​Contractors face financial risks on every corner, and unquestioning contractors can quickly find that their pockets have been picked, and their hard work and efforts have been turned to nothing by unscrupulous people. Contractors need to be wise to these tricks and have systems in place to protect themselves.

Who could be stealing from your company?

1. Employees. Employees can steal from us in many different ways:
   1. They steal time – arrive late, have extended lunch breaks, leave early, and even call in sick when they aren’t. If everyone on your project starts work 5 minutes late, take an extra 5 minutes on each side of their rest breaks and leave 5 minutes early you could be paying 30 minutes or more per person every day. It can add up quickly!
   2. They use company resources for private use. This could include the company vehicle and cell phone. But sometimes it’s more blatant and they use company tools and equipment after hours, sometimes even renting it out to friends and pocketing the money.
   3. They steal materials. From office supplies to timber, paint, and adhesives, it may seem minor but quickly adds up. Some employees are even more blatant about arriving in vehicles after hours to take stuff. In the retail industry, the biggest cause of shrinkage (what retailers call theft of merchandise) is from employees and not from the public shoplifting.
   4. They falsify travel and petty cash claims.
2. Management
   1. Use company resources to do private work. I’m sure there are many homes that have been built with company resources that the individual never paid a cent for! I certainly know some.
   2. Pay subcontractors and suppliers through the company, for work that was done in their private house.
   3. Use subcontractors or suppliers who happen to be their friends, but who weren’t the cheapest or the best for the project. In extreme cases, they may even have a share in the subcontractor or supplier business.
   4. Accept bribes from subcontractors and suppliers to award them contracts, to accept substandard work, or to pay bogus invoices.
3. Suppliers
   1. Double invoice for materials.
   2. Don’t provide the correct quantities as per the delivery notes. This is often the case with suppliers of building sand and gravel. Who checks that the quantity on the truck is what’s on the delivery docket? I know when we checked, we often caught suppliers short delivering.
   3. Deliver damaged or defective materials or equipment.
4. Subcontractors
   1. Invoice for work that hasn’t been completed.
   2. Deliver substandard work.
   3. Lodge spurious variation claims.
5. Customers/clients.
   1. Don’t pay contractors.
   2. Pay contractors late. Why should you be your client’s bank? They are earning interest from your money – money that you need to pay employees, suppliers, and subcontractors.
   3. Back-charge for items they shouldn’t.
   4. Refuse to pay variation claims which the contractor is entitled to.
   5. Request changes, but don’t issue written instructions, then argue they don’t need to pay for the item.
6. Authorities
   1. May retain deposits because they claim the contractor damaged infrastructures, such as roads and curbs.
   2. In the worst case may even expect bribes to process documentation.
7. The public
   1. Steal equipment and materials from construction projects.
   2. Engage in cybercrime which could include ransom malware.
   3. Submit bogus claims for damages, even injuries, which they claim were as a result of construction activities.

​Theft results in:

1. The immediate loss of the item.
2. Work could be interrupted because equipment or material was stolen. This results in costs of people and equipment standing.
3. Money stolen could have been used to invest in the company. To purchase new equipment and to grow the company.
4. Money stolen may have been used to pay off loans, so you now have the cost of additional bank interest.
5. Thieves often damage other items which have to be repaired.
6. The cost to investigate the theft.

Don’t let your hard earned cash disappear out the door. There are steps that you can put in place.

