Prevailing business wisdom holds that the way to reduce credit risk is to limit credit lines, be stingy in allowing credit and freeze orders on past due accounts. This line of thought posits that it is generally impossible to lower “bad debt” losses without adverse consequences to sales and business expansion. Read The Full Story »
The repressed economy created a number of challenges for new industrial plant construction during the past several years. Rather than build and expand, businesses in many industries are squeezing out excess capacity from their existing manufacturing plant networks. Continue »
In today’s global construction industry, it’s common to have equipment from Germany, materials from Italy, and parts from China, Thailand and India. At the same time, project schedules have shortened, leaving less time between groundbreaking and ribbon-cutting. Continue »
Some of today’s top contractors manage multiple mega-projects each year. The potential downside to such a high-dollar workload is that poor management discipline can result in budget overruns of 5 percent to 10 percent per project. Ultimately, one unprofitable project could wipe out the profitability of a firm’s entire portfolio. Continue »
Today’s customers are more demanding than ever, and they’re quick to claim negligence when dissatisfied with the results of a contractor’s work. Any complaint can turn into a costly dispute, and too often a small business must spend its own time and money to fix the problem. Continue »
Equipment and materials used for transportation projects are subject to a variety of exposures before they even arrive onsite. The size and type, origin and destination, and special handling requirements of the equipment or material may necessitate the use of a hauler with specialized knowledge. Understanding and safeguarding against three of the most common risks—collision, overturn and theft—should be considered when developing a project plan. Asking the right questions in advance will help ensure each team member has the same expectations for the protection of assets. Continue »
Since the recession started in late 2007, the ability to present adequate surety capacity at a competitive cost has become increasingly critical for prime contractors and subcontractors to satisfy owner and lender requirements on private work. In many cases, bonding capacity and cost have been key determinants in winning—or losing—private jobs. Similarly, with public-private partnerships (P3s), it is essential for a contractor (or consortium of contractors) to find an innovative surety partner that is willing to accept obligations and risks that exceed what they traditionally bond. Continue »
A ruling by the California Supreme Court affirms that a subcontractor’s duty to defend is greater than its duty to indemnify. The case, Crawford v. Weather Shield Manufacturing, states that a subcontractor’s contractual obligation to defend a builder exists regardless of the subcontractor’s actual negligence. Continue »