always indicative of how a contractor will perform on a project and I have, on occasion, had good contractors perform poorly on my project due to them being over-committed on other construction projects, which meant they had insufficient and poor quality resources for my project.
​....Continue Reading.....
This article was first published on the ClockShark website. To visit this website and continue reading the article click on the link above.
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​To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

​Most of us know the risks created by asbestos and how asbestos related disease has impacted the health of people around the world. Unfortunately not everyone is aware of the products that contain asbestos, so even now there are scores of people who are inadvertently exposed to asbestos every year. Asbestos was formerly used in many products including insulation, floor coverings, electrical boards, and more. People renovating or demolishing buildings more than 30 years old must take precautions and check to ensure they know what products contain asbestos, and then ensure these are handled and disposed safely.

But asbestos isn’t the only silent lung killer. Indeed there are more and more workers in the construction industry being struck down by silicosis. This is caused by breathing in silica dust. Silica dust is created when masons cut materials like concrete, masonry, sandstone and granite. The disease isn’t curable and results in permanent scarring of the lungs. Silicosis is a debilitating disease making even minor physical activity near impossible, and severe cases lead to death. For more read this report.

A relatively new source of silica dust is the use of engineered stone kitchen bench tops and bathroom vanity slabs. According to this report engineered stone consists of 90% silica. These tops have to be cut to size and holes are cut and drilled to accommodate the installation of sinks, cook-tops and plumbing fittings.

In Australia, where cases of silicosis have increased by 50%, new laws are being introduced to reduce the amount of dust exposure, but these probably don’t go far enough since many workers are exposed to silica dust over prolonged periods of time.
In the US, according to a 2015 report from the Centres for Disease Control and Prevention, some 2 million workers are exposed to silica dust, with the highest risks being in mining, quarrying, stonemasons, tunnelling and construction, with many of these workers facing high exposure.

​Want to read more construction management tips and insights? Read 'Successful Construction Project Management: The Practical Guide' by Paul Netscher

​Damaging utility lines (gas, electrical, water and fibre optic cables) can be dangerous when it involves gas and electricity and it’s expensive to repair broken lines. In addition, it often disrupts the construction project while repairs are carried out, possibly resulting in delays. Damaging utility lines may also disrupt services to the client and the neighbours. What a fine way to start a construction project – upsetting the neighbours and the client at the project start because construction work cut their power or water.

It’s imperative to locate all the existing utility lines and clearly mark them, then ensure that all workers are aware of their presence. Unfortunately on several of my construction projects, even though the location of utility lines were known, workers were careless and still managed to damage them.
​
Workers must take care when working near these cables and pipes, even excavating by hand close to services. If there’s any concerns that the pipe or cable has been damaged they should immediately notify you. Sometimes a cable or pipe is only slightly damaged and the problem isn’t reported or detected. These damages only become apparent after work has happened over the lines, possibly concrete slabs have been poured over the area, even complete buildings have been finished. Damaged cables may eventually blow when the ground is wet, or water from a leaking pipe may finally become visible on the surface. Finding the problem at this stage is difficult and expensive, involving digging up the completed work to get to the problem.

​Overhead electrical cables are dangerous, and care must be taken that equipment doesn’t come in contact with the cables. In a recent accident in Australia one person was killed and two injured when a crane came in contact with power cables. Even steel items coming within two metres of a live high voltage electrical cable can cause a flash over of electrical current, which will damage equipment and cause serious injury to operators or workers. Workers carrying long metal items (such as aluminium ladders or reinforcing steel) shouldn’t come in contact with overhead cables. Low overhead cables should have a marker line at least a metre below it to highlight and protect the cable. Where possible the authorities should lift or move overhead cables which obstruct or restrict construction work.

Regrettably, even newly installed utility pipes and cables on the project are often damaged by workers who are digging or drilling in the vicinity and haven’t been informed of the cables and pipes.
​
I’m sure most of us have had water pipes and power cables damaged on our construction projects. What’s been the worst result?

