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10 things I hate in construction. What annoys you in construction?

28/11/2018

Image courtesy of pakorn at FreeDigitalPhotos.net

After 30 years in construction I’ve developed some dislikes.
Do you agree with my list, or am I becoming old and grumpy and should learn to be more forgiving?

Clients that don’t pay for completed work, or regularly pay their contractors late. When contractors have delivered construction work of the right quality and on time they deserve to be paid. Not paying a contractor on time can have serious repercussions for the contractor, possibly even resulting in them becoming bankrupt. Inevitably there is a knock-on effect and the contractor’s employees, suppliers and subcontractors may not be paid. One invoice not paid, or paid late, can seriously impact the lives of many. Why should owners and clients make money at the expense of others. Of course, it is equally important for contractors to pay their subcontractors and suppliers what’s due to them and on time.
Clients that ignore variation claims from their contractors. Contractors can’t be expected to work for free! I had one client simply ignore our variation claims which eventually totalled the value of the original contract – that’s right the contract value had doubled but the client was only paying us for the original contract scope and value. This put severe strain on our cash flow and it would have sunk many other contractors. We tried everything in the book to be paid and only when we instituted legal action were most of our claims paid, although the contractor managed to avoid paying some of our claims on a technical issue. Why did we have to wait 6 months to get money that we were entitled to? If there’s a change in the project scope, or if the contractor has been delayed for reasons beyond their control then they deserve to be compensated – indeed they are entitled to be compensated in terms of the contract.
Clients that request you price a project and then use your price to bargain with their favoured contractor who ultimately is awarded the project. Pricing a construction project takes time and costs contractors money. But even worse for the losing contractor is that they might think they have a chance at winning the project, so don’t price other prospective projects, so could be left with no work for their teams.
Clients that ask contractors to price construction projects which are pie-in-the-sky or won’t be built any time soon. Pricing projects costs money. Why should contractors be used and abused to provide price estimates for grandiose plans.
Contractors that lodge excessive or even ludicrous variation claims to try and make up the losses they’ve incurred on the project due to their mismanagement, or because they under-priced the project. Excessive and spurious claims wastes everyone’s time and money. It costs integrity to submit false and inflated claims and it will negatively impact your reputation.
Clients that award a construction project to the contractor with the lowest construction price even though the contractor doesn’t have the resources or know how to complete the project. Unfortunately many clients are only interested in the lowest price. Inevitably the contractor who submitted an unreasonably low price runs into difficulties on the project, possibly submitting numerous spurious variation claims to recoup their losses. The client is sometimes left with an unfinished project, or a project that’s completed late, or one that is of poor quality. Of course all contractors are blamed by the client for being useless and crooked, when it was actually the client’s poor choice that caused the problem.
Contractors who price projects knowing they don’t have the resources or knowledge to complete the project. That’s irresponsible and possibly even dishonest. I’ve witnessed many contractors run into problems after winning a construction project which they didn’t have resources for. Inevitably they had to hire new personnel who weren’t suitably qualified and who didn’t fit in with the culture of the company. Resources were stretched and management didn’t have time to manage the project. Sure, we all hire personnel and equipment for our construction projects, but it’s critical that we have some key people available within the company for the project, or that we are sure we can employ the right resources for the project. Contractors who don’t have the required knowledge will certainly run into problems which will cost them and their client money.
Poor safety. Poor safety leads to injury, additional costs and even death. There is no excuse for poor safety. It is possible to work safely. Yet frequently I see construction projects which aren’t following good safety practices.
Contractors who let you down and contractors that don’t respond. Unfortunately there are contractors that let you down. They deliver work late and of a poor quality and then they don’t respond to complaints and requests to sort out their problems. They don’t reply to telephone calls or emails.
Poor quality work. There is no excuse for poor quality construction work, no matter how rushed the project or how low the price. Poor quality work tarnishes reputation and it can even cause injury and death. Often it costs no extra money to do the work properly, but poor-quality construction work usually has to be redone costing extra money and time. We should all be proud of our work.

Conclusion
Regrettably, like all industries, construction has its share of fraudsters and liars. But unfortunately, as often as there are unscrupulous contractors there are also dishonest clients. Contractors need to be wary of the clients they work with and clients needs to be more selective in their choice of contractors.
What are your dislikes in construction?

