Tag Archives: Solutions

Immortal Tasks; Is there a Silver Bullet?

We’ve all seen it before,  a task that re-appears on the to-do list over and over again perpetually interfering with any effort to move on.  It can be tough to see why this happens, which makes it especially hard to know what can be done to make it stop.

Immortal tasks are brainless, tangled, and sting everyone they touch

The first step with any problem is to identify the cause.  In my experience, immortal tasks are caused by:

  • Poor planning
  • Miscommunication
  • Lack of follow-through
  • Debate based on speculation
  • Bypassing the chain of command
  • Difficult people

There is little more vital to success in construction management than perspective.  Specifically, being able and willing to look beyond the current task at hand to see how it fits into the big picture.

 

 

In a bacon and eggs breakfast, what’s the difference between the Chicken and the Pig?

 

The Chicken is involved, but the Pig is committed!

 

The whole reason we use the term “Contractors” instead of “Builders” is because contracts legally and financially commits the firm to the project.   As the responsible party, it’s critical for contractors to understand that their project may be imperiled by involved parties who have completely different priorities than their own.  As a result, it’s very common for involved parties to introduce delays for the contractor. In order to be successful, the contractor must develop and communicate their plan accordingly.  One of the surest signs of poor planning is when the first response to every problem is finger-pointing.

Incomplete information can raise more questions than answers which is especially frustrating when the information was slow in coming.  Plan for every predictable problem by providing timely communication about what’s needed and when.  In the absence of clear direction, communicate the contingency plan you’ll be taking so that all affected parties know what to expect. 

Not having a contingency plan leads to situations where everyone is “doing their best” while  patiently watching as the window of opportunity closes.  Contractually speaking, when the risk of rework is less than the penalty for delay, the contingency plan should default to prudent and defensible action.   Conversely, when the risk of proceeding in error is greater than the penalty for delay, the contingency plan should define the work that will stop, in terms of the critical path delivery of the overall project.  Where reasonable and prudent, develop mitigation strategies such as out of sequence work, while being careful to coordinate unconventional deliveries with the inspection requirements of the Authorities having Jurisdiction. 

Incompetent managers prefer to remain silent on the sidelines in hopes that they may claim successes or deny failures.  Contractors working with or for these managers should understand that the “plan” is to let nature take it’s course on the project.  If this approach worked, nobody would ever hire a manager.  

Power struggles 

Lets address an elephant in the room.  Many contract relationships are adversarial by design.  We may dress up the situation by calling it “checks and balances” but many owner representatives have an obvious conflict of interest.  It doesn’t matter whether the Architect or the General Contractor, (GC) is the owners representative, the contract terms will create incentives opposed to the owners best interest.

Modern marketing would like to suggest that this is easily overcome by finding “the right firm”.  Contractually speaking, it’s a far better approach for the client to make it profitable for the “wrong” people to do the right thing.

This speaks to one of the fundamental principles of power-struggles.  People who are concerned about ethics and fairness often find themselves reluctant to reward avaricious motives.  Just doing your job shouldn’t require extra incentive.  As a result, the focus shifts from the proverbial carrot, to the stick.  Construction contracts are predominately a list of obligations with corresponding consequences for compliance failure.

The focus on preventing malfeasance (not doing your job) often creates a very real incentive for misfeasance (doing your job in a harmful way).  It has been my experience that misfeasance is at the root of most power struggles.  A superficial observation of this practice will appear as though the misfeasant professional is merely defending the integrity of their work.  This happens at all levels and all sides of this industry.

Here are a couple of examples;

Design professionals often rigorously enforce specifications that benefit favored product representatives.  Curious people might ask how the representatives responsible for overpriced products reward that kind of loyalty.  

It may not be wise to attract the Architects attention…

Estimators often find problems in the CD’s that have the potential to add cost.  Some GC estimators conveniently overlook subcontractor bidders who bring these costly items to their attention.  They do this in hopes of winning the contract before revealing the issue to justify a change order.

The misfeasant actor in either case exploits their client while proudly thumping their chest for “venerating the integrity of the plans and specifications”.  If you’ve ever heard the expression “The process is the punishment”, you’ll see the role that process plays when it comes to abusing authority. 

So how do we work around this mess?

I suggest starting with acceptance.  The only thing you can change about human nature is how you feel about it.  While it’s a tragic shame to see so many professionals guided by avarice, your duty is to get things accomplished.  This whole mess was predictable, which means these problems are due to poor planning.  All of which strongly suggests that the avaricious stuff always was the plan.  Any contract which does not reward timeliness, transparency, and accountability, for all involved, effectively rewards avaricious behavior.

This leads us to the next snagging point which is miscommunication.  In order to define what you say or write, we need to recognize how you will be heard.  It’s critical to understand the tactics used in a power struggle.  If everyone was just doing their job, there wouldn’t be any conflict to stall things out. You won’t “kill” the immortal task without addressing the root of the conflict.

What they’re really doing is protecting their interests which may be completely opposed to the best-interest of the project.  If it serves that purpose to play dumb, or keep-away, you must recognize what is not being said.  Ultimately, they want to know that their interests are secured before they’ll perform their duties.  To that end, it’s important to maintain diplomacy.  I have found it’s helpful to project a persona of kindly compliance who just so happens to communicate on-the-record with an unusual level of transparency.

This diplomatically communicates that their avaricious concerns will be secured, while establishing a precedent for full disclosure.  Many professionals will recognize the  connection between my disclosure and the potential for their exposure, which encourages cooperation.

Kind-hearted readers may object to this cynical view.  After all, it’s entirely possible that sincere professionals are simply confused, or misunderstood.  I’ve certainly encountered this in the working world, especially so when working with rookies.   

