Itīs about time
Trade contractors who are providing walls and ceilings installation work for the construction industry are frequently beset by problems relating to project schedule requirements. In fact, of the scope, time, cost and quality components of a construction project, the issue of time, as relating to the construction schedule, is the source of the greatest frequency of disputes. By developing a strategy for dealing with this troublesome issue, the trade contractor can increase profitability and improve many client relationships.
The basic causes of problems often originate in an early phase of the project. These problems are not identified and resolved because no single entity has complete understanding or control of project risk factors. Problems perpetuate and escalate in intensity when they become an inherent factor in the project.
In the design phase, it is rarely the case that the project designer (architect or engineer) or the project owner will have the scheduling expertise to produce an accurate estimate of an appropriate time duration for construciton of the project. Owners are demanding compressed construction schedules due to rapidly changing technology, the cost of construction financing, and the need to shorten product development times. As a result, a project may have an unrealistic contractual completion date established before any contractor sees the construction documents.
The traditional delivery system, whereby a general contractor bids or negotiates a fixed price contract and assumes full responsibility for completion of the project, is still prevalent in the industry. After award of this contract, the general contractor must prepare the construction schedule which integrates the work of numerous trade contractors to provide a completion date which is desired or required. The general contractor usually is not a technical expert with respect to the work of all trades. As a result, the initial construction schedule may be unrealistic despite the best efforts of the general contractor to produce a workable plan.
During the progress of the project, additional problems tend to develop. The walls and ceilings trade contractor's work at the site usually is somewhat dependent on the work of preceeding trade contractors. In the typical situation, substrates or supporting structures for walls and ceilings must be prepared or provided by others. The project may suffer early delays for a variety of reasons while the project completion date remains the same. It is not unusual for walls and ceilings installers to be informed that they are "behind schedule" when they first commence work at the site.
The general contractor has a duty to manage, coordinate, enforce and update the project schedule. This duty is owed to both the owner and the various trade contractors. Arbitrarily shortening the durations (crashing) of activities occurring later in the project to compensate for delays to preceeding activities imposes an unreasonable burden on those whose activity durations are shortened. The usual results for the quality of the finished product, reduction of worker productivity, general animosity between project participants, and decreased profitability.
The problems previously described occur with such frequency that one might think they are required to be incorporated into the project by some obscure government decree. In fact, opportunities will exist to eliminate or mitigate these issues. Risk identification, planning, and communication by the trade contractor can reduce schedule-related risks. Time invested in these activities is not wasted; it is an investment dedicated to producing a more profitable project.
Know The Risks
The first effort at risk identification should occur in the bidding phase. Trade contractors frequently submit bids which are based on incomplete sets of construction documents. This practice results in an offer to enter into a contract when many of the terms and conditions of the contract are unknown. A brief examination of the "front end" documents may identify unrealistic expectations of the owner. It is not possible for the trade contractor to anticipate the total project construction duration, but contractual completion dates and liquidated damages in the bidding documents are clear indicators of trouble on the horizon.
Submitting a very basic preliminary schedule of the trade contractor's work activities with the bid, and incorporating that schedule into the bid, can be a very effective risk management strategy. This clearly notifies the general contractor that the bid price is contingent on the allocation of sufficient time to perform the work. The schedule becomes a multi-purpose tool which communicates information to the general contractor, establishes some basic rights for the trade contractor, and is a positive indication of the trade contractor's professionalism.
The prospect of submitting a schedule with a bid may appear to be too time consuming considering that the majority of bids will be unsuccessful. Actually, this can be accomplished with minimal effort. Sophisticated scheduling programs and minutely detailed schedules are unnecessary. Utilizing a simple bar (Gantt) chart, it is only necessary to show a few basic activities which comprise the total work. Time durations should be indicated in days or weeks. Calendar dates can not be indicated because the start dates are not known at this time. Depedencies can be vaguely indicated by relative locations of activity lines. It is not necessary to precisely define relationships.
Trade contractor work activities tend to repeat for most projects. Duration times are the variables. An in-house bar chart template can be prepared with all normally occurring activites listed on the template. After preparing the cost estimate, the estimator simply indicates the duration required for each activity. The information needed to calculate durations is a natural byproduct of the cost estimate. Worker days divided by average crew size equals duration.
If the work, by nature, is normally subject to delays due to weather or other forces which should reasonably be anticipated, it is advisable to add such delay time to the applicable activity duration. If any materials for the project are subject to lengthy procurement lead times, or complex shop drawings are required, it is vital that these processes are indicated in the schedule.
The general contractor will enter into negotiations (the auction) with various trade contractors after the general construction contract is awarded. Negotiations can be so intensely focued on price that other risk hazards are unnoticed. The subcontract general conditions should be studied carefully.
Carefully Review Contracts
Standardized subcontract agreement documents, which include general conditions, have been readily available for some time. Some of them have been tested by the courts and they may provide a reasonably equitable distribution of risk between the general contractor and the subcontractor. In many cases, general contractors have not accepted these documents and have created documents which impose onerous burdens on the subcontractor. In fact, there are recent indications that the Associated General Contractors is preparing to abandon document 640, a model subcontract agreement which the AGC helped to create.
Beware of signing any subcontract agreement which has been created by the general contractor. These agreements frequently strip all trade contractor rights with respect to scheduling input, work sequence, and claims for delay or interference. Again, planning and communications can provide some measure of protection. The trade contractor should establish is rights by including some terms and conditions as an integral component of its original bid. These rights can be established through the use of the preliminary schedule described previously, by incorporation of a standard set of terms and conditions created by the trade contractors, by reference to the American Institute of Architects document 401, or by other means deemed by the trade contractor to be most advantageous.
Rights established at the time of bidding must be preserved during final pre-award negotiations with the general contractor. At this time there can be such intense focus on the contract price that the trade contractor may be willing to sign any agreement which includes the negotiated price. The written agreement will be construed as the entire understanding between the parties and terms contained therein will be binding. Rights relinquished at this time can never be recovered.
Having successfully resolved contractual issues, the potential for disputes will be reduced and the trade contractor's construction phase project management can be profit oriented instead of crisis oriented. It is reasonable to expect that the work will be coordinated to proceed in some logical sequence and without delay or interference by others. Also, the general contractor will be expected to prepare and update the project schedule on a timely basis to allow the trade contractor to schedule its work.
Management of time-related issues through the trade contractor's cost accounting system is usually not successful because this is a reactive management technique. By the time productivity data is received from the field and processed, problems can be identified but they can not be eliminated or mitigated. The trade contractor should trim field supervisors with regard to early recognition and reporting of variances relating to the actual sequencing of work at the site.
Upon confirmation of a field problem, the general contractor should be immediately notified that the trade contractor intends to maintain all rights and remedies existing in the contract. An initial notification which is hostile or confrontational is counterproductive; a simple statement of the facts in most effective. Prompt communication will ensure compliance with contractual notification requirements, will avoid inadvertant waiver of breach by the trade contractor, and can result in conflict resolutions agreeable to all parties.
The cliche that says "time is money" was not originated for the benefit of walls and ceilings contractors, but