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What can you do?
Construction projects, no matter how well they are managed, will inevitably have delays, variations and changes which aren’t due to a fault of the contractor and couldn’t have been expected, allowed for or mitigated by the contractor. Most contract documents allow the contractor to claim the additional time and costs resulting from these events. Unfortunately some clients take the approach of not responding to contractor’s variation claims. This is often because the person administering the contract doesn’t want to raise the claim with their manager as it may reflect poorly on their project management skills. Other clients hope that by leaving the claim it may just go away, or that they can take all of the claims at the end of the project, put them in one basket and negotiate a once-off settlement with the contractor – a contractor who at that stage of the contract will be desperate just to get some money from their claims. Sometimes clients don’t agree to the contractor’s claims because they, in the meantime, are preparing a claim against the contractor which they’ll then use to offset the contractor’s claims. This approach is dishonest. Unfortunately most construction contracts specify a time for the contractor to issue a variation claim but very few specify a time by when the client has to respond to the contractor’s claims. This approach is unfair to the contractor since if the claim isn’t approved it won’t be paid, which disrupts the contractor’s cash flow. It also leaves them in limbo not knowing if they’ll be paid at all for the work, which means they could be facing a project loss, which could, in the case of large claims, have a devastating impact on the company. Furthermore, unresolved extension of time claims may mean that the contractor doesn’t complete the project within the original approved time period, thus allowing the client to impose damages or penalties for the late completion. How unfair is that? The contractor has a legitimate extension of time claim and they not only aren’t paid for their costs they incurred as a result of this claim, but, they are further penalized by having to pay damages – all because the client hasn’t responded to their claim! This puts the contractor in a quandary and they aren’t sure if they should accelerate the work (if that’s possible), thus incurring additional costs, but possibly completing the project within the original time and thus avoiding penalties. Of course the contractor hasn’t been instructed to accelerate so they possibly won’t be paid these acceleration costs. It’s important if the contractor decides to accelerate to try and meet the original contract completion date that they advise the client in writing that they are accelerating because the client hasn’t responded to their extension of time claim and is still insisting that the contractor completes the project on the original completion date. This letter should clearly state that there will be additional costs. The contractor needs to keep note of all the additional costs for this acceleration and invoice the client monthly for them. Also, as long as claims aren’t resolved there is a risk that the client’s budget may be overspent when the claims are finally resolved which could result in the contractor not being paid for the claims when they are finally agreed. Furthermore, often later variations are dependent on attaining a resolution for an earlier claim. As long as the first claims aren’t resolved contractors have to base their later claims on the assumption that their first claims were unsuccessful. This becomes messy and when the first claims are eventually agreed it may require the later claims to be reworked taking the earlier claim into account, and resubmitted, which takes time and causes confusion. Contractors need to make every effort to get their client to resolve their variation claims as soon as possible. .....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 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 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 Order your books from Amazon Order your books from Amazon UK © 2016 This article is not to be reproduced for commercial purposes without written permission from the author.
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Unfortunately far too many construction subcontractors end like this. Will you be one of these contractors?
Subbies squeezed from both sides....Read....  Image courtesy of Stuart Miles at FreeDigitalPhotos.net Why is good quality construction important? This seems an obvious question! Of course quality is important on our construction projects! But then why do we continually see projects completed which are poor quality? Is it because people:
Saving money is also a poor excuse as the cost of completing poor quality work is usually the same as doing the work correctly - but rectifying poor quality work results in additional costs. Why good quality construction is important Unfortunately our employees often don’t understand the importance of good quality work. They don’t take pride in their work. It is important that management doesn’t except poor quality and don’t walk past work that’s unacceptable. Equally important though is to acknowledge good quality work and compliment those that have produced good quality. Poor quality work costs money Rectifying poor quality work costs enormous amounts of money to repair and rectify. Various research papers have quoted figures of between 5% and 15% of project costs are caused by poor quality work. Not only is there the cost of repairing the defective work, but there are often the additional costs resulting from the delay to the project. Rectifying completed work often impacts adjacent items meaning that there’s usually more to fix than just the item that wasn’t acceptable in the first place. Clients are also entitled to deduct money for work that they can prove is not according to specifications or which is of an unacceptable quality. Poor quality work delays projects Rectifying defective work takes time and also takes resources away from other parts of the project. A project can’t be handed over until all of the defects and snags have been completed and rectified. Poor quality work loses customers Contractors are only as good as their last project. Poor quality work on one project can quickly destroy client relationships. News of poor quality work can swiftly spread to other potential customers. Poor quality work can become a newsworthy item. Social media can rapidly spread pictures of poor quality. Our completed projects are advertisements for our company. Poor quality work disrupts cash flow Usually contractors don’t get paid until the client is happy with the work and all snags or punch-list items have been completed. The non-completion of items can delay the release of retention monies as well as the release of bonds and sureties. Companies need to receive their money as soon as possible to pay their employees, suppliers and subcontractors. Disrupted cash flow can mean bills aren’t paid which will lead to unhappy employees, suppliers and subcontractors and even lead to bankruptcy. Poor quality work causes accidents There have been many cases of completed buildings and structures collapsing because the construction was done poorly. Reinforcing steel was omitted, the wrong strength concrete was utilised or inadequate foundations were constructed. These collapses can often be spectacular resulting in many deaths and feature prominently in the media. But even when poor quality work is discovered during construction the rectification work can involve hazardous demolitions. Sometimes reaching the defective item is difficult, especially when it is detected after access has been removed. Rectification work is often done in haste and could involve unsafe practices. Poor quality work harms the environment