Rookies are often hard-headed about soft skills.

The reason I presented my solution to the cynical view first, is because it works equally well with sincere people.

Following through

Entropy is the natural tendency of stored energy towards disorder in a closed system.  In construction, estimators put all this energy into pre-construction efforts which get bound into contracts to build the project.  If that was all it took to successfully build a project, nobody would ever hire a General Contractor.  This coarse example serves to illustrate why follow-through is so important to actually getting things done.

I’ve won projects that required dozens of bids over the span of several years before the contract was awarded.  That’s long enough that some of the firms involved will have new staff and no records of what was quoted.  We see similar challenges on projects with lots of addenda before the deadline.  It can be downright difficult to know what is, and is not, in the final project.

As an estimator, it’s often your job to guide everyone through these changes which can feel like an immortal task.  One popular approach that aggressively doesn’t work is to simply dump all the available information into a file-sharing site and expect everyone to wade through it.   The unspoken truth in these situations is that most of that information is obsolete, unnecessary, or redundant.  It doesn’t take long for people to get nervous about what risks might be hiding in all that nonsense.  If the presented information is arranged to conceal risks, people won’t trust you.

Proper follow-through builds on the communication principles for dealing with power struggles.  Address their concerns in a manner that displays transparency.  I’ve found it worthwhile in some situations to build a “follow the bouncing ball” narrative which directs the person through the relevant issues, arriving at the necessary outcome.

I prefer to use email for these communications to generate time-stamped evidence of what was sent.   Don’t forget to use the email title to communicate effectively.  A lot of tasks fail to make progress because the recipient refuses to answer communications in order to maintain plausible deny-ability.  I’ll forward the original email with the title revised to include “second request”, “third request”, etc.  Depending on who I’m dealing with, I may copy proportionately more higher-ups in the respondents firm with each follow-up request.  Sometimes I temper this action with messages conveying my concern for the health of the unresponsive recipient.

Evasive people will often respond with some variation of “I’ve just been busy, I’ll call you soon”.  If they call but fail to resolve the task, I memorialize the conversation and all the promises, in a summarizing email which I send immediately after the call.  If they don’t call, I’ve found it helps to copy their bosses on an email where I ask for someone who’s got time to resolve my task.

Talking in circles

Hardworking people who cannot get a task completed day after day can get frustrated.  It’s natural to ask yourself; “Why is this not getting done?”.  After all, you know that’s the first questions your boss will have for you.  Sometimes a task will involve multiple unseen players who must complete their portion in sequence, according to chain of command.  This creates situations where the visible players are anxiously waiting for something to happen.  As critical time passes, you’ll be called upon to provide progress updates.  When hardworking people have nothing to go on, they might start picking at loose ends in hopes of finding a thread to unravel the snag.  This is where people start debates based on speculation.  I’ve worked with professionals who have an incredible ability to generate delays and confusion by pursuing fruitless arguments over things they did not understand.  This is a good time to focus on solving problems you understand.

Research efforts to improve the coordination of design teams are ongoing.

Life on the chain gang

Contractually speaking, chain of command is set up to mitigate risk for all concerned.  Any communications or agreements outside of the contractually defined processes have no legal bearing on the work.  This is why GC’s rigidly enforce requirements that subcontractors do not communicate directly with the design team or client.

There can also be a chain of command at the individual firm level.  Some firms create administrative blockades tiered to protect senior staff from trifling concerns.  This approach is common in firms of all sizes.

Chain of command has a couple of shortcomings.  Communication is slow, and the structure is prone to abuse by misfeasance.  In my experience, quite a few immortal tasks are due to bad actors in the chain of command.

Before we get into how to handle this, lets look at how chain of command is likely to prevent tasks from getting completed.  We need three things to contractually resolve an issue;

  • Permission/Direction: This is contractually binding instruction on a specific issue.
  • Responsibility:  This is the risk of being held accountable for negative outcomes pertaining to the specific issue
  • Process:  This is the perfunctory stuff which connects the specific issue in question with the contract terms.

When issues get “stuck” in the chain of command it’s generally because someone in a position of authority is withholding at least one of those three things without explaining why.   This kind of problem is common in professional groups which lack the necessary leadership and accountability to perform.  It bears mentioning that many firms intentionally put inexperienced, and unsupported people in gatekeeper positions.  Some people are better students than others, so invest your teaching time wisely.

Running out the clock

Everything in construction is time sensitive, so any issue that won’t resolve will eventually threaten a project.  People who can’t or won’t do their part within the chain of command, are often insulated from the pressures of your time constraints.  Where possible, and with permission, it may be possible to communicate with the person holding things up directly.  Although it may seem obvious to some, the success of this approach hangs upon strong social skills.  The goal is to define what motivates their actions, without questioning their integrity, or competency.  Be mindful of the limits of your knowledge, let them tell you what they think is going on.  Show appreciation for their courtesy and their time, by asking how you can bring the issue to resolution.  If you’re talking to a “junior buckaroo” gatekeeper, they will often allude to senior staff making decisions behind the scenes.  Where appropriate, offer to help explain things to those senior staff.

If they transfer you over to the senior staff, be prepared for an earful of information.  There are often really good reasons that an issue is difficult to resolve.  That being said, remember to ask this professional to outline the steps to resolution.  Where appropriate, ask what you can be doing to help.  Don’t forget to ask for specific timelines.  Be positive, helpful, and insistent that everything goes “on the record” so it’s done according to the contract.  Remember that you wouldn’t have this problem if the team had effective leadership and accountability.  It may prove helpful to memorialize the action plan from this discussion with an email entitled “Thank you for your help with (the specific issue) on the (name of project) job”.  Where possible, prudent, and appropriate, copy that email to the relevant affected parties.