1. Set the right example. Our employees are always aware of what management does.
   1. If they see you having extended lunch breaks or arriving late in the morning they’ll think it’s okay for them to do the same.
   2. Don’t take materials from your projects, or if you do, then make sure that employees know that you’ve paid for them.
   3. Don’t encourage employees to steal from other contractors, or to cheat suppliers, subcontractors or clients.
   4. You’re setting up a culture of theft and employees will notice that you condone theft in some cases, therefore theft is okay, even if it’s theft from your company.
2. Enforce rules fairly and evenly.
   1. Those caught stealing must go through the full disciplinary procedures. The worst thing that can happen is you dismiss someone for stealing and then have to re-employ them because it’s found their dismissal was unfair. Don’t get carried away in the heat of the moment, rather do things properly following procedures.
   2. Never overlook an indiscretion because an employee is a good worker, or you need them. If you turn a blind eye others will follow the example. But importantly, if you’re aware somebody is stealing, there are probably other thefts they’ve been involved with that you haven’t noticed. In fact, often we tend not to suspect our best workers of stealing so don’t see the obvious signs.
   3. Enforce the rules. Sometimes it seems hard work, but when you let employees slide for some items they’ll start sliding elsewhere. Whether it’s safety, quality or timekeeping, make sure that employees keep to the rules.
3. Ensure that employees understand that theft of any sort, even ‘borrowing’ equipment, is unacceptable. Make this part of every employees’ induction, even discuss it at ‘tailgate’ meetings. You don’t want anyone to say they didn’t understand the rules!
4. Put systems in place to detect and prevent theft. These include checking and reconciling materials and invoices. If employees and others know there are robust systems to detect theft they’re less likely to try and steal. Detecting theft early will enable you to take steps to prevent further theft.
5. Ensure that proper security is in place on all project sites.
6. Check that computer systems are safe from infiltration, viruses, and malware.
7. Encourage employees to look out for theft and suspicious behavior. All employees must understand that theft hurts the company, and it ultimately impacts them in that the company makes less profit, which impacts their wages and bonuses, it could prevent the company from purchasing new equipment, and in the worst case, the company could even become bankrupt.
8. Carefully research your clients. Don’t work for clients that have a reputation for paying their contractors late, or even not at all. Nobody wants to work for free.
9. ....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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In the last video I discussed why construction variation claims may be bad for both the contractor and the client. Therefore, wherever possible steps should be taken to mitigate claims. Watch the video for steps to prevent claimable events occurring.

I’m sure you’ve heard the saying ‘pay peanuts and you get monkeys’? Believe me. It’s true.
So true, that’s why it’s important that you pay market-related salaries which are fair and sustainable and which will attract the right people.
Our employees look around and compare their salary packages with what they can get elsewhere.
But, in this competitive world, it’s impossible to retain people solely by paying higher salaries than competitors. There’s always another contractor, desperate for good people, who will willingly pay a premium to entice skilled people for a particular project.
Therefore it’s imperative that quality candidates are attracted to the company and retained, for reasons other than salary.

Here are some ways you can attract good people to your construction company and construction project - and most important keep them:

1. Make individuals feel part of the business by regularly communicating with them, discussing the company’s future plans and where they’ll fit into these plans, thanking them when they’ve done a job well, and making them feel wanted.
2. People want to work for successful companies, so the company must have a good reputation and success. Success is empowering, infectious and stimulating. Everyone wants to be part of a winning team. Success is winning a new project, successfully completing a project or winning an award.
3. Mentor, train and develop people. Training our employees not only makes them more productive and knowledgeable, but employees also enjoy learning new skills and it makes them realize that the company is interested in them.
4. Promote people. Train and develop people within the company to take up senior positions. People want to see a path ahead.
5. Learn to delegate work to others. Effective delegation means you can spend more time on important duties, even enjoy some free time. Effective delegation means that employees learn new things and take on more responsibility. They feel more trusted. Even more important.
6. Make sure that employees have time-off work and don’t work extended hours and weekends. People need to spend time with their family.
7. Ensure the company can meet the person’s expectations and aspirations. Companies can’t satisfy everyone’s needs or desires, but try to understand a person’s aspirations and know that you can satisfy them before employing them.
8. Always be fair and consistent in your treatment of employees. Of course, being fair and consistent doesn’t mean acting leniently. It simply means applying the rules.

It’s often the little things that attract people. Good people attract good people. People want to work for people who are knowledgeable and experienced, where they can learn.

​Contractors assume that claims will be lucrative and that they’ll more than recover the cost and time of the delay. But this isn't always the case and there are downsides to claims as well. Watch the video for more.

​Information in this video is from the author's easy to read books: 'Construction Claims: A Short Guide for Contractors' and 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide'. All available from Amazon in paper or ebook.
Next week watch video 18 - How to avoid variation claims or mitigate their impact.
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There are numerous factors that can build or destroy a contractor's reputation. These include:

1. Being proactive – clients want to work with contractors who are proactive, anticipating potential problems and solving them before they occur.
2. Be responsive – don’t ignore the client’s complaints. Clients can be demanding, making changes to the project and construction schedule, but try and be accommodating. Being responsive also means returning the client’s phone messages, making yourself available for meetings, responding to queries promptly and submitting prices and revised schedules on time.
3. Be fair – this doesn’t mean that you shouldn’t charge for additional work or variations, but rather don’t take advantage of the client and charge excessively for these additions.
4. Work safely – it’s essential that you take safety seriously. I’ve known contractors being barred from working for clients because of a poor safety record.
5. Deliver a quality construction project – poor quality costs money to fix and it also destroys reputation.
6. Act professionally – always be professional and courteous in your dealings with your client. It’s easy to say things in the heat of the moment which could upset clients. Some clients can be unforgiving and bear a grudge for years, jeopardising the chances of winning further construction work from them.
7. Deliver your construction projects on time –  clients will often pay a premium to employ contractors they know will deliver their construction project on time. For many clients time is money.
8. Don’t over promise and under deliver – it’s usually better to under-promise and over-deliver. The client is then pleasantly surprised when the task is delivered ahead of time. Of course the client’s not going to accept dates which are clearly extended further than they should be.
9. Sort mistakes quickly and with minimal fuss – mistakes will happen, sort them out. Admit when you or your employees have made a mistake, tell the client how you will rectify the problem, then fix it.
10. Use reliable construction equipment – equipment that breaks down slows the project and it gives clients a poor impression of the contractor. Construction vehicles and equipment in good repair and newly painted can be a good advert for the contractor, especially when the company’s logo is clearly displayed.
11. Be honest – the company and its personnel must be honest. This is more than just not over-charging the client. It’s about conducting yourself and the business beyond reproach and not cheating others.
12. Meet the client’s expectations – this means you should understand what these are, then ensure that they are reasonable and that you can deliver on them. If the client has expectations you can’t meet, then turn the project down – a disappointed client can do immense harm to a contractor - even when it's not the contractor's fault.
13. Provide after completion service – unfortunately a construction project doesn’t always end when you hand the keys to the client. Most construction contracts have a warranty period during which the contractor is responsible for repairing defects due to their defective workmanship.
14. Behaviour of employees – poor behaviour in public creates a bad impression for potential customers. Clients have telephoned me to complain that the driver of a company vehicle wasn’t obeying the road rules, or was behaving badly or littering.
15. Avoid bad publicity – unfortunately news reporters are quick to focus on negative incidents and rumours. Accidents, industrial relations incidents, environmental problems and rumours of impropriety quickly turn into news headlines. Always be mindful of how events can create bad publicity.  ​

​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'
• and 'Build and Renovate Your Home With Your Eyes Wide Open'

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Extension of time and variation claims require supporting documentation. Failure to submit documents that support your claims could mean that the client rejects the claim. Watch the video for more.

Some people love using certain phrases, or have stock answers to questions and comments. These phrases are often used with little thought – just an excuse to do nothing, a meaningless answer, or a go-to phrase.
Here are a few phrases I hate hearing on construction projects. I’m sure you have phrases that you dislike?
1.“He is useless” (or maybe she).
/ Frequently used to complain about someone, or even used as an excuse for a failure on the construction project (blaming someone else for the failure).
= Well why is that person still working here if they are useless? What have you done about it? Have you told them where they need to improve? Have you provided adequate training?
2. “Don’t bring me problems, bring me solutions”. (or, “there’s no such thing as a problem, there’s only a solution”.)
/ This comes after asking the boss for help!
= If I had a solution I wouldn’t have asked for help! If there wasn’t a problem I wouldn’t need a solution. Let’s not play semantics, either you can help or you can’t. Personally, I’d rather someone brought a problem (or potential problem) to my attention and asked for help before it got out of hand. Sure we expect people to solve simple problems, we may expect managers to have thought of possible solutions, but surely we’ve employed people that we know we can trust to solve most everyday problems on their own, only bringing us problems when they need our help?
3. “We have always done it like this” (or; “we always do it like that”).
​/ In reply to a suggestion on doing something differently, maybe a different construction method or using alternative construction material. Frequently used as an excuse not to embrace new construction technology.
= Change is often good. There are often new and innovative ways of doing things, new construction techniques. Maybe the way you have always done things is the best, but you don’t know until you have considered the alternative construction solutions and methods.
4. "I’ll do it/that” – and it doesn’t get done.
/ In reply when you ask somebody to do something, to carry out a task.
= Don’t you hate it when people say they’ll do something and then don’t do it? If you don’t want to quote for the construction project then tell me, don’t keep me hanging expecting a price. If you’re not going to do something I asked you to do, tell me, then I can make alternative arrangements.
5. “No one will notice” (or; “It doesn’t matter, no one will notice”).
/ Often said as an excuse for poor quality construction work.
= Well I noticed! Hey, take pride in your work. Anyway, I can recall countless times someone has said that, then at the end of the day someone has noticed. If there’s a problem fix it, it usually costs a whole lot more to fix the problem at the end of the project when the client puts in on the snag or punch list, than it does to correct it now.
6. “Those are the rules” (or, “that’s what the boss wants”).
/ Usually said in defence of a request, or a refusal to do something. Often a justification for being obstinate or unhelpful (maybe even lazy).
= Some people love to hide behind rules, or other people. Sure rules are important, but it’s equally important to ensure that the rules are fair and applied in a fair manner. Also, are those really the rules, or are you just clutching at an excuse?
7. “Fix it or you are out/fired/dismissed.”
/ Frequently used when a construction project is losing money.
= Sure, threats are going to work? When there’s a problem, employees need to stay motivated, they require help and support. Threats are demoralising and seldom yield the desired result. Sure, sometimes the person has goofed up, they’ve caused the problem, they may need to be reprimanded, but, it’s usually far more important to get the problem fixed properly first.
8. “So and so, or company X, is worse than us.” Or, “we are better than company X”.
/ This in response to a criticism, or a suggestion on how thing should be done better.
= Why can’t we do things right, as they should be? Why should it be correct just because someone else is worse than us? Why do we measure ourselves against the worst construction company or an ordinary construction project, when in fact we should be striving to be the best?
9. “We don’t have time (or, money) for training.” (Or,” if we train them, improving their qualifications, they’re going to want a higher salary,” or, “they will leave the company if we train them”.)
​/ Usually in reply to a request to attend a training course, or an excuse for having poorly skilled construction workers.
= Companies always have an excuse why they don’t train people. But improving our team’s skills benefits the company and motivates workers. A skilled team will yield results – I’ve always got huge benefits from improving the skills of my team. There will never be time for training unless we make the time. There will never be money for training unless we budget for it.
10. “Safety is a waste of time and/or money”. (Or, “we don’t have time for safety”.)
/ Used as an excuse for poor safety practices on construction projects.
= Safety does not have to cost additional time and money, in fact good safety practices saves time and money. But anyway, is a person’s limb, eye, or life more important than time or money? We owe it to our employees to ensure they return home safely at the end of every day.