​Do you want to learn more construction management tips and advice - read 'The Successful Construction Supervisor and Foreman'. 
This is what one reader said: "I have read this book and I found many practical lessons for those interested in construction Projects. I strongly recommend it to Project Managers, Construction Managers, Senior and young Engineers. They will avoid many mistakes that I have done unfortunately during my career on many construction sites. Good lecture and many thanks to the Author".
© 2019 This article is not to be reproduced for commercial purposes without written permission from the author.

Recently the sports world was rocked by the death of a young former football star who died from heatstroke. See the reports from the BBC and CBS news.

World temperatures are rising and recently parts of Europe and the USA have experienced some of the hottest recorded temperatures. This last summer Australia also experienced record breaking temperatures.

So what can we do about heatstroke? Well this report from the BBC tells us more about the effects of heat on the body.

Those in construction are at particular risk of suffering heat related illnesses since they are often expected to do hard physical tasks for long hours, often out in the open.

​It's important that everyone on your construction project is aware of the risks that high temperatures pose. Everyone must be aware of the early symptoms of heat exhaustion so they can take quick corrective action before the situation deteriorates to full heatstroke. There should always be an adequate supply of cool fresh drinking water and workers must be encouraged to drink lots of water. Workers must be allowed to take frequent rest breaks in a cool environment. Where possible try and start work earlier when the day is still cool. Possibly schedule some tasks for the night - particularly pouring concrete. Rotate workers so that one worker isn't working on a strenuous task all day.

Be aware that people on medication, those taking drugs or consuming excess alcohol and caffeine may be more susceptible to suffering the ill effects of high temperature. Those use to working in more moderate and cooler climates are also not as use to working in hot conditions as others may be who have become acclimatised to these conditions, so it's important to understand that people will be impacted differently by the heat. 

High temperatures will impact productivity, but the construction schedule should not endanger people's lives. Extreme temperatures above the norm may be reason to lodge a variation claim with the client.

Of course heat doesn’t also impact people’s lives it can impact concrete and other products. Concrete, mortar, adhesives and paints will all dry out rapidly, which could lead to problems with finishing the work as well as cracking and other problems.

Take adequate precautions to ensure that heat doesn't endanger safety or impact quality on your construction project. Working in a cool office may insulate you from the severe heat while others on the project have to deal with the full impacts of the hot temperatures.

How will your construction project deal with the high temperatures?
© 2019 This article is not to be reproduced for commercial purposes without written permission from the author.

Do you want to learn more construction management tips and advice - read 'The Successful Construction Supervisor and Foreman'.
This is what one reader said: "I have read this book and I found many practical lessons for those interested in construction Projects. I strongly recommend it to Project Managers, Construction Managers, Senior and young Engineers. They will avoid many mistakes that I have done unfortunately during my career on many construction sites. Good lecture and many thanks to the Author".

​The potential for major consequence in projects doesn’t get much riskier than a construction project, where there is a fine line between minor/moderate consequences and major/catastrophic consequences. Arguably, the most important part of construction management is the risk assessment, as keeping the company, your staff, surrounding bystanders, stakeholders and you safe is pivotal in achieving a successful construction project. 
 
The question that should always be asked before construction proceeds is: “What are the risks?”. The answer to this question changes with every construction project, as different problems arise all the time, and problems you may have experienced on some construction projects may not appear for other projects, while other risks which weren’t previously a problem become potential hazards now. So, what are some of the risks you need to look out for? Continue reading and I will instil some risk assessment wisdom upon you with this short list. 

• ​Natural Hazards- This is something that can occur at any location, any time and to anyone. It may seem easy to diagnose certain hazards such as the potential for earthquakes for a project in Los Angeles near the San Andreas fault line or building in Florida where there is an increased risk of hurricanes and floods, however, there are certain natural hazards that aren’t always obvious because they aren’t visible. Take this article by the BBC as an example, it talks about how sinkholes are proving to be deadly in Florida, especially as they are so unexpected. This is something that could be easily avoided through an underground GPR survey to make sure you are better safe than sorry. 