Be sure you understand that last part.  Any viable action plan has the potential to cast an unflattering light on the individuals involved.  It might be possible, and arguably appropriate, to work around an individual it would be imprudent to offend.

Remember that any solution you work out this way is contractually meaningless until that solution is communicated through chain of command, via a formal process.  Wherever possible and prudent, incorporate the memorialized action plan into your paperwork for formal approval.  This is especially helpful in situations where you suspect that unsupported junior staff will be processing the paperwork.      

The bane of all productive activities

If an issue lingers on long enough, someone will call for a meeting.  This is a popular approach to solving problems that is affected by the same lack of leadership and accountability that caused the problem.  Getting the most out of these meetings starts with understanding what is likely to happen.

Companies with administrative blockades tiered to protect senior staff have two primary strategies.  The first, and most common management strategy is to send in the rookie.  This is likely the same person who can’t or won’t perform their duty because their superiors have left them unsupported.  Expect them to emphasize process, without touching on the responsibility they’re trying to avoid by withholding permission or direction.  Pay attention to any names you hear in case the rookie offers to “loop someone in” on this issue.  This is invariably the senior support staff of the rookie that didn’t attend this meeting about the issue they wouldn’t address.  Most of these meetings conclude with a commitment to wait and see what the hiding senior staff member comes back with. 

The second most common strategy is for senior staff to arrive at the meeting claiming to be unprepared to make a decision.  Be very careful here, especially if there is no reaction from team leadership.  This is a common ruse to trap the unwary.  I’ve encountered plenty of professionals who came to the table feigning cooperative ignorance, who revealed the depth of their knowledge later on.  You’d better have your facts and figures at the ready, or they’ll trip you up.  I’ve also encountered situations where a professional played dumb to protect their colleague(s) and/or cronies from exposure.

Matt has been playing dumb for so long, that nobody believes otherwise

Getting the most out of a meeting starts with mitigating wasteful behaviors.  If you are setting up a meeting, you might ask all the senior staff to provide a brief overview of what they need to resolve the issue.  Compile that into an agenda which is copied to all invitees.  By developing a meaningful meeting agenda, you might accidentally solve the problem!

If an invitee won’t answer the email, they’ll probably avoid the meeting too.  Anyone who can’t/won’t make a meaningful addition to the agenda is communicating something.  Use their lack of response as an opportunity to request access to their superiors.  Again, I find it’s helpful to couch this in terms of concern for the unresponsive person’s health.  It’s truly remarkable how often people will find time to reply after I’ve asked their boss if they’re out sick.

If you are asked to join a meeting, you might suggest this process by volunteering the items you need to resolve the issue on your end.  Be careful to “stay in your lane”, because weak and unaccountable leaders are often counting on someone else taking charge so they can claim success, or lay blame.  If you don’t know who should handle some item you need resolution on, admit it.  Hopefully things go well and you arrive at the resolution to your issue.

Be thankful for the difficult people in your life, for they teach you who not to be.

Construction is a field which attracts a unique blend of skills and personalities.  It’s truly remarkable how the various combinations can come together to make an individual really good at their job.  Still, it’s not for everyone, and some people take longer to make that discovery than others.  Many people are in a difficult situation after they’ve invested heavily in higher education, to begin a career that’s nothing like the coursework they enjoyed.  Others suffer from the Peter principle; “People in a hierarchy tend to rise to their level of incompetence”

These are just a few examples of how squandered human capital tends to create difficult people.  I’d like to stress that “difficult” in this context, is simply referring to the relative complexity of getting an individual to either do their job, or stand aside so others can make progress.  

I’ve had some success with the following strategy which works well with most people.

  • Respectfully set a precedent of positive productivity
  • Establish guidelines for success, and an escalation strategy for course correction
  • Define timelines for performance
  • Evaluate and follow through
  • Maintain records to develop a narrative which defends or promotes the necessary course of action.
  • Escalate as necessary

Hopefully these ideas will bring some of your immortal tasks to an end.

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© Anton Takken 2021 all rights reserved

 


An estimators guide to design trends

We often think of trends in design as driven by an aesthetic or fashion.  However design is a business, which means that market trends can have an effect on the outcome.  Just as business can influence the trends, so too, can the trends influence business.  From the estimators desk, it’s critical to spot the trends which lead to changing design practices.  Adapting to these practices allows your business to stay abreast of all the challenges that new trends may bring.

Abby finds it difficult to maintain a trendy surfer accent while yelling.

Throughout my construction career there have always been innovations which promised to simplify or consolidate complex assemblies.  In some cases, this took the form of factory-built replacements like pre-manufactured homes which tremendously reduced the work of constructing a house on site.

Trends impact design

Innovations that simplify or consolidate complex assemblies are most often manufactured solutions.  Getting these innovations into a design-teams plans will typically require that the manufacturer provide the necessary design of their product.

In simple terms, a portion of the design is converted into a specified part.  This part may be depicted in a manner that is visually similar to conventional assemblies, but without the detail and/or section drawings that one would expect.  For example, custom made millwork will typically detail every joint in a cabinet door, however a premade cabinet assembly might only show the rough layout in plan view.

So how does this affect me?

The fine detail of the pre-made assembly is usually the manufacturer or sales representative’s responsibility to deliver, especially for custom applications.  Here again, trends in business can translate to changes in design practices.  For example, a design team may specify a single manufacturer in exchange for design-assist services.  The drawings landing on your desk may have semi-detailed plans for the premade assemblies that were generated by the manufacturer or their representative.  Cost-conscious clients may require their design teams to allow multiple manufacturers of premade assemblies.  In this case, the plans may feature blocked off areas with key notes requiring final design from the relevant vendors.