I’m sure we’ve all seen the discarded rubble heaps on construction projects. Often this rubble is the result of poor quality work which has had to be demolished. All this detritus ultimately ends on the trash dumps. Materials and energy have been consumed to produce the poor quality product and more energy is consumed to bash it down so that the work can be redone correctly. All of which has a negative impact on the environment. Poor quality work can lead to employee unhappiness Poor quality work leads to defects. Unfortunately it’s often not the worker that produced the poor quality work who has to rectify the defect. We all hate cleaning up someone else’s mess! Those employees left to close out punch or snag lists aren’t usually very happy. Demolishing defective work can be demoralising for the team since most construction workers want to build things and see progress. An unhappy client isn’t a nice client to deal with. Clients that face a poor quality project can be difficult and cantankerous (and rightly so) and they often look for other faults. Poor quality work can make recruiting good people difficult Employees want to work for companies with a good reputation. Invariably companies that produce poor quality don’t have the best managers and skilled people. Youngsters want to work for a company where they’ll be taught by good people. Who wants to work for a company where you are going to be facing abusive clients unhappy with the quality of their project? Who wants to work for a company when your job may result in you going back to fix mistakes on other people’s projects? Working for a company with a poor reputation doesn’t look good on your CV. Good people are proud of their work. Poor quality work teaches bad habits When management accepts poor quality work this poor quality becomes the norm. The workers who have produced the poor quality work will invariably repeat that standard of work on other projects. Junior and new employees will assume the poor standard of work is acceptable and will assume it is standard practice in the company, and will repeat the same poor standard elsewhere. Poor Quality work leads to problems later Patching something often results in a weak point which can lead to a failure later. Many contractors are called back to projects during the defects liability period to repair items that weren’t constructed correctly in the beginning, or items that were ‘patched’ during construction and the repair wasn’t done properly so hasn’t lasted very long. Sometimes these poor repairs lead to other problems and impact other parts of the structure making the repair job even bigger and costlier than if the repair had been attended to properly in the first place. Poor quality work on one project negatively impacts other projects Often resources are meant to move onto other projects but are tied up fixing defective work and closing out snag or punch-list items. This has a knock-on effect on the next project that is left waiting for resources, which then delays that project. Conclusion There is no excuse for poor quality work. Indeed there are many reasons to produce good quality work. Our clients are paying us to produce a quality product that conforms to their specifications, their scope of works and their expectations. They would like to be proud of their new facility and have many years of use from it without the inconvenience of repairing defective workmanship. But as important, is that the completed project is an advertisement for your company. You should be proud of the completed project, and it should be one you are happy to show to your children. Your employees should be equally proud to be part of a successful and quality product. Why is good quality work important to you? This article is adapted from information in the author’s popular books: 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide'. 'Construction Claims: A Short Guide for Contractors' has just been published. These books are available on Amazon and other online book stores. Paul publishes articles regularly on LinkedIn and his website. Paul writes regular articles for other websites, gives lectures, mentors, and is available for podcasts and interviews. © 2017 This article is not to be reproduced for commercial purposes without written permission from the author. The use of drugs and excessive consumption of alcohol is a growing problem on construction projects. It can lead to:
What can we do? .....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 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 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 Order your books from Amazon Order your books from Amazon UK © 2016 This article is not to be reproduced for commercial purposes without written permission from the author. Read this great article on the BBC website The Hidden Strengths of Unloved Concrete
Why construction projects are delayed and when contractors can claim for these delays. Often construction projects are delayed. Sometimes the delay is due to the contractor – for instance poor planning, insufficient resources, or materials arriving late. Often the delay is due to weather which might include rain, wind and extreme temperatures, but weather events are normal and should be accounted for by the contractor. On occasion the delay is due to reasons that were specified in the contract document – such as the contractor having to work in and around the customer’s activities. Many times in this case the contractor has to recover the lost time at their own expense, as they either caused the delay themselves or they should have foreseen or known about the potential delays when they prepared and agreed to the project’s construction schedule. However, delays often happen for reasons outside the control of the contractor, that couldn’t have been reasonably anticipated or allowed for by the contractor. In these cases, and depending on the terms of the project’s contract, the contractor will need to claim an extension of time so that the project’s completion date is extended. Delays invariably result in the contractor incurring additional costs as they remain longer on the project. Finishing a project late may entitle the customer to claim damages from the contractor. Furthermore, finishing a project late without a valid, approved reason can be damaging to the contractor’s reputation. It’s therefore essential that contractors understand some of the reasons and causes that give them the right to claim an extension of time. An extension of time means that the project’s completion date is extended by the number of days approved in the claim. The contractor then can claim the additional costs associated with this longer approved construction period. Reasons for extension of time Some causes of project delays that entitle the contractor to submit an extension of time include:
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 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 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 Order your books from Amazon Order your books from Amazon UK © 2016 This article is not to be reproduced for commercial purposes without written permission from the author. |
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December 2018
CategoriesCopyright 2016 - The attached articles cannot be reproduced for commercial purposes without the consent of the author.
The opinions expressed in the attached articles are those of the writer. It should be noted that projects are varied and different laws and restrictions apply which depend on the location of the contractor and the project. It's important that the reader uses the supplied information taking cognisance of their particular circumstances. The writer assumes no responsibility or liability for any loss of any kind arising from the reader using the information or advice contained herein. "I have what I consider some of the best books on construction management."
Books are available from: Amazon.com Amazon.co.uk takealot.com kalahari.com Amazon.in Amazon.de Amazon.fr Amazon.it Amazon.com.au Powell's Fishpond uread bokus Amazon.ca Amazon.es Other retail stores Available in paperback or on Kindle "28 YEARS OF CONSTRUCTION PROJECT MANAGEMENT EXPERIENCE, DEVELOPING SUCCESSFUL CONSTRUCTION PROJECT MANAGERS AND BUILDING SUCCESSFUL CONSTRUCTION COMPANIES"
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