One of our projects located in a remote area of a foreign country required twenty thousand cubic meters of concrete, which was produced from our concrete mixing plant on site. We transported the cement for the concrete in bulk from a factory six hours drive from the site, using two of our own cement tankers. We couldn’t seem to get cement delivered fast enough and the project was constantly delayed due to shortages.
Our cost reports showed we were losing money on concrete materials. The project team claimed the loss was because the client had requested more cement in the concrete and we would claim the additional costs from the client. The months went past and the continued to increase. Eventually, the project team undertook a reconciliation of concrete materials (something that should have been done from the start of the project) and found that more than half a million dollars of cement was unaccounted for.
Further investigation found that when our drivers returned to the project site with a load of cement they made a detour, stopping off and discharging the cement from one of the tanker’s compartments, which they then sold. In fact, a third of every load of cement was being stolen from the truck en-route to the site.
Not only was there the direct cost of the stolen cement, the project also had insufficient cement due to every truck only delivering two-thirds of what they should have, and the trucks taking a couple of hours longer on each return journey because of the detour to unload cement.
By implementing suitable controls we were able to prevent further theft of cement and never ran short of cement again. But obviously, we were never going to recover the losses we had already incurred.
The many forms of theft on construction projects
Theft on construction projects takes many guises. Project sites can employ hundreds and even thousands of people from diverse backgrounds. Some of these employees are employed directly by the contractor while many are employed by subcontractors and suppliers working for the contractor. But often the client has their own workers on the project and they also even employ other contractors. Project sites can sometimes be difficult to secure as they can cover large areas and ongoing work can prevent the erection of permanent fencing. Equipment and deliveries are constantly entering and exiting premises.
However, theft takes a multitude of forms and includes lots of white-collar crime. In fact, fraud often accounts for more theft than the direct theft of materials.
Some forms of theft on construction include:
When we have theft we often only consider the direct cost of replacing the item. But the cost is often more than this. The cost may include:
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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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