Submitted without comment.

Estimators should be aware that “all in one” pre-made solutions tend to be very inconsistent.  Determining “who does what” in terms of trade overlap can reveal very complicated relationships.  The representative or vendor of the pre-made solution may only deal with the design teams.  There may well be completely separate individuals who quote, design, fabricate, and install the pre-made solution.  It bears mentioning that these firms are seldom “built” to facilitate the needs of an estimator.  The sales agent working with the design team will often have access to information that the quotes department does not.  Many such firms will insist on a process that is almost guaranteed to oppose conventional workflows.

For example, some firms will only quote work per internal directives.  This is particularly common when the manufacturer has a contract with clients that build retail chains.  In this case, the quote may look nothing like what you’re seeing on the plan.   In other cases, there are firms that will only quote after they’ve completed their design.  This is a particularly difficult requirement in situations where you are competitively bidding a conceptual design.

Trends impact designers

Thus far, I’ve focused on manufacturing innovations.  Market trends can affect the design as well.  Despite the many advances in computerized design, getting from concept to construction documents takes a lot of time.  Design professionals tell me that this is because clients are seldom decisive, disciplined, and aligned to the realities of their situation.  Competition drives prices down, so naturally, design firms look for ways to improve profitability in competitive markets.  “Standards of care” or “Design level” are terms that relate to industry defined practices for design professionals.  Greatly simplified, design professionals offer services priced by different performance levels.  This allows a client to inexpensively hire a design team for a crude schematic design for example.

Some market trends have evolved to counterbalance hiring design teams at a lower standard of care by requiring additional services of the build-team.  This can take many forms including a design-build contract, or a design-assist contract.

Responsibilities rolling downhill is a trend too!

In some situations, this counterbalancing is done by adding requirements to the specifications (specs).  This can include tasks that would typically fall under due-diligence for the design team.  Indeed there is a design trend where design and engineering consultants actually require subcontractors (subs) to hire their own independent engineering firms to verify that the proposed design is safe and appropriate for the existing conditions.  Coordination tasks are also being pressed onto subs via requirements for shop drawings of assemblies that involve multiple trades.

This can create a lot of issues for the build-team, which affects their ability to price the work.  For example, the specifications might require the electrical contractor to provide shop drawings of floor box layout with dimensions coordinating furniture, millwork, glazing, framing, structure, mechanical and plumbing. Typically, the electrical sub does not have any contractual authority over the other subs.  The specification requirements for these shop drawings never include a rubric governing which systems have precedence in the event of a conflict.

Advancements in debate technology are still in the experimental stage.

Consistently lower standards of care have found their way into construction administration practices as well.  Design teams still require submittals, shop drawings, and close-out documentation, however they eschew any responsibility for the information they review.  Many such firms will stamp “Reviewed” or “No Exceptions taken” with requirements that the contractor verify that everything they submitted complies with the construction documents.  Hand-in-hand with these requirements are specifications which state that conflicting requirements will resolve to the most stringent standard, as determined by the design team and the authority having jurisdiction.

Since this approach does not reveal mistakes, omissions, or clarifications in the submittals, we can expect two obvious outcomes.  The first is that the wrong material will be installed, which has the potential to compromise design integrity unless the design team catches it during their inspections.   The second, is that the contractors will recognize the trap laid for them by the design team.  If there is no way to prove that you have met the specified criteria, there’s always a risk that the design team will require costly changes when time is short.

Submitted without comment (again)

This trend obviously increases the contractors risk.  Savvy subs who find themselves in this situation may try to mitigate this risk by refusing to place a costly material order without Architect of record, or Engineer of record approval.  Please seek qualified legal council where necessary, as many states have laws pertaining to professional obligations.  It’s also worth knowing that contracts with a severability clause may feature clauses that cannot be legally enforced.   This may be part of a strategy to bluff contract signers into accepting unfair/illegal conditions.  Please seek qualified legal council before signing any contracts!

We’ll fix it with technology!

Some General Contractors (GC’s) attempt to supplement the lack of design coordination with Building Information Modeling (BIM) which is used for clash detection.   Since most GC’s lack extensive knowledge of Mechanical, Electrical, and Plumbing, (MEP) trades, they prefer to require that subs in these trades generate their own BIM model of the project, which will then be used for clash detection.  Here again, standards of care and detail levels play a vital role in defining what actually gets done.  In the context of competitive bidding, BIM modeling requests are generally between vague and meaningless.  These requests are vague because the GC has no idea how coordinated the plans actually are, so they don’t know how to quantify what it would take to resolve the issues.  The only party who does actually know what needs to be fixed/coordinated is the original design team.

“Go ahead and ask them what’s missing, I’ll be right behind you..”

Be forewarned that the same market trends that make it necessary to sell lower standards of care, encourage design firms to eschew “premium” services that don’t sell.  In the worst cases, the end result are plans of poor quality, which must be aggressively salvaged by a slapdash application of technology.  Please seek qualified legal council where necessary, as many states have laws pertaining to professional obligations.

If you are trying to price BIM and clash detection services, I would start by separating the proposals.  One price should be for a specified number of hours to develop a BIM model at a specified level of detail.  This should stipulate the required documents, standards, and files before the process begins.  The second price should be for a predefined number of hours to address clash issues.  Make sure to stipulate the hourly rate for overages.

We cannot solve our problems with the same thinking that we used when we created them” -Albert Einstein

Trying to coordinate a design using third party independent contractors in a process named “Clash Detection” has a few obvious pitfalls.  GC’s and subs alike should understand that the resultant “BIM Team” works very differently than if the same firms contracted with one another to design the project.

