The Project Manager must know what insurances the client has in place to cover the construction works. This includes, understanding the terms of the policy, what’s covered and what’s excluded, the duration of the policy, and what the excesses are on the policy.
The Project Manager needs to evaluate the risks and put appropriate insurance cover in place. It may be necessary to arrange additional insurance should the client’s insurance be inadequate,or if the policy excesses are too high.
There are various insurances a project should always have, these include, amongst others:
1. plant and equipment insurance
2. insurance of the works
3. public liability insurance
4. workers compensation insurance
5. professional indemnity insurance if there’s design involved
The company may already have some ofthese policies in place making it unnecessary to take out additional cover. Nonetheless, the existing policies must be reviewed to ensure they adequately address the risks on the project. For instance, additional cover may be required if the project:
1. is in another country, since some of the standard policies mightnot apply
2. is located in a region prone to tropical diseases, where it’s important to know personnel on the project will be covered in the event someone becomes ill
3. is in a remote region,insurance should be in place to cover flying a patient home for emergency treatment, which could cost several thousand dollars
4. contains particular risks which are specifically excluded from the policy
5. has a value in excess of the existing policies
6. requires the use of high value equipment items not included in the policies
If there are any doubts as to what insurance cover should be in place check with qualified experts on the matter such as,the insurance broker your company deals with.
(from 'Successful Construction Project Management - The Practical Guide' by Paul Netscher)
I hope you had a good holiday with family and friends and you are refreshed and ready for the new year.
2014 was a tough year for many people and companies. What will 2015 bring for You? How You start the year could dictate how well the first few weeks will go for you and whether your project will be a success.
It’s often difficult to get started after the holidays. You have probably lost track of exactly where you were and what needs to be done. You may still have that holiday, lethargic feeling – wanting to relax and do nothing. Some may even be tired after the excess partying or travelling.
For those who are part way through a project what happens in the next few days could be critical to the success of the project. If the project doesn’t gain momentum quickly several days could go past with minimal progress. Also, don’t forget most workers will also be in the holiday mode – reluctant to work, eager to catch-up with colleagues and probably not concentrating on the tasks they ought to be doing. Over the holidays many of us can quickly forget things and we need to be reminded. Accidents happen quickly when people aren’t concentrating.
Here are a few suggestions on what should be done on your construction project:
1. Have a brief look at the updated schedule/program so you are reminded of the important tasks that must be accomplished.
2. Assemble the project team and:
2.1 welcome them back wishing them a successful new year
2.2 remind them that safety is important
2.3 congratulate them on last year’s achievements
2.4 set the targets for the next week and remind them of the next milestones
3. Have a meeting with key staff
3.1 repeat the steps in 2 above
3.2 ensure everyone understands what they need to do
3.3 check what the team needs
3.4 find out any problems that occurred on the construction site over the holidays
3.5 ask for an update on the worker attendance
3.6 reallocate responsibilities to cover for absentees
4. Walk the project to refresh yourself regarding problems and what needs to be accomplished.
5. Make contact with suppliers and subcontractors to ensure they understand what’s required from them in the coming weeks. Understand problems they may have so you can work around them if necessary.
6. Make a list of what needs to be done and start getting tasks completed.
7. Check that outstanding invoices have been paid. Follow up unpaid monies.
8. Refresh yourself on outstanding information and outstanding contractual issues
9. Call the client or their representative. After exchanging pleasantries ask them for any project concerns or problems that arose over the holiday period. Remind them of tasks they need to accomplish such as providing information, paying valuations and resolving outstanding claims. Remember they could be as reluctant as you to be back at work, yet, their support is essential for the project progress.
10. Go through mail and emails that came in over the holiday period. Answer the most urgent.
11. Call your manager and give them an update on what’s happened on the project. Remind them of any outstanding help required from them.
12. Have all the workers attend a brief induction reminding them of the dangers on the site.
13. During lunch and tea breaks take the occasion to have a social chat with key staff. This will show you care and also provides an opportunity to understand any problems they may have. Remember, not everyone might have had a chance to have a happy holiday with their family and some could have suffered personal tragedies or losses in this time.