• Financial Risks- You must be sure that everything has been taken into account in terms of budgeting and cost control, this includes; capital items, expenses, consumables, accommodation and of course, resourcing. There are different costs within these criteria too (Direct, Indirect, Fixed and Variable costs), so after you’ve run a risk assessment for your budget, it’s crucial you have a contingency budget/plan for if any of the risks you’ve identified occur. The identified risks could range from the rate of inflation changing, or a lack of funding from external bodies.

 

• Performance Risks- There are a few different performance risks that could occur, however, these risks all whittle down to “how productive is the project?” This includes both Labour and Equipment productivity, as well as how conduct at work and within the project is affecting your productivity. Whilst productive labour is fairly self-explanatory, the productivity of construction equipment is a bit more complicated. For example, how do you know if the project’s materials are truly sustainable for both the structure and the environment? The only way to know is to research before you buy.

 

• Security Risks- The definition of security is: “protection, or a condition of safety, from hostile, aggressive or unwanted situations, events or forces”. It is important to note the unwanted part of this sentence as many people just lump security into being physically safe. Whilst this is a big part of it, we must also look at the cyber aspect of security, as the ever-growing world of technology makes these risks more dangerous than ever. My personal advice for assessing security risks is to never overlook cyber security as it could turn the whole company on its head overnight and you never know what hackers are capable of.

 

• Political & Legal- These are the types of risks that don’t intrinsically jeopardize anyone physically, however, the impact can still be as ground shaking to construction projects if these risks are not accounted for. For example, you need to make sure you are following environmental procedures and have a sustainable construction project. This could result in various legal ramifications you are not following the law regarding these regulations. Politically, you need to make sure your staff are happy, as anything that could potentially rock the boat could also result in strikes and work stoppages, or even worse, public disorder.

 
If I was to list every single construction project risk you need to look out for, this would be a long list. However, hopefully this post helps open some eyes to the plethora of problems that can arise in construction projects so that you can be prepared for some of these issues if they were to crop up.
 
BIO: Kevin Banks is the director of KB GPR surveys. He has many years’ experience in the GPR sector, and his staff come from a range of backgrounds, so they can deliver a unique service which is efficient, cost effective and accurate.

I'm sure you all have examples of construction projects which have cost a fortune and now lie unused and un-maintained.  The World is littered with mega failed construction projects which often were built for political gains or to satisfy egos. The wrong project built in the wrong place. Projects that cost the public a huge amount of money and now there's no money to maintain the new facility. Money that could have been better spent elsewhere. Classic examples of poor project management.
Read this ABC News story about a $120 million airport that is empty most days of the week and a $500 highway to nowhere. Million dollar gambles with public money which may never payoff. Infrastructure which cannot be maintained.

The number of extreme heat days will rocket across the US, according to a new climate change report which predicts hundreds of cities experiencing month-long temperatures above 100F (38C) by 2050.
Roughly 80% of Americans live in cities, equating to around 262 million people. Cities are almost always hotter than the surrounding rural areas, thanks to the urban heat island effect.
These heat islands are caused by numerous factors, such as trapped waste heat, concrete structures and pavements absorbing the sun and tall buildings blocking the wind.
All of these components contribute to air temperatures in cities that can be up to 22F hotter than neighbouring regions with less urban development.
A warming planetary climate means temperatures in heat island areas will continue to rise, with desert states such as Texas, Nevada and Arizona particularly affected.

Read how city planners, architects and construction engineers are helping make cities cooler in this article from the BBC

Interested in learning more about project management and how your projects can be more sustainable? 'Construction Management From Project Concept to Completion' takes you through all the phases of construction projects from the concept and planning phase ensuring you build the right project in the right place. A project that will yield the best results through the life of the project.

