Construction Project Management Services and Construction Books
  • Construction Home
  • About Paul Netscher
  • +Construction Books
    • Successful Construction Project Management
    • Building a Successful Construction Company
    • Construction Claims
    • Construction Project Management: Tips and Insights
    • Construction Management: From Project Concept to Completion
    • An Introduction to Building and Renovating Houses
    • The Successful Construction Supervisor and Foreman
    • Designing your ideal home
  • Construction Management Services
  • Book Reviews
  • Contact
  • Blog | Construction Management
  • Site Map
  • Blog | Home Improvement
  • Index of construction articles
  • Useful Links
  • Index Home Improvement

Construction project guarantees and warranties

4/12/2014

2 Comments

 
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
construction management construction project management
2 Comments
Allan Dionaldo
20/5/2016 10:14:57 am

Do you have any suggestions on how can the warranty terms be improved to achieve proper risk mitigation on similar cases?

Reply
Paul
12/6/2016 02:14:25 pm

Hello Alan, thanks for your question. When the order is placed it's important that the warranty terms are spelled out to ensure that the item will be guaranteed for the same period (preferably longer) than the contractor will be responsible for the item to their client. Also that the use and location of the item is clear so there are no disputes that the item was incorrectly used or installed.
Unfortunately many suppliers provide their own warranties. These need to be carefully checked as many have so many 'escape' clauses as to make them all but useless for the contractor to claim against.
Importantly try and ensure that the provider will be around long enough to honour the warranty and that they are known for rectifying faults speedily when they do occur. Our clients/customers expect us as contractors to resolve faults speedily and it's of no use if the supplier takes forever to act and rectify the item under warranty, or has lengthy arguments over whose fault it is or whether the item can be repaired, or if parts are available, etc.
Probably the best insurance is to ensure that you use reputable suppliers/subcontractors who use items that are readily available and easily repairable or replaceable.

Reply

Your comment will be posted after it is approved.


Leave a Reply.

    Picture
    Picture
    Picture

    Archives

    December 2024
    November 2024
    October 2024
    June 2024
    April 2024
    March 2024
    February 2024
    January 2024
    September 2023
    July 2023
    May 2023
    March 2023
    January 2023
    October 2022
    August 2022
    June 2022
    May 2022
    March 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014

    ​Note: We welcome genuine comments, especially comments that add additional information to the subject matter in the article. We however reserve the right to remove inappropriate comments, which includes comments that have nothing to do with the subject, comments that include inappropriate language, and comments that are an advertisement for a product or company, or which include an advertising link. Comments must be in English. We will not enter into discussion on why a particular comment was removed.

    Categories

    All

    RSS Feed

    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.
    Picture
    "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
    Picture
    ​"28 YEARS OF CONSTRUCTION PROJECT MANAGEMENT EXPERIENCE, DEVELOPING SUCCESSFUL CONSTRUCTION PROJECT MANAGERS AND BUILDING SUCCESSFUL CONSTRUCTION COMPANIES"
    Picture
    Picture
    Picture

Construction Books

Successful Construction Project management
Building a Successful Construction Company
Construction Claims: A Short Guide for Contractors
Construction Management: From Project Concept to Completion
Construction Project Management: Tips and Insights
​
Build and Renovate Your Home With Your Eyes Wide Open
Book Reviews

Construction services

Construction Management Services
Paul Netscher
Construction Management Blog
​Home Improvement Blog

Contact
Developing Successful Construction Project Managers.

Building Successful Construction Companies.
30 years of construction project management experience
  • Construction Home
  • About Paul Netscher
  • +Construction Books
    • Successful Construction Project Management
    • Building a Successful Construction Company
    • Construction Claims
    • Construction Project Management: Tips and Insights
    • Construction Management: From Project Concept to Completion
    • An Introduction to Building and Renovating Houses
    • The Successful Construction Supervisor and Foreman
    • Designing your ideal home
  • Construction Management Services
  • Book Reviews
  • Contact
  • Blog | Construction Management
  • Site Map
  • Blog | Home Improvement
  • Index of construction articles
  • Useful Links
  • Index Home Improvement