The old adage “a good beginning makes a good end” proves true in the construction process. The goal of any scope of work is to create a detailed account of the tasks, procedures and specifications for each construction process. A good beginning—clear communication between all parties involved and accuracy in the detailed scope of work and price proposal—will lead to a good end product. One way to begin on the right foot is by using job order contracting (JOC), an indefinite delivery/indefinite quantity procurement method that enables facility owners to complete a large number of repair, renovation and minor construction projects with a single, competitively bid contract. Continue »
Typically, disruption in the workplace is counterintuitive to productivity. But in terms of creating innovative ways to manage people, processes and technology, the concept of “disruption” isn’t such a bad thing for the construction industry. Change is stirring whether contractors are ready for it or not, and firms that have adopted new ways of managing scheduling and workflows are seeing stellar results—earning the accolades of repeat projects for key clients, as well as happy project partners.
Construction projects require collaboration among many parties to ensure the work is completed. When one of those parties files for bankruptcy, finishing the project can be very difficult. Continue »
Safety is a process—not simply a collection of mismatched programs and policy statements—that should be managed similarly to every other business function. When this is done, the evidence gained from observations should serve to predict and prevent injuries. W. Edwards Deming, a pioneer in the quality movement that occurred decades ago, succinctly described how a process works: inputs lead to outputs. In other words, companies are no better than how they perform a process, and they are fooling themselves if they believe the firm is doing well simply because of an absence of poor outputs. Continue »
Business in the construction industry has changed dramatically since the bottom dropped out in 2008, yet many companies successfully forged ahead by strengthening their business development tactics. Whether it’s forming a department to specifically address business development, creating a cutting-edge website, or placing more emphasis on client relationships and networking, construction companies are learning how to prosper with less work and more competition. Continue »
A troubled company may succumb to hopelessness, but focused action guided by an understanding of how companies succeed can make a difference. A contractor struggling to move operations forward while sales move backward often finds profit to be as elusive as credit-worthy customers. Worse, when times are already tough, it seems that everyone from code officials and architects to subcontractors and bankers become a roadblock to the contractor’s success. Nothing goes right on jobs, customers pay slowly (or not at all), staff and owners are at each others’ throats, vendors don’t deliver, projects suffer costly delays, banks refuse to lend and cash is nowhere to be found.
When contractors reach this point, one of two things will inevitably happen: either a return to profitability or a trip through bankruptcy court.
The economic downturn of 2008 compelled many contractors to turn to federal construction work. After winning a federal project and getting to work, many contractors discovered the plans and specifications contained hidden costs and risks. Federal contracts feature unique risks in the change order and dispute resolution processes that differ from the commercial construction world, where nearly everything can be negotiated. It is imperative government contractors understand the Federal Acquisition Regulations’ performance requirements, cost principles and dispute resolution procedures to minimize risk related to cost or poor performance reviews.
As contractors and specialty subcontractors emerge from the recession, many face equity levels that have eroded during the last three to four years. General contractors and owners need to know more about who they are hiring; simply relying on reputation is no longer good business. Continue »
When the U.S. Supreme court voted 5 to 4 to uphold the individual mandate included in the Patient Protection and Affordable Care Act (PPACA), it ruled that it was under Congress’s broad authority to impose taxes on the American people. Continue »
Traditionally, each participant in a construction project obtains insurance individually to protect against the risk of financial loss. In recent years, “wrap-up” insurance programs have emerged as an alternative to the traditional method of risk management. In a wrap-up program, the project owner can purchase an insurance policy that will cover the participants involved in the construction project, including the owner, construction manager, general contractors and subcontractors. Typical wrap-up policies provide coverage for workers’ compensation, general liability and builder’s risk; however, program features vary based on the insurance company and the type of project. Continue »
When an employee is injured on the jobsite, a subcontractor may seek coverage of the incident under the project owner’s insurance policy. A recent Pennsylvania Supreme Court decision clarifies the circumstances under which the owner is liable for such coverage based on its interpretation of the “retained control” exception. Under this exception, the owner has retained enough control over the substantive means and methods of construction to warrant the imposition of liability. Continue »
As the economy improves and contractors look toward seeking work in new markets and augmenting their staffs, it is essential to educate newly retained or promoted personnel about risk management. The decision to enter a new market, whether geographically or in terms of an owner (e.g., the federal government) or a project delivery system (e.g., design-build), can entail new obligations and risks.
Risk identification and assessment precede risk management. Many contractors rely on experience and intuition to assess risk, but a systematic and documented approach can help assure potential pitfalls are not overlooked. Continue »
Preventing injuries is the main goal of a jobsite safety program, but it is only part of a contractor’s overall loss-prevention effort. An injury on the job has a human cost for the employee, but it also sets in motion the machinery of workers’ compensation, which can seriously affect a contractor’s costs. A proactive return-to-work program typically rewards the contractor with lower claim costs and a lower experience modification factor. Continue »