Not all clashes are easily resolved.  Some resolutions will materially change the cost, profitability, duration, utility, aesthetics, or performance of the end-product.  It’s also important to understand that clients purchasing clash detection, do so assuming that this process will eliminate change orders.  For these, and many more reasons, clash detection has the potential to consume a tremendous amount of time.  Estimators should carefully manage their clients expectations.

Trends in bidding

Estimators working in markets with an influx of pre-made solutions should adapt to the lack of detail by exposing what they do, and do not, know, using the Request For Information (RFI) process.  Bear in mind that in most cases, someone on the design team has been working with someone at the manufacturer.  Asking for the contact information of the manufacturer’s representative is an excellent way to get access to the individual who knows the most about this project.  Be advised that the representative may not be aware that the job is out to bid.  Clients with national accounts for materials, vendors, and subcontractors, have a bizarre predilection for design teams who systematically withhold any mention of these contractual relationships.  When asking about these accounts, provide any information you have, because many reticent design teams have no interest in communicating their client’s contractual relationships. Sometimes these relationships range from tricky, to downright risky.

For example, there’s one major firm with a national account for lighting fixtures which goes out of it’s way to conceal that this account arbitrarily excludes emergency egress fixtures such as exits, and frogeye lights.  The client demands that electrical subcontractors buy all their lighting fixtures from the national account  vendor.  However, that vendor will not provide pricing for the exits or frogeye lights until after the contract award.

When they do, the national account  vendor’s price for the egress fixtures are artificially high.  The client refuses to accept financial responsibility for this outcome since they believe they made their requirements clear.  Whether by coincidence or by design, that National Account relationship sets the contractor up for an ugly surprise.  RFI’s about this subject put the issue on the record for all bidders to see.  If/when the vendor refuses to quote the full package per the client’s direction, the contractor can forward the vendor’s response to the design team while asking for direction.  If/when the design team runs out the clock on that RFI, exclude, qualify or quantify the costs for the issue(s) in question on your proposal.

The client set up a national account vendor to secure advantageous terms on pricing, performance, and quality control.  The vendor may be technically selling their goods to the subcontractor, but they view the national account holder as their client.  Estimators pricing work requiring these vendors, should anticipate a lower level of vendor performance as compared to market leaders.

You might say they’re hard-headed and crooked, but that’s just one point of view

In particularly competitive markets, there is a trend where the General Contractor (GC) is awarded based on a hard-bid of the schematic design (typically 10% complete).  The awarded GC then conducts a competitive bid based on the design development set (typically 50% complete).  This bid is often “open book” to the client which means they are presented with all the bid information.  In many cases, the most complex and/or time-critical subcontractors are awarded.  The GC then conducts a competitive bid on the Construction Document (typically 95% complete) set.  This is ostensibly to award the remaining subcontractors, however the subs awarded on the 50% round are expected to revise their proposal and offer guidance on constructability, scheduling, and cost-control measures.  Finally, there is the budget reconciliation round which is the permit set (typically 100% complete).  This is where the client expects the GC to lead their subs in value engineering exercises.  In extreme cases, the client will threaten to suspend, cancel, or re-bid the entire project unless their budgetary, design, and schedule demands are met.  This practice only happens in especially competitive markets since nobody on the build-team is paid for their design-assist work.

 

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© Anton Takken 2021 all rights reserved

 


Who pays the price for being wrong?

I’ve spent most of my working life in the construction industry and it’s a rare day when everything goes to plan.  Mistakes, misunderstandings, or simple lack of thinking things through causes a whole lot of negotiation about what comes next.  Change orders can be immensely profitable, indeed many businesses depend on them to be profitable.  That being said, negotiations don’t always land in your favor so it’s important to understand what’s at stake.

I’ve seen situations that escalated because one or more parties’ lost sight of the bigger picture.

“You know, I think we’re looking at this negotiation all wrong, we’d love to have you for dinner tonight”

For example, let’s say the client is on a shoestring budget.  The design team didn’t get paid to investigate existing conditions, so lots of surprises are popping up.  Further, let’s say the client decided to purchase salvaged materials that turn out to be different from what they told the design team to include.

So far, it sounds like this is all clearly the client’s fault, and they’ll have to pay to remedy the situation.

Let’s say this client is desperate to open on time because they would otherwise miss out on peak season that accounts for nearly all their annual revenue.  To protect themselves, the client required a payment and performance bond for everyone on the job and stipulated liquidated damages of $10,000 per day for being late.

The client is in a tough situation, so they’re particularly concerned about overpaying on change orders.  This leads to squabbles that go on much longer than they should.  To be efficient and productive, the work at issue needs to happen before other tasks so the job doesn’t progress like it should.  A lot of low-budget construction clients aren’t very experienced.  They’re not concerned with how this squabble is affecting the overall job because they have contract terms and bonds ensuring their deadline.

So, who pays the price for being wrong?  In situations like this, the immediate answer depends on timing.  If the squabble drags on long enough, the client may call in the bonds to replace the contractors and get their project built.  The replacement contractors aren’t going to be cheap because they’re getting paid for by the bonding agency who can (and likely will) seize assets to settle the exorbitant tab.

Now I’m not a lawyer, nor do I play one on TV, so none of this should be misconstrued as legal advice.  I suppose it’s possible that a contractor could win a case against the client, but that will take a lot of time and money.  Keep in mind that said legal battle would probably take place after you’ve had assets seized by your bonding agency which likely preclude you from conducting business anywhere else.

