Posts Tagged ‘general contractor’

Re-Imagining the Contingency Budget

November 9, 2011

*RP - Risk of the Past


In an earlier post I discussed the risk of the past (RP) and the ways in which it impacts the contingency budget of a construction project. The table above presents a “before and after” scenario, where the effects of the RP are reduced through effective use of media to capture and record events and conditions in real time so that they may be examined later.  By effectively leveraging media to lessen the uncertainty over past conditions, the contingency budget can be reduced in many ways as explained below.

Scope Change

Collateral work is the biggest driver of unanticipated scope change costs. Owners can fail to fully comprehend the impact on construction of what may seem to be a minor change request. While inaccurate or incomplete progress reports by the contractor, may lead an owner to believe that sufficient time exists to implement a change without incurring major rework.

Contractors can use media effectively to clearly convey project progress to owners and then build on that knowledge to illustrate the impact of design change costs. In doing so, both parties know what they are in for when approving a design change.

Coordination

Work that is completed out of sequence harms productivity and can lead to unnecessary charges. Often a single instance of out-of-sequence-work can lead to a pattern that spirals out of control. Contractors can use media to capture and share lessons learned immediately to correct these issues and prevent further loss, rather than waiting until the end of the project when the damage is done.

Design Deficiencies

Let’s face it, the RFI is overkill for many contractor inquiries. How many times does the response to an RFI read something like “See detail D-1”? For example when it comes to process related questions such as window installation, Architects can utilize photos and video to clearly convey to prescribed process for proper installation providing for an easily repeatable process throughout a project.  In the case of a valid RFI request, media provide an effective tool for contractor and architect alike for confirmation of compliance.

Delay Claims

This is an area where the answer is almost never as clear as black and white. Clear evidence of jobsite conditions can allow for a thorough examination of factors contributing to delay claims and often bring to light details that do not survive through recollection and typical documentation alone. For example, even severe weather events are often not the “show stopper” that they might appear to be in hindsight. A jobsite bogged down in mud, might still be quite productive when it comes to interior work, for example. Photos and video can also conclusively settle issues of materiel delivery schedules or access by subcontractors.

Post Construction Legal Expenses

Well, the lawyers are going to get theirs anyway. Aren’t they?

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Construction Needs Troublemakers

April 6, 2011

I had lunch with Josh (not his real name) the other day.  Josh joined a large General Contractor last year as its first BIM director because the company’s owner came to the realization that his company was falling behind in technology innovation and need to get involved “in that BIM stuff” (my words, not his).  So, he hired Josh.

Josh is a guy that’s always looking to tinker. He finds out about new technologies, new processes, new services, and he’s the first one to start thinking about ways to adapt them to his organization. He won’t let a title like “BIM Director” limit his scope to just BIM. So, he’s made himself the inhouse expert in IPD projects, cloud computing applications and smart phone apps. The IT department thinks Josh is a real troublemaker, because he’s pushing them constantly to change their “old tech”/ “we can host anything”/ “MS Exchange Server Rules” mentality.

Guys like Josh weren’t hired by construction companies 10 years ago. But in these days of thin profit margins and hyper competitive bidding, contractors are chanting the “innovate or die” mantra a lot more often than they used to. However, they have a lot to learn about truly embracing innovation within their organizations.

Josh has his hands full for sure. Why? Well, he’s trying to turn his oil tanker with a canoe paddle. while the captain is in the wheelhouse trying to hold the line. Rather than give Josh the authority that he needs to boldly innovate, his company has tied his hands by forcing him to work with (i.e. around) his IT organization, which, in a nod to the “Greatest Hits” of 70’s management structure, still reports to the CFO. While Josh is committed to finding new, better ways of doing things, IT is focused on maintaining the status quo.

The owners at Josh’s company haven’t yet realized that they are in an innovation dip. It’s up to Josh to stir up enough trouble to make them wake up to the fact that innovation requires abandoning old practices in addition to introducing new ones.