Remember you are back at work – make sure that everyone else in the team is firmly with you. You cannot build the project on your own.
Try and ensure the team doesn’t work additional time on the first day – remember many will have travelled a long way and may be fatigued.
The rest of the week will be as important to ensure the entire team is motivated and committed to achieving the targets safely and to the required quality standards. The construction team will be looking at you, and if you are happy passing the day with casual chatter and being lethargic they will follow suit.
Stay focussed. If your first week is a disaster you can be sure the following weeks won’t go well either.
At the end of the week stop an hour early and have drinks with your staff. This will allow time to discuss the holidays and catch up with the events that happened in their vacations.
As the holidays approach project managers and the rest of the team start focussing on their holidays. This includes arrangements for their vacations including booking accommodation and flights and preparing for the festivities. But is the construction project site ready for the holidays?
Usually preparing the construction project for the holidays should start several weeks before the start of the holidays. These preparations could comprise ensuring:
1. that critical tasks are completed in accordance with the project schedule or program (these may include for instance; closing up buildings to make them weather tight, pouring concrete to allow curing time over the holidays so that the forms can be removed immediately when work resumes, or completing sections of roads so they can be opened in time for the holidays meaning that detours and deviations don’t have to be maintained over the holiday period – delays on some activities may mean they are done only after the holiday period which could result in significant delays and extra costs)
2. invoices for completed work or monthly valuations have been submitted – this may include making prior arrangements with the client for an earlier submission so that payments can be made
3. subcontractors’ and suppliers’ invoices are paid – remember they have bills to pay over the holidays
4. arrangements have been made to pay staff and workers
5. utility bills have been paid – you don’t want to return to the project only to find that the power or water services have been terminated
6. if required, security services are in place for the project site
7. loose materials are secured in case of severe weather over the holidays
8. equipment is parked in secure areas – including being removed from areas that may be flooded
9. stormwater drains are clear so that unexpected storms don’t flood the site
10. workers and staff are aware of when the project will close and when work will resume
11. for remote projects, transport is arranged to take workers home at the start of the holidays and return them to the project site – including ensuring workers are aware of these arrangements and times
12. the client is aware of when the construction site will be closed
13. suppliers are informed when the project is closed so that deliveries are not made in this time
14. arrangements are in place to keep essential operations running during this time – such as maintaining pumps removing water from the works or teams maintaining traffic signage and barricades
15. the construction site is barricaded and secure so that unauthorised people can’t enter, possibly injuring themselves, vandalising or steeling property
16. project personnel are contactable and available in case of an emergency during this time
Adequate preparation should mean you can return to the project after the holidays without having to face a crisis immediately on your return.
Construction project managers, or site managers, have a multitude of duties and tasks to perform. Unfortunately many managers concentrate on delivering the construction project and some of their financial duties are neglected. This often impacts the projects profitability and can also negatively impact the company's profits and cash flow.
It's therefore important that the Project Manager should:
1. ensure the monthly valuation claims are prepared correctly and submitted to the client in the correct format, with the correct paperwork, and on the due date specified in the contract
2. ensure the client pays the valuation within the specified time frame
3. monitor the project’s cash flow since a negative cash flow can impact the contractor’s ability to trade successfully
4. ensure variations are submitted within the time specified in the contract document
5. should review all variations, checking they have considered all the costs and the claim has been formulated correctly, referencing the correct reasons for the claim, quoting the necessary drawings and contract clauses, and including all the relevant calculations
6. ensure the client issues a change order for variations
7. prepare a project budget
8. when undertaking work on a cost-recovery contract, ensure all the costs for this work are included, gathered on a daily basis and approved by the client as they are incurred
9. make sure cost reports are prepared monthly, are accurate, and provide sufficient information for losses or profits to be tracked
10. analyse the cost reports and take appropriate action to prevent further losses and where possible to recover the losses incurred
11. check that materials are reconciled, and monitor losses so that appropriate action can be taken to prevent further losses
12. undertake basic daily site costing to ensure the work is done in a cost efficient manner
13. provide feedback to project staff of where the project is losing or making money
14. ensure goods, services and expenses are collated, and paid correctly and on time
15. check, approve, and submit personal expense claims as soon as possible with supporting documentation
(This is a summary of the Financial section in the book 'Successful Construction Project Management - The Practical Guide' by Paul Netscher)
Sony hack attack – does this have any relevance to construction Project Managers?