For most contractors, getting their bond invoked is an “extinction level event”.  I’ve seen situations where a particularly malignant client drove the project into delays, then used the threat of invoking bonds to demand extreme discounts.  Over the years I’ve had several situations where it was considerably cheaper to pay for the clients mistake so we could avoid more costly problems.  That’s something to consider the next time the client wants to change something on the project.

I’ve found that more contractors go out of business because of problems with a job they won, than from all the jobs they lost.  Don’t let it happen to you!

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© Anton Takken 2019 all rights reserved

 

 

 

 

 

 


Finding Mistakes

In a lot of businesses, estimating is a bothersome hang-up standing between an opportunity and a contract.  It can be painstaking and detailed work that has little resemblance to whatever the business actually does.  Making a mistake in the bid can have devastating consequences so it’s a pretty big deal to get things right.  The main problem is that there typically won’t be anything you can compare your bid against to spot if something went wrong.  For little stuff, it’s pretty easy to “see” the whole picture as a list of stuff adding to the total.

When things get more complex, the estimate can be several pages of fine print.

The bigger an estimate is, the more opportunities there are to make a mistake.  So how do we spot them?  Well a whole lot of estimators would tell you to just go looking for them.  That sounds good, but unless the mistake is fairly obvious, it won’t stand out as one entry in a list of hundreds (or thousands).  So now you’re combing through the spreadsheet looking for small deviations.  Maybe you’ll catch a few, maybe you’ll miss a few.  This is where estimators will tell you to do another review, in hopes the second dragnet will catch whatever you overlooked.  So, you start again with the fine-toothed comb, going over every entry.

By this point, you’ve probably seen everything in that estimate several times.  Anything you really analyzed has become familiar to the point where you’re memorizing figures. When people play a matching game, things only “look right” when the relationship they remember stays the same.  It’s happened to me, and I’ve basically gone “blind” to mistakes I was actually looking at.

Artistic rendering of an estimate under review.

 

If we checked in with estimators again, they’d probably tell you that they factor in a contingency to pay for mistakes they couldn’t find.  How much?  Well that really depends on how badly you intend to screw up doesn’t it?  With all that said, it’s probably not too surprising that there’s a lot of turnover in the estimating profession.

However, all is not lost.  For starters, I think it’s important to point out that wherever (mostly) normal people are working, emotions will factor into their behavior.  On the surface, estimating seems to be a strictly facts and figures profession.  People take the job and eventually the facts don’t meet the figures.  Then the estimator succumbs to the stress and seeks alternate employment.  That approach has some obvious problems.  Instead, what if we emotionally connect with the risks and the rewards?  See making a mistake is a risk, catching it is a reward.  That emotional and mental balance promotes agility, creativity, and confidence.

So how does that apply to finding a screw-up on page 6?

Well for starters, you have to connect with all the little things you’ve caught along the way.  Most of the time a little mistake gets swept aside as quickly as possible.  Maybe it seemed embarrassing, or trifling.  Take a second to consider what would have happened if you hadn’t caught it.  Chances are good that some of them would have been pretty serious.  The key here is to take this as a rallying point.

You just caught a costly mistake.  Maybe it was a decimal point, or a typo, or some other subtle detail that would have had big consequences.

Now you’re connecting an emotional reward with spotting subtle details.

Enjoy the moment.

You’re also learning to spot patterns in your work.  Consistently making a mistake you can correct is the long way around.  There’s no point in “rough drafts” that include pointless errors, so you’ll stop making most of them.  By being emotionally connected to your process, you’ll start looking where these errors are likely to hide.

Circling back to finding that mistake on page 6, we must understand that we’re not the sum of our mistakes.  Going looking for every mistake you’ve ever caught is going to doom you by experience.  I’ve been doing this for ten years.  I’ve caught thousands of mistakes in my estimates.  I once had a boss who wanted me to compose a binder listing every single mistake I’d ever found which was to be used as a “checklist” against all future work.  If every job was consistent enough that an item specific checklist was worthwhile, there would be no “estimating” involved.

Instead, I go through the estimate and I allow myself to reminisce about the processes that put each figure on that spreadsheet.  That keeps things familiar without mindlessly memorizing everything I see.  If you’ve ever reminisced about an experience, you’ve doubtlessly recalled thoughts and emotions.  Sometimes you’ll remember a thought, or a feeling that you hadn’t had in years.  As often as not, you’ll remember something tangential to the topic, like the scent of your favorite food when you reminisce about your childhood home.

It works the same way in estimating.  All those little successes in catching an error will suggest themselves as you’re reminiscing your way through today’s spreadsheet.

Bonus points if you look cool doing it!

Bystanders might see what I’ve done and attribute it to experience or painstaking diligence.  I can tell you that I’ve worked with some seriously intense people who had more experience than I do.  They work awfully hard to catch stuff that just pops out for me.

There are some downsides to my approach.  Perhaps the worst of which is that my approach requires sincerity.  You must genuinely feel a reward for finding a mistake.   People in general, and your employer in specific may tend to focus on mistakes as the source of all problems.  Tell your boss that you caught a huge mistake, and they’re likely to only hear that you’re a danger to the business.  It’s difficult to keep your chin up in these situations so you often must keep your own council.  That’s a whole lot harder than it sounds, especially when you’re working with/for insincere people.

Another downside is that it’s easy to get infatuated with your own inventions.  If any part of your process is faulty, no amount of massaging will offset that fact.  I’ve sunk lots of time into constructing elaborate error catching shortcuts that overlooked something critical.  Sometimes these shortcuts would work, other times they wouldn’t.  It was like an ambulance with a dodgy starter.