Top 10 Tasks for Construction Superintendents

September 8, 2010
Stumbled upon this on the state of Washington Workforce Explorer site.  In reviewing this list, it occurred to me that jobsite photos and video should play a critical role in supporting most of these tasks. I have added comments next to each task (where appropriate) to specify the role that visual media can(should) play in performing the task.

If you’re not using photos in this manner, you should ask yourself why not.

Top 10 Tasks

  • Examine and inspect work progress, equipment, and construction sites to verify safety and to ensure that specifications are met. – Photos used to record progress and report conditions.
  • Read specifications such as blueprints to determine construction requirements and to plan procedures.
  • Estimate material and worker requirements to complete jobs. – Photo archives can provide visual references for similar jobs from the past.
  • Supervise, coordinate, and schedule the activities of construction or extractive workers. – Photos serve as a reference to confirm access, availability of materials and equipment.
  • Confer with managerial and technical personnel, other departments, and contractors in order to resolve problems and to coordinate activities. – Photos augment written and verbal communication and provide confirmation of resolution.
  • Coordinate work activities with other construction project activities. – As mentioned above, photos provide information on current site conditions.
  • Order or requisition materials and supplies. – Webcams and photos confirm receipt of materials, preventing over-ordering.
  • Locate, measure, and mark site locations and placement of structures and equipment, using measuring and marking equipment. – Photos used to augment measurements and markings.
  • Record information such as personnel, production, and operational data on specified forms and reports. – Photos augment written records and allow for forensic research of conditions not properly recorded.
  • Assign work to employees, based on material and worker requirements of specific jobs.

What’s Your Jobsite Photo Strategy?

August 4, 2010

When speaking with managers and executives from general contractor firms I make it a point to ask about their corporate strategy for jobsite photos. Ninety nine percent of the time, the response is “well, we don’t have one.”  Wow.

I’m sure if I asked the same question about estimating, scheduling, project management or accounting, one hundred percent would be able to convey their strategy to me. Yet, the one resource they have with the potential to irrefutably convey the value of their work isn’t worthy of a corporate strategy. Talk about an under-appreciated resource.

Flat Fee Construction: An Opportunity for Innovation

March 3, 2010

When you hear construction and The Great Recession in the same sentence, you wouldn’t expect it to be good news. But I read an article today in the Wall Street Journal that has me brimming with excitement over what the future holds for our industry.

Given a choice between going out of business or keeping their construction businesses alive, contractors are striking flat fee deals with banks to build/finish the houses of failed development projects.  Sure, the contractors quoted in the article mention that such contracts “help stop the bleeding” but how long would you expect any business to continue to work just for the sake of keeping the lights on? The strongest contractors will innovate in order to improve (create) their profits.

Where will the innovation come from? Well, I hope jobsite technology gets a good, hard look (OK, I’m biased). But you can’t predict these things. Maybe it’s more efficient use of materials or labor, new contract structures or creative insurance policies. Who knows? Every penny gained through innovation goes directly to the bottom line. Now’s the time to try things!

Given the large inventory of unfinished work in the now infamous markets of Florida, Arizona, California and Nevada, flat fee contracts with banks offer contractors a solid alternative to the bare-knuckled bidding wars that are taking place for government projects. Contractors in these markets can work in familiar territory to improve themselves.

What about you? What are your recession-inspired innovations?

Finding That Critical Project Photo

July 13, 2009

Imagine what it’s like to dig a hole in the sand at the beach. Hand over hand, you dig away and watch as the hole changes constantly with each shift in the sand. Whenever you see anything interesting in the hole (a sea shell, piece of sea glass, etc.) it’s covered over almost as quickly it’s uncovered.

kids-in-the-hole1-600x413

Essentially, this experience provides a summertime analogy for tracking the work on a construction site. No matter what your role on a jobsite, you depend on knowing the condition of your area of interest continuously over the course of the project. The advent of digital photography has made it possible to inexpensively record the physical condition of the project in extreme detail. Unfortunately, recording the digital images are the easy part. After shooting hundreds (and sometimes thousands) of jobsite photos, finding that critical construction image after the fact becomes the ultimate challenge. (Raise your hand if you have a hard drive choked with project photos that are organized by project and date.)