Conclusion
Think before you use some of these phrases. Are you being helpful? How do these phrases make you feel?
What phrases do you hate in construction?

​Any instruction of a contractual nature, which changes details and specifications, or which could cause a delay or additional costs must be in writing. 

Information in this video is from the author's easy to read books: 'Construction Claims: A Short Guide for Contractors' and 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide'. All available from Amazon in paper or ebook.
Next week watch video 16 - Supporting documents required to ensure your variation claim is successful.
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​2018, where did it go so fast? The last few years have been tough for many. Some of you will look back on 2018 and curse the gods of construction that were against you, subcontractors that let you down, the weather, politicians, uncooperative clients, competitors that undercut your prices, employees, the economy, in fact usually everybody and anyone. But this serves little purpose.

The end of the year is a time to contemplate the past year and consider the coming year. It’s that time of year when many make New Year’s resolutions. These include; getting fit, losing weight, stopping smoking, drinking less, taking up a new hobby, managing stress, changing jobs and spending more time with the family. Unfortunately, few successfully keep these resolutions because they’re often poorly thought through, spur of the moment decisions (sometimes made after a few drinks), or because they just seemed like the right thing to say and do. There’s no plan on how to go about keeping the resolution. So other than providing some optimism and a brief feeling of good, they often achieve little.

What will you be wishing for in 2019? No doubt you are wishing for company growth, increased profits, successful projects, a developing career, more family time, good health, less stress and a year with few problems. But have you really thought how you’ll achieve these aims? Do you have a plan? How will you make 2019 better than 2018?
​
Before you get totally immersed in the hassles, problems and work in the New Year, take some time to consider things you could improve in your company, your projects and your everyday life. Why not put some New Year’s resolutions in place, and keep them.

Don’t let another year go past without making a few necessary changes. Before we know it 2019 will be half gone! Take action now on just a few of these points and you’ll certainly be able to look back at the end of 2019 with a sense of achievement.
Write down the resolutions you want to implement. Include a short plan on how you’ll tackle them. Then, don’t forget to monitor progress through the year.

Make this year a new beginning. Don’t let this become another forgotten New Year’s resolution! You can make the difference with some planning and a little effort.

How do you plan to transform your company, your construction projects and your career this year? Please share your thoughts.
If you put some of these ideas into practice please don’t forget to give us feedback on how they helped you.
Wishing you an inspired, happy, healthy and successful 2019. Thank you for your continued support.
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The Construction Contract Document - all the rules of the project.
​Regrettably many contractors only read the contract document when there’s a claimable event or when they’re in trouble. Often by then it’s too late!
What does your contract document say?

​Information in this video is from the author's easy to read books: 'Construction Claims: A Short Guide for Contractors' and 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide'. All available from Amazon in paper or ebook.