One of the biggest inherent risks general contractors and construction managers face as they build projects is the risk of a subcontractor default. A subcontractor’s failure to perform can add cost, delay a job, and damage the reputation of a contractor and owner. Not all defaults are preventable, but sound prequalification and management practices can reduce the risk of default and mitigate the severity of the defaults that happen.
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.
Cash management is the art of organizing, planning and controlling the collection, investment and disbursement of cash. In the construction industry, it is crucial to keep an eye on a company’s overall cash flow, as well as the cash flow on major projects. Acquiring a comprehensive knowledge of this process is essential to successfully managing a construction company. Successful cash management begins at the project level. Continue »
The lackluster economic recovery from the recession masks some monumental shifts taking place in the United States. With the possible exception of social media, no major industry segment has been as dynamic as energy production. In fact, regional data indicate economic recovery has been most vigorous in energy-intensive states such as North Dakota, Texas, Oklahoma and Alaska. Continue »
Now that the election is over and the president has been sworn in, the Obama administration appears poised to advance its regulatory agenda in ways that will impose new burdens on businesses in general and on merit shop contractors in particular. Following are ongoing legal developments and expectations for 2013. Continue »
What’s the business case for providing company vehicles rather than reimbursing drivers who use their own vehicles? Improved cash flow, reduced operating costs, improved safety, enhanced driver morale and a more professional image. Each of these factors is significant independently; together, they make a compelling case for providing company vehicles. Continue »
Marketing is a creative process–more art than science. Wrestling with difficulties in work acquisition in recent years, some construction companies have reached out for assistance while others have attempted to carry out their programs in-house. A multitude of project lead resources are available, so either these resources don’t work, or construction firms do not know how to utilize them. Continue »
The oil sands of Western Canada are home to hundreds of active capital investment projects. Last year, investment was more than $19 billion and even greater expenditures are on the horizon, according to the latest forecast in Oil, Gas, Shale and Refining Markets and Projects published by the McIlvaine Company. Continue »
When the need for a tool, a piece of equipment or material unexpectedly arises on a project, especially a remote one, sometimes it just makes sense to reimburse employees for the purchases needed to complete the job. However, to reimburse employees for their purchases and avoid payroll taxes and taxable income to the employee, the reimbursements need to be paid under an accountable plan. Under an accountable plan, the reimbursements are not included in the employee’s W-2 form as taxable income and the employer can avoid payroll taxes on these amounts while still taking a deduction for them. Any reimbursements for personal non-deductible expenses are deemed to be compensation and are included in the employee’s wages and subject to payroll taxes. Continue »
With the decline of the private construction market during the past four years, the public works sector has become increasingly crowded with bidders. Upon passage of the American Recovery and Reinvestment Act, companies began registering with the Central Contractor Registry in record numbers. Competition remains fierce, and is poised to escalate given ongoing budget constraints at the federal, state and local government levels. At the same time, federal and state agencies are intensifying compliance efforts, which means the likelihood of being audited when performing a public works job is extremely high. Continue »
Large companies have no excuse for being unprepared to pursue claims or defend lawsuits, as they tend to have their own legal, IT and HR staffs and budgets. Many learn from experience that they absolutely must spend time on, and invest money in, information governance.
But small companies get sued too. Unlike many large firms, small companies ultimately may fail or succeed based on their ability to defend a lawsuit (or pursue claims). While it certainly is tough for small companies involved in relatively few legal challenges to rationalize spending money on policies for retaining records and planning for electronic discovery, they must do so or constantly live in fear that a single claim or lawsuit may lead to bankruptcy. Continue »
Many of the key provisions associated with the Patient Protection and Affordable Care Act have begun to take effect, and implementation will continue well into the coming year. This complicated bill can leave business owners feeling like they have been left standing at the station as the health care reform train rolled by. Continue »
Mentioning tracking performance on a construction site usually results in some eye rolling. Mentioning tracking profitability, though, elicits a much different response.
Contactors must view tracking performance as being positively correlated to tracking profitability. Tracking performance on current work gives contractors a baseline against which to measure departures from the norm on future work when it becomes necessary to justify claims and change order requests. It also provides project managers with current information about production and costs, allowing them to take timely corrective action if necessary. Continue »