I would like to know what you, as a construction-related professional, do to extract meaningful data from your jobsite photos. Feel free to leave your comments  and exchange ideas with your fellow readers.

Miscommunication Between Owner and Contractor Can be Dangerous

June 5, 2009
The Croc Slot

The "Croc Slot"

You’ve Landed a Stimulus Project, Now What?

May 11, 2009

You and your team sharpened your pencils and beat back the most ravenous pack of competitors that you’ve ever seen in your career to win a coveted stimulus project. Congratulations.

Now it’s the morning after and you realize that things will be different with this project. Scrutiny from the government, the media and even the general public will be higher than you’ve ever experienced. Also, the razor thin margins that you have left for yourself mean that you have less wiggle room than ever to get this one right.

Ask yourself these questions:

  • What changes did you make in your approach to bidding that led to your winning the contract?
  • Have you made appropriate accommodations to your operations practices in anticipation of the increased scrutiny? Timely, complete reports help a lot. Get out there and snap plenty of pictures.
  • Have you worked with your suppliers (and your subs with theirs) to improve the accuracy of their delivery schedules? Successful Just-In-Time deliveries can add precious days of cash flow while minimizing costly idle time.
  • Pre-Construction Quality meetings with your trades are helpful. In-project Quality meetings are even better. Track exceptions from inception to closure and don’t let schedule pressure affect your expectations for closure. Shortcuts only cost more in the end.

Times have changed. Have you?

Social Media for Recognition and Retention – Part 2

March 27, 2009

In part 1 of this topic I discussed the benefits of sharing your crews’ success stories with the world through social media. Below is a brief outline of the sequence of social media events that a project manager/principle can use to highlight the work of his or her crew:

  1. On a site walk you learn of your superintendent’s amazing effort to rally together with the rebar sub in order to satisfy a city inspector and keep the project moving forward.
  2. Shake the super’s hand and get a photo of him and anyone else involved in the game-saving event.
  3. You immediately grab your blackberry and post a 140-character message to Twitter praising the super by name for a job well done.
  4. Upon returning to the office you write a short description (1-2 paragraphs) of the story (scrubbed of any proprietary information of course) and post it to your blog along with the photo.
  5. Post another announcement on Twitter including a link to the blog post and kudos to the super for job well done.
  6. Write a more lengthy description (2 -4 paragraphs) of the accomplishment including quotes from the super and possibly the client to reinforce the impact on the project.
  7. Send an email to the whole company with a link to the recognition web page and the blog post, where peers can add their own notes of congratulations.

Social Media for Recognition and Retention – Part 1

March 27, 2009

One of the attendees at my social media presentation to the local Associated Builders and Contractors board mentioned that he felt that there were many wasted opportunities to share stories about the great work his crew did.  He went on to say that his superintendents problem solving abilities were a real competitive advantage, but he found it difficult to convey that to current and potential customers.

I thought social media would be a great mechanism for sharing such stories.  The company benefits in a couple of ways. First, as the gentleman above suspected, these stories make great marketing copy. They create an opportunity for current customers to emotionally invest in the work of their contractor and paint an enticing picture for prospective clients.

However, I think efforts to recognize your crews’ success on the web will pay bigger dividends for the morale of the crews themselves. Think about it. If you see yourself mentioned in the company’s print newsletter, you might take it home to share with your spouse. However, if your mentioned in a blog post, with a link to the recognition page on the company website, then you’re likely to share that with all of your friends and family by email. Chances are that more than a few of those folks are in construction too, which means that your recognition effort can have recruiting benefits too.

See part 2 of this post for a 7-step approach for promoting the work of your crews.