Every little thought that pops up as your reminiscing won’t be relevant.  People are capable of spotting patterns that don’t really exist.  Unless you’ve arrived at the cause of your mistake, you can’t celebrate catching it.  Playing it fast and loose with what you actually know is guessing, which is worse than being wrong because it’s irresponsible.  Again, everything here depends on sincerity.

It occurs to me that I know a lot of people I know might have read to this point and come up with an equivalency without realizing it.  See it’s super-common for people to think in terms of the proverbial carrot and stick.  Whatever incentive is proposed may be equally substituted with a sufficient punishment without affecting the desired outcome.  This may explain why so many employers cling to the notion that all estimating mistakes are perfectly obvious oversights.  To this way of thinking, an estimator should be motivated by fear of missing stuff.  There’s a huge, gaping hole in this logic.  They’re basing this assessment on omissions found in winning bids.   It’s anywhere from possible to probable that the entire reason you won the job was because of an “omission”.  Nobody (but the estimator) cares about the absolutely perfect estimate that lost the job.  This point of view encourages big contingency funds (sandbagging) which won’t win work in a tight market.

Finally, my approach has a fatal flaw for anyone who started out in a boom.  When it’s easy to win work, there’s less risk in being wrong so standards slip.  Everyone has to start somewhere, so if you’re starting in a boom, seek out an estimator who was successful during a down market.  If they’ll review your work, acknowledge each mistake as a discovery.  Challenge yourself to find them on your own and give yourself credit for improving when you find them.

Hopefully this approach will be as helpful to you as it has been for me.

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© Anton Takken 2018 all rights reserved


Are pricing revisions costing you work?

Sometimes the estimators job isn’t done at the bid deadline.  Clients, Architects, or the Owners Representatives may have questions for the bidders as they review the bids they’ve received.  In some cases, the estimator will need to make revisions to suit the client’s needs, or to facilitate direct comparison against a competitor.  So far, so good.

Estimators are under pressure to respond quickly because the client is planning to award the contract as soon as they are satisfied with the winners bid.   Clients can be very difficult to reach following a bid so it behooves an estimator to make sure their attention doesn’t drift to a competitors bid.  Most contractors pack the calendar with bids so there is always another deadline looming.  This means that every post-deadline revision is taking time away from the next bid.  Leisurely clients with lots of questions rarely understand the estimators need to hustle.

Are pricing revisions costing you work?

“Sam had a terrible feeling that the client wasn’t going to let the meeting end.”

 

Making the right moves

In times of stress and pressure, it’s helpful to prioritize your tasks.  A client requesting a revision to your bid presents a significant reward for the additional work invested.  Compared to an oncoming deadline for a competitive bid, the client’s request will often take priority because it’s more likely to result in a contract award.  However it’s possible that the Client is calling about a small job with limited profitability compared to the upcoming bid.  The estimators purpose is to secure profitable work for their company by controlling risk.  When everything demands speed, accuracy and competitive pricing, the estimator will see the truth in an old adage.

“Fast, Accurate, or Cheap, you can only pick two.”

With time always in short supply, the estimator must constantly decide between delivering a cheap or an accurate revision.  It’s worth pointing out that the estimators’ wages are generally funded out of overhead.  For many firms, estimating is the only advertising or marketing for the firm.  Time sunk into answering endless questions for a client who awards the contract to a competitor is a costly proposition.  While estimators must make decisions considering uncertainty, their bosses see the outcomes as though there was never any doubt.  Post-bid work is rarely noticed unless it leads to, (or costs you) a contract award.  Many estimators have gotten into trouble this way.

Often smaller General Contractors (GC’s) and subcontractors (subs) aren’t qualified to pursue larger projects for established clients.  Smaller projects are more likely to be for “one-off” projects for sole proprietors who’ve never built anything before.  Inexperienced clients and small budgets are constant companions, which brings us to cost-effective design teams.  Here again, the above adage comes into play.  Incomplete, erroneous, and misleading construction documents (CD’s) are common with clients who have neither the time nor the money for a professional design.  Estimators may expect the number of post-bid revisions to be inversely proportional to the professionalism of the CD’s.

Building a pyramid is an iterative process

Not all client questions are  focused on arriving at a defined outcome.  For example, let’s say a client is trying to reduce cost or waste in their project.  They might ask a question intended to generate a data-point which drives their next question.  With each “layer” of inquiry, they believe they’re cutting away the unnecessary, so that each iteration is better value.  We might imagine this process to look like a pyramid where each layer is successively smaller than the preceding one.

Are bid revisions costing you work?

Above: “An elegant process leading to a difficult position”

The pleasing aesthetics of this process are based on several assumptions that seldom hold true in real life.  For starters, estimators who are competitively bidding have market pressure encouraging them to reduce cost and waste from the project.  It takes great individual knowledge and skill to win competitive bids.  Unless the scope of work, or the risk involved in the work has changed, the client is asking the contractor for information to be used against them.  Estimators know this, so the information provided takes this into account.

Providing information that would reduce profitability, or increase risk is obviously detrimental to the contractor.  As much as possible, the contractor will seek to provide answers to the client in terms of reduced scope, or reduced risk.  Clients are quick to notice that anything that can be cheaply omitted, might be cheaply expanded.  This means that every price the contractor provides has the potential to work against them. Once a price for something has been provided, it becomes a “fact”  separated from the conditions that define it.  Clients will consistently remember the cheapest price they heard for something, and woe betide any estimator who tries to change their mind later on.

In situations where the client requests revisions to revisions, the estimator and the client are poring over the same information repeatedly.  Since the earlier revisions are “fact”, there’s a built-in incentive to assume the earlier work was correct.

Are bid revisions costing you work?

“Good news! We’ve defeated the camouflage but now we’re seeing double”

Between the pressure, the drudgery and the desire to move things along, the estimator may be making quick-but-wrong revisions just to get the client to contract.   Clients obsessively focused on culling waste may talk themselves into cutting out critical project scope.  Estimators foolish enough to price their demands will be rewarded with an angry client, who feels cheated when the critical scope must be restored.

Like most things, it’s pretty clear to see where things went wrong in hindsight.  Clients may have several motivations for their actions, and it behooves the estimator to quickly identify what can be done to bring them to a decision in as few iterations as possible.  It’s my considered opinion that there are three client motivations that should inspire patience and diligence in the estimator.

  • Curiosity
  • Testing the contractors
  • Scope to budget alignment

On the contrary, I believe there are three client motivations which should be cause for concern and reservation.

  • Distrust
  • Dishonesty
  • Incompetence

Answering questions that speak to the client’s curiosity, budget, or desire to vet their contractors will give them what they need to enter a contract that’s beneficial to all concerned.  Conversely, questions driven by incompetence, dishonesty, or distrust are likely to move the project further from an honest and practical effort to award the contract.   “Helping” an incompetent client by pretending every ill-advised question is valid is how a lot of estimators end up with a profitless job and an angry client.  It makes little difference whether the client is distrustful or dishonest when their condition prevents them from awarding a contract in good-faith.   Scoundrels will sometimes feign distrust on the grounds that they don’t know enough to properly protect themselves from greedy contractors.  Demands for post-bid breakout pricing to “prove” that the bidders aren’t overcharging is a common and fundamentally dishonest practice.  The goal here is to make the winning bidder compete against the losers’ breakouts.

Imagine watching a 1600 meter race in the Olympics.  The winner is the one who finishes in the least time.  Should it matter if they were winning at the  400 meter mark?

The client intentionally misled the bidders to believe the contract would be awarded in good faith to the lowest bid submitted before the deadline.   Pretending that it’s “too close to call” is the favorite line of the scoundrel.  Extending the “competition” to continually solicit “run-off” bid revisions for better pricing quickly devolves into outright bid shopping.  It should go without saying that the construction industry’s policy of withholding bid results enables this chicanery.

I’ve awarded half-million dollar contracts that were won by less than $50.00.  I did so cheerfully because my risk of the low bidder having missed something was negligible.  While we’re on the topic, I can only think of three ethical and honest reasons to conduct a “run-off” bid.

#1 The project scope has been significantly changed following a budgetary blowout.  This means that contract award based on the original bid is not possible.   This is notably different from having a “run-off” bid where the two or three lowest bidders are asked to deliver Value Engineering (VE) proposals.  This is dishonest because any VE ideas lifted from contractors who weren’t hired constitutes a theft.  Any estimator who participates in this kind of run-off should seek easier ways of helping their competitors!

#2 A contract was terminated after the project started, but before it reached completion.  The contractors who originally bid the job are in a better position to estimate the cost of taking over the project.  Taking over a failed contract presents a lot of risk which will deter bidders.  Asking only the second and third place bidders from the original bid for a run-off bid reduces their competition which may encourage them to bid.

#3 Two or more bidders sent proposals for the exact same amount.  If this is the case, the client should be careful to disclose the actual bid amount so all the affected parties know the client is conducting an honest bid.

So how do we apply all of this?

Estimators who find themselves with a client whose revisions seem endless should create an opportunity to speak directly to the client. Emails, faxes, and messages won’t do because there is no control over the narrators tone in our reader’s imagination.  A direct conversation provides nuance that is essential to diplomacy.

It’s been my experience that offering gentle resistance by presenting questions or your own, can disrupt the iterative patterns to reveal the clients motivations.

For example, I called one client who was on their fifth iteration of the bid in as many hours.  When I was on the line with the client, I explained that whenever a client requests so many changes, I assume I’m not getting them what they need.  This little disruption shifted our dynamic from call and response, to collaboration.  From there I could help them to define their problem, along with thresholds for acceptable solutions.  Working within that understanding, I was able to bring everything to conclusion with one final revision.

That’s not to suggest that all clients will respond as well.  I had a similar situation where I tried the same approach.  This client was only interested in breakout pricing to see “who was really low”.  Everything was presented as though the decision was just one unanswered question away, yet it’s just “too close to call” the original bid.  More than one such client, added scope of work in each revision over the span of several days, then called (to avoid written record)  to say they’d like to hire me if only I would do all the extra work for my original price.

Are bid revisions costing you work?

“If you show them where to cut, you won’t like it when they do.”

I’ve also had GC’s as clients who blustered officiously about how it’s their “standard procedure” to  answer even the most perilous questions from a client.  They didn’t care that it was potentially ruinous to the trust of all parties involved.  A question was asked, and it’s their duty to answer it.  It would be difficult to imagine another situation where someone could honestly work so hard to  appear incompetent, dishonest, and lazy to their client. As a sub, it’s not “good optics” to let a GC put your name on their mistakes.  Rookies at the GC level are particularly likely to cause this problem, which is why their subs won’t follow instructions.

Good reputations can take a lifetime to earn, but only a moment to lose.

Estimators inclined towards a more charitable view of their incompetent or dishonest clients should consider how costly a failed project can be.  The people involved can either generate, or ameliorate the projects risk.  Estimators should consider their part in the projects risk.   How did the pricing revisions affect the project risk?  How did the outcome of your efforts compare to your intentions?  If pricing revisions are costing you work, look back on your efforts to identify where you might have taken a different approach.  Estimating is more than measurements and spreadsheets.  Thinking beyond the obvious process reveals opportunities to set your work apart from competitors.

 

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© Anton Takken 2017 all rights reserved