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' and 'Construction Project Management: Tips and Insights'
'Construction Claims: A Short Guide for Contractors' is another of Paul's useful books.
Paul has recently published 'Construction Management: From Project Concept to completion'.
Paul's new book: 'Build and Renovate Your Home With Your Eyes Wide Open' is for those with little construction experience who want to build or renovate a house. It's filled with tips and suggestions to help you on your way, ensuring you avoid the pitfalls of home construction projects.
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.

© 2018 This article is not to be reproduced for commercial purposes without written permission from the author.

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Is It Your Job to Find New Construction Projects for Your Company?

26/11/2018

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Image courtesy of khunaspix at FreeDigitalPhotos.net

Who is responsible for obtaining new construction projects in your company? Inevitably, most will answer that the estimator, owner, or some senior manager must find and win work. Yet, the responsibility of procuring new construction projects lies with everyone in the company.

Management’s Role in Winning New Projects.
Management must:

Ensure that the estimating team has the right resources (including software) to accurately price construction projects.
Select suitable construction projects for the company to price, discarding unsuitable projects. It is pointless pricing projects which the company doesn’t have the resources to construct.
Talk to prospective clients to ensure that the company has the opportunity to price their next project.
Understand the construction marketplace to better select the profit that can be added to the estimator’s price, which will still ensure a winning price.
Develop new markets and clients.
Check all the bid prices to ensure that they are an accurate assessment of the work, that there aren’t excessive risks for the company, and that the construction schedule is achievable. This review process could include developing alternate construction proposals and methods which could result in a more competitive price.

The Project Manager’s Role.
The project manager plays an important role in securing new construction projects which includes:

Ensuring that they deliver their project safely, on time, with minimal fuss and with the right quality. The best source of new work is from:
1. Returning clients. Indeed many of my projects have been with returning clients. On some projects, we completed up to 5 construction phases (5 different projects), while we became the preferred contractor for other clients. This was a huge advantage as we were often awarded projects even though we didn’t have the lowest price, or better still, the client negotiated the project price only with us, which meant we didn’t have to go through a competitive pricing process. In fact, some of our clients enjoyed working with particular project teams so much that they insisted that we would be given their next construction project only on condition that the same team worked on that project.
2. Word of mouth. There are simply hundreds of contractors out there. How are clients to determine who should be asked to price their construction project, and who should be awarded the project? Being recommended by a satisfied client helps get a contractor to the bidding table giving an opportunity to submit a price. Then, when clients are trying to differentiate between 2 or more prices and between 2 or more contractors, a glowing recommendation from their friend or colleague, who has worked with your construction company, or even a good recommendation or review from your previous clients, may just tip the project in your favor.
Providing constructive feedback to their estimating department. All construction project managers are quick to tell their estimating departments when they’ve made a mistake with the price that has cost the project money. Yet few (indeed possibly none) will tell their estimating department when their price was too fat, usually rather claiming all the kudos for a profitable construction project because of their own project management skills. But, if the estimator is aware that some of the rates or costs they used in their estimates are higher than they should be, they could be in a position to cut these which may mean that more of their future project prices are successful.
Informing the estimating department of suppliers and subcontractors who’ve performed well and should be called upon to supply prices for the next project estimates.
Interacting and talking to clients, designers, engineers, subcontractors, and suppliers. This interaction would include uncovering leads to potential new construction projects, while also developing good working relationships for possible future projects.
Understanding their clients. Knowing a particular client’s needs may help the company win another construction project with the same client if they are able to incorporate ways to satisfy these needs in their price submission.
Delivering a project with the efficient use of resources, so that the company has a lower cost base to use when calculating the price of future projects.
When assisting with the pricing of construction projects, seeking ways to enhance the bid to ensure its success, while maximizing the profitability of the project.

The Employees’ Role
Every employee has an important role to play in finding and winning projects.

Delivering a project safely, on time, with minimal fuss and with good quality is essential to every construction company’s reputation. A good reputation can ensure recurring construction work from clients and it is a good advertisement for potential future clients. A poor reputation could be the death knell for a construction company, with them not winning new construction work even when their price is the lowest.
Any employee could hear about possible new construction projects from their friends, relatives, and acquaintances. It’s important that our employees are encouraged to inform management of likely new construction projects and potential new clients so that these leads can be pursued. Indeed some may be dead ends, but, even having a few turn into a new construction project can make a huge difference to the fortunes of your construction company.
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10 things I hate in construction. What annoys you in construction?

Is It Your Job to Find New Construction Projects for Your Company?

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