Even building the right house in the right place can radically reduce your energy costs and make for a more pleasant home for you and your family. For design ideas for your new home read 'An Introduction to building and Renovating Houses Volume 2 Finding Your Ideal Property and Designing Your Dream Home'

There has been an "unacceptable" lack of accountability over the delays to Crossrail, a report has said.
Crossrail, Europe's biggest infrastructure project, had been due to open in December 2018, but will not now open fully until 2020 at the earliest.
Three emergency cash injections have seen the cost of the route rise from £14.8bn to £17.6bn.
The Department for Transport (DfT) said it "absolutely rejects" claims there was insufficient oversight.
Both the DfT and Transport for London (TfL) are joint sponsors of the project, which is run through an "arms-length" body, Crossrail Ltd.
Read further the BBC's report
and
Also from the BBC 
London's Crossrail project will probably go even further over budget, according to a report by MPs.
Commuters have been "let down" by a programme that is well behind schedule, the Public Accounts Committee said.
MPs said they were "sceptical" about the Department for Transport's "ability to oversee major rail projects".​
Crossrail in numbers

• £14.8bn expected cost in 2010
  
• £17.6bn expected cost as of 2019
  

• December 2018 Original scheduled launch
  
• March 2021 Current expected completion, without Bond Street
  
• 15,000 people have worked on Crossrail
  
• 60 miles Distance of the line from Reading to Heathrow
  

​This construction project management book is essential reading for project owners and project managers who are planning construction projects which will save time and money and ensure that the project satisfies all the owner’s requirements with minimal fuss.

When a design error leads to the collapse or serious damage of a structure construction companies face the wrath of the public as well as possible legal action. Inevitably there will be damage to the contractor’s reputation.

Construction projects completed on time and under budget aren’t unheard of, but they’re often the exception rather than the rule. According to an Economist feature story, America’s construction productivity halved in the last 50 years — being the worst-performing industry. Home to some of the world’s largest construction firms the U.S. is a construction powerhouse second only to China, but regrettably still an industry with a disturbing over-reliance on labour when technology should be playing a bigger part.

But this is only part of the problem. Construction projects are often beset by poor quality, unsafe worksites and design faults.

There are several reasons for these issues, and one of them is the slow adoption of technology. Construction project managers are tackling evolving infrastructure demands, often an increase in paperwork, a shrinking skills pool, new methods and technology, cost pressures and more demanding clients. Regrettably when contractors employ technology and new systems to help them they often select technology based on price or which supplier gave the best demonstration, even when the technology or system isn’t necessarily the best fit for the company, client or project. Another issue is that contractors are notoriously bad at training their employees on how to operate and employ new technology and systems. Then, when there are failures the technology is blamed and is abandoned, often at enormous wasted expense. Contractors and clients are often wary of introducing new technology and systems to their construction projects based on their previous bad experiences, as well the high cost of setting up some of the technology. In the end the overall benefits of many new technologies aren’t seen on construction projects.
In this era the new generation of workers have literally been born with a smart phone or device in their hands. It’s an everyday tool in all parts of their life. Yet, when they enter the construction industry they often find that many of the systems they are expected to use are paper based. For a technology influenced generation entering construction may seem like a technology desert, so many millennials leave the industry to work in more tech-advanced fields. This contributes to labour shortages in the construction industry making it harder for construction companies to operate.

In the history of construction project failures some of the most persistent failures come from the most obvious causes. The construction industry seems slow to learn from mistakes and to implement strategies to prevent them from reoccurring.

Below are some of the more common construction problems:

Unclear design specifications create problems at a jobsite. Clients don’t always adequately articulate project requirements and outcomes so that contractors and owners can have the same expectations and work to a common goal through the project until project closeout.

Contractors, designers and the client working together from the start of the project helps minimise issues and ensures a successful project though the full lifecycle of the project.

The latest investigation by the U.S. Department of Labor’s Occupational Safety and Health Administration attributed the collapse of the Florida University pedestrian bridge to faulty structural design. As cracks formed on the concrete truss, they weren’t regarded as safety concerns by the engineer on record. Upon investigation, it was found that the truss was a non-redundant structure whose diagonal members needed to be secured since the risk of a collapse would be high if even one member failed.

Some other common design errors include:

• Miscalculating cross section of structural members

The value of structural elements can be miscalculated or miswritten by an engineer. Even if one value is incorrectly entered it can add up to a big calculation error that’ll be irreparable if unnoticed during construction.