By now most people would have read something about the hacking attack on Sony Pictures Entertainment computer systems. The attack is purported to have originated from North Korea. So far the hackers have released large amounts of embarrassing and confidential information with promises of more to come. These include salaries of executives and actors, confidential data of Sony employees as well as private emails containing disparaging comments about actors.
Read more about the Sony incident
Most Project Managers would have read the story thinking it has no relevance to them. After all they aren’t movie stars or executives in the movie industry and North Korea probably has no interest in them.
All Project Managers have sensitive information on their company computers. This includes emails, correspondence, project cost reports, possibly access to employee levels of pay, probably their own payslip, etc. While North Korea is probably not interested in any of this data the data could be embarrassing if it fell into the wrong hands.
Would you want your client to find out you were making a big profit on their project – it could certainly jeopardise negotiations with them regarding a claim or for further work?
What if subcontractors found out how much profit your project was making? They may expect you to be more lenient in your financial dealings with them.
Wouldn’t the unions love to know who was being paid what? It could make for interesting wage negotiations in future.
What if confidential employee information was leaked to others? It could expose you and the company to a lawsuit.
There are many ways people can see information on your computer.
1. Some people leave their computer on in their office even when they aren’t there. Anyone can enter their office and access the content on their computers. Sometimes PM’s even leave sensitive documents open on their computer screens when they aren’t there. These could be seen by accident by someone who wasn’t intentionally spying.
2. Computers are left unattended in offices or cars where they can be stolen.
3. Your computer could be hacked which may be made easier by opening emails containing malicious software used by hackers.
So who would want this information?
1. Unfortunately most companies have unhappy employees or ex-employees who bare a grudge against the company. Some may go to extraordinary lengths to embarrass the company.
2. Industrial espionage can be serious business in some countries where companies via to outcompete their competitors and could go to any lengths to give competitors a bad reputation.
3. Criminals may use the information to extort ransom money from companies or individuals so that confidential information isn’t leaked.
ONE MORE LESSON
What’s also come out of these leaks are emails sent by senior executives which contain disparaging and embarrassing comments about actors, producers and others. We are probably all guilty of saying things in emails which we shouldn’t. To say nothing of those joke emails which are circulated which could be politically incorrect, contain racial slurs or be seen to be sexist.
It should be remembered that you have no control over what the person receiving your email does with it. Even if they have no malicious intent and remain your friend forever, they could forward it onto others who may not hold you in such high regard. Sometimes these emails are even forwarded by accident. Their computer could even be hacked.
Secondly remember that emails never go away. Even when deleted, it’s possible with the right soft-ware to recover them again.
I was watching the news recently and one of the items was a graphic vision of a huge blaze in a LA building that was under construction. The building was totally destroyed and surrounding buildings were damaged.
I was reminded of a similar incident earlier in the year when a fire broke out on a Sydney building site and almost caused the collapse of their construction crane which would have caused substantial damage to the surrounding buildings.
Fire can be a serious hazard on construction projects. Usually during construction the firefighting and smoke detection systems aren’t functioning, so the fires are only detected when it is too late and then they are difficult to contain. Furthermore access to the affected areas may be difficult because stairways aren’t completed. The fires often spread quickly because of the additional fuel load created by stored materials, adhesives and other flammable items. In addition fire walls and fire doors aren’t fully installed meaning the fire can spread rapidly.
To prevent fires:
1. reduce and control the amount of combustible materials in an area by:
a. ensuring waste material is cleared off site as soon as possible
b. keeping the site neat and tidy
c. stacking materials properly clear of work areas
d. storing flammable liquids in suitable containers in special enclosures
2. hot work must only be done in safe conditions, by trained personnel
3. place fire extinguishers at readily accessible locations, and have them checked, serviced and replaced as required, ensuring staff are trained in their use
4. where projects are located in vegetated areas personnel must be aware of the fire risks, keep plant growth away from offices and work areas (be aware vegetation can often grow back quickly), maintain fire breaks and plan escape routes
5. smoking should be restricted to designated areas
A recent article reminded me how important warranties and guarantees can be. In this case the client had started using a new state of the art hospital that had cost over a billion dollars to construct. There were various delays in the construction process. Furthermore, the client was not ready to occupy the hospital immediately it was completed. When they finally moved in, they discovered that some equipment (some costing over a million dollars), that had never been used, had guarantees and warranties that had already expired. This meant that the client was now responsible for repairs and maintenance of the equipment even though they had barely used it.
Read more on this story.
Often contractors end up in a similar situation. They place orders for equipment which is to be included in the facility they are constructing. Their client normally expects (or has stipulated) that the item has a one year (or longer) guarantee period, which usually includes repairs and maintenance to the item. In most cases however, the supplier's guarantee starts from when the item is delivered to the contractor. In most cases the contractor still has to install the equipment, complete the project and hand the project to the client before their guarantee period begins with the client. This process is usually several months, even years, after the item has been delivered. This often means the manufacturer's warranty has expired, but in terms of the contract the contractor is still responsible to maintain and repair the equipment until their warranty period expires with the client. This can result in additional unexpected costs for the contractor.
Furthermore, even when the item is still under guarantee there are often problems which could make the guarantee void. These include; the item hasn't been stored, transported, installed or operated in accordance with the manufacturer's instructions, or someone other than an approved contractor has carried out repairs.
It is therefore important to check guarantees and warranties to ensure that:
1. they are valid
2. they apply to the item and provide the required cover
3. the guarantee period is sufficient
4. the installation, servicing and repairs conditions specified in the guarantee aren't violated
"Many construction projects end badly because they aren't planned properly or because the basics haven't been done correctly at the start."
Many construction projects end badly because they aren't planned properly or because the basics haven't been done correctly at the start.
15 questions to ask before starting a construction project
Here are 15 questions to ask yourself before starting your next construction project:
(To read more on these and other important aspects of planning and starting your next project read my books 'Successful Construction Project Management - The Practical Guide' and 'Building a Successful Construction Company - The Practical Guide' available from Amazon and other retail outlets.)
Closing out a project can often be a complicated and time-consuming process that is underestimated and overlooked by Project Managers and staff who may already be anticipating moving to their next projects. If proper planning and preparation is done at an early stage the close out process will be much simpler.
Failure to close out the project completely, including supplying all the documentation required by the client as well as completing all outstanding work including rectifying defects and punch-list or snag items results in additional costs, frustrations and often delays the release of guarantees, final payments and retention monies. It may also result in the project's warranty period being extended which may expose the contractor to additional risks and repairs.
When nearing the end of the project it is good practice to prepare a finishing schedule. This should include all the remaining items of work and time for completing punch list items.
Keeping documentation up to date, and filed in a correct and orderly system will ensure the documentation is substantially complete, and only requires minimal work before it’s handed over to the client. However, I’ve rarelyfound it done this way, resulting in some project staff working for months after the completion date, trying to recover data and put it into some semblance of order to hand over to the client. This is costly, delays personnel from moving to another project, and holds upfinal payments and the release of guarantees.
I also suggest preparing a list of items the contractor must supply to the client as part of the handover process. Delegate someone to be responsible for each item, and a date by when it should be closed-out.These items are often listed in the contract document, and would include quality control documentation(including closing out of all punch list items and non-conformance reports), a list of spares, spare parts, additional (or attic)stock, maintenance andoperations manuals, warranties and guarantees, commissioning data, and as-built drawings.
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Copyright 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.
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