• Miscalculating reinforcement amounts in concrete members
• Failing to maintain the completed structures

Over time, materials can develop metal fatigue when subjected to repeated or fluctuating stress. They deteriorate through normal wear and tear and extended use and when unchecked cracks can form. Even a small extra force can cause a structure to come crashing down.

Prevention tactic: Critically evaluate design specs with designers/architects by double-checking values of structural elements and adopting appropriate building standards. A good review of each installation will ensure the structure has been designed correctly. Appoint professionals to oversee each installation.

Construction plans outline project specifics that go beyond just laying out work breakdown structures. Essential components include:

• Risk assessment reports
• Risk management strategy
• Site-specific safety plans
• Contingency plans
• Site logistics
• Delivery schedule of materials and equipment

​Prevention tactic: Most construction plans lack adequate information when unexpected problems occur. While planning the development of a building construction managers need to work closely with safety managers, risk analysts, and all contractors to document a contingency management strategy.

Do you want to learn more construction tips and insights? Ensure your project is a success. Read 'Construction Management From Project Concept to Completion' available from Amazon and other bookstores.

​Overview
Big Data since its emergence in the construction industry has brought significant changes from safety to productivity. Areas of the construction industry where Big Data can be useful include resource tracking and management, improving the decision-making processes, budgeting and costing, and reducing project risks. The construction industry is known for waste, poor productivity and rework. Yet the industry has been slow to embrace new technology.

Big data has given a positive impact to the construction industry and reduced the cost of waste and remedial work, thus boosting the profit margins of construction companies. Many companies are trying to change their business model to adopt big data technology.

The earlier scenario of the construction industry storing data was complicated as everything stored was on paper and filed once the project was completed. Construction now has a surplus of data but lacks a good tool and algorithms to process the data properly. Big data as the name suggests uses the large amount of data and analyzes and implements it in the right manner.

Technology such as drones, wearables, smartphone sensors on job site, and GPS systems are evolving in construction with collaboration of Big Data Analytics, which can store data easily and can access it from anywhere. When big data is merged with machine learning systems the future outcome can result in competitive advantages to the construction industry as data collected can be processed and analyzed for future estimation and bidding.

Data collected such as tracking data of workers through smart technologies, tracking of material and equipment through sensors, etc. must be captured in a structured way to make the data easily analyzed by right systems.
​
Data is collected from an internal and external source such as labor hours, material used, daily production, operational data, and more. BIM Clash Detection Services data is collected and construction data for scheduling task and logistics data. 

Big Data in the construction industry has brought some changes that aid in the overall productivity of the construction process.

It enhances productivity: - Big Data aids in improving productivity in the process of construction projects. To make the job site more effective, wasted time in moving materials, people and equipment around the project site can be reduced. Technologies such as drones and wearable devices can be used here along with big data to track the materials or things that are moving about the construction site. Workers can be tracked and supervised through technology and this data can be beneficial to reorganize the site to make tools and materials more accessible to them. It will ultimately help the workers to perform their tasks better. As productivity is increased risk is reduced and construction companies can maximize their ROI on the project.

Creates effective Budget estimates: - Construction companies can leverage the major benefit provided by Big Data to improve planning of material, process flow, software to be used, etc. With data captured on the allocation of resources, construction processes and safety measures it can help to save construction costs and enable contractors to have a better idea about the costs to be used and the schedule of tasks performed. 5D BIM Services helps construction companies calculate the budget estimates on the material used, workers and their safety measures and more.

Safety Management: - Safety on the job site is of the utmost concern for construction companies where Big Data is helping them to improve their best work practices. Once data is adequately collected and analyzed it can reduce the risk of accidents. It helps the implementation of changes to ensure safety risk is minimal for all workers. Software that the construction companies use here must be chosen carefully as it helps to monitor the workplace environments, materials, equipment, etc. that may lead to risk.

Reduces project risks: - Some variables such as weather conditions, material quality, communication among the workers, etc. used by the construction companies can often be out of the control of managers and workers. Construction companies can simulate project risk and mitigate them before construction work begins. It can lead to reducing the chances of having accidents and injuries on the job site.

Make better decisions: - Big Data Analytics often help construction companies to improve business decisions. Collecting the correct data and the right people can transform and give better insights into construction projects. Through data, construction companies can be more informed allowing for quicker decisions. Big Data also helps in project management software.

Make everyone stay connected: - All the construction trades can stay connected all the time through technologies and can access data from it and update real-time projects any time. Virtual meetings conducted between construction trades helps them to communicate easily and at any time.

Conclusion
Big Data Analytics will become an important tool in the construction industry in the coming years as it helps companies capture, collect, and analyze data in a more structured manner, so that all the construction professionals involved in any project can plan the process, safety measures of their workers, material allocation to eliminate wastage, and ensure communication with team members at any time and update real-time data of the project in the software used. It helps to make better and quicker decisions along with reducing the project risk that can delay construction work.
​
Author Bio
Vishakha Jadav is a Content Writer & editor at Tesla Outsourcing Services. She has a knack for writing about construction news, technology trends, and numerous services. Tesla is a BIM & CAD Outsourcing Company that works with clients globally to cater to them with reliable BIM Services, CAD Services, Point Cloud to BIM Services & 3D Rendering Services.

Want to read more construction management tips and insights? Read 'Construction Project Management: Tips and Insights' by Paul Netscher

Construction companies regularly go from times of too much work to times when work is scarce. Unfortunately, the times when work is scarce are often far longer than the good times. Then, when work is won, it’s sometimes at the wrong price.

Finding construction projects to price, then pricing them correctly is the most important job for construction companies. Yet, many companies don’t place sufficient importance on this task. Often projects are priced in a rush, or it’s left to a junior estimator. Some contractors price everything and anything, with little thought to the best construction methods to undertake the project, or indeed the best methods to win the project.

Winning a new construction project is sometimes pure luck, or because the estimator made a mistake.
​
Pricing a construction project correctly, and then winning it is a skill and an art, and it’s definitely a team effort and should never be left entirely to the estimator. Indeed pricing and winning a project starts long before the estimator begins pricing the project.

1. Good construction market intelligence.
It’s vital to understand what new construction projects are coming up in the near future. Where are your competitors working? You don’t want to be winning a risky project at a low-profit-margin when better projects could be just around the corner. But good market intelligence also means that you can be talking to the client before the construction project is offered to other contractors to price.

You can make sure that you will be invited to price the project. You can even start some preliminary work. In one case I managed to persuade the client to negotiate a major construction project only with us, rather than them asking us plus other contractors to price the project - so I managed to exclude other contractors from competing.

2. Build a good reputation.
You’re not going to win projects if you have a poor reputation. Reputation is based on delivering quality work, safely, on time and with minimal fuss.

Some clients will pay a premium to employ a contractor that they have confidence will deliver their construction project successfully.

3. Build relationships.
Build relationships with your clients. Repeat business is often the best business. Some of our clients awarded projects to our company on the condition that we allocated construction teams to the project that they had previously worked with.

Most of our construction projects were for clients we had previously worked with. Having a good relationship with a client may also mean that they recommend your construction company to others.

4. Pick the right construction projects to price.
Don’t drown your estimators with projects that you can’t win, or projects that have high risks and low rewards. Pick the construction projects that will be good, then put every effort into winning those projects.

5. Understand your competitors.
Who are your competitors? Are they desperate for work? Is this the type of construction project they like pricing? Are they working in the area? Do they have a good relationship with the client? Will they be competitive? Do they usually beat you?

Indeed sometimes it may not be worth pricing a construction project if the opposition has a good working relationship with the client, or they have a competitive advantage. Don’t waste your time pricing a project you’re probably can’t win. Spend time pricing construction projects you have a reasonable chance of winning.

6. Understand your client.
Do you know what’s important to the client? If they are very safety focused, then make sure that safety is highlighted in your price submission. Show them that safety is important to your company and demonstrate how you will build their project safely.

Of course, part of understanding the client is to know that they have money for the project and they don’t have a reputation of withholding payments from contractors or engaging in legal disputes – you certainly don’t want to win a construction project where you might not be paid for your work!

7. Understand the construction project.
This is obvious, yet some contractors don’t always understand the project scope or risks. What are the risks? Can you complete the project in the allotted time? Visit the project site. Read through all the pricing and project documents.

8. Be Strategic.
Is there an alternative construction method? How can you make your price cheaper, but not lose money? What will make the client select your construction company over others? How can you win the project at the right price?

We won some construction projects by submitting alternatives solutions to the client – the client got a cheaper price, we won the project and we made a bundle of money.

​This article was first published on the ClockShark website. To visit this website and continue reading the article click on the link above.
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​To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

This construction project is 7 Years late, 3 times over budget and at one stage had half a million defects.
Learn why this construction project has cost nearly 6 billion Euros and still has not opened to aircraft 7 years after the airport was due to open. Read...

or Listen to the Berlin Airport fiasco

Learn how to avoid construction fiascoes. 
Read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

Today social media is prevalent and almost everyone uses it – politicians, presidents, and even pets.

However, many construction companies aren’t familiar with the benefits and problems that social media can bring to their company.

​Contractors work hard at building a good reputation. They sometimes spend huge amounts of money on building their brand, their websites, and their advertising. Unfortunately, this can all be for nothing, or can be destroyed quickly by poor media, an accident, bad workmanship, an unhappy client or a disgruntled employee. Small incidents can be quickly blown out of proportion and be viewed by tens of thousands.

Social media can be a valuable advertising tool for:

1. Attracting new clients, advertising the company.
2. Attracting the best talent, the best employees. Many young people spend hours on social media. They are attracted to successful companies and construction companies that use new equipment and technology, undertake winning projects and which use unique construction methods.
3. For engaging employees. Employees want to know more of the company's successes. They want to know that they are working for a successful contractor.

Implement rules for employees to regulate when they can use social media during working hours.

Encourage employees to use social media to show the company’s achievements.

Employees should know what are unacceptable posts which won’t be condoned. Employees shouldn’t engage in behaviours that could bring the company into disrepute on social media. Employees shouldn't be posting pictures of them in company uniform, using company vehicles or equipment, or on your construction project which show them or the company in a poor light.

Managers must avoid engaging in disputes and arguments on social media with unhappy clients and employees. Rather contact the person directly to resolve the problem. Engaging in public disputes often inflames the situation and gains more bad publicity.

Always stick to the facts on social media and avoid emotive and slanderous language.
Ensure that the company has a visible presence on social media and that this is kept up to date and always portrays a professional image.

Update employees and clients on new construction projects, important project and company milestones, and employee successes.

Ensure someone is keeping track of what’s said on social media about your construction company.
​
Don’t be too hasty posting a comment or an update on social media. Consider how others will view the comment or post. Have others in the company check your post before sending it out. An inappropriate social media post has tripped-up many politicians and companies.

​To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

If you are aiming to be a successful construction supervisor, foreman or superintendent try this simple self-evaluation. We completed the first half of the assessment in Part 1 and Part 2 and Part 3.
Today is part 4 - our final part.

​Want to learn more about becoming a successful construction supervisor or foreman, or maybe you want to learn more about construction management, read some of the author's practical easy to read construction management books.

​To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below. <=== Click on the image to read a preview of this book on Amazon 

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'

If you are aiming to be a successful construction supervisor, foreman or superintendent try this simple self-evaluation. We completed the first half of the assessment in Part 1 and Part 2
Lets continue with part 3:

​Look out for part 4 of this self-evaluation.
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© 2019 This article is not to be reproduced for commercial purposes without written permission from the author.

​Want to learn more about becoming a successful construction supervisor or foreman, or maybe you want to learn more about construction management, read some of the author's practical easy to read construction management books.

​To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below. Click on the image to read a preview of this book on Amazon ===>

• '​Successful Construction Project Management: The Practical Guide'
• 'Building a Successful Construction Company: The Practical Guide'
• 'Construction Claims: A Short Guide for Contractors'
• 'Construction Project Management: Tips and Insights'
• ​'Construction Management: From Project Concept to Completion'
• 'The Successful Construction Supervisor and Foreman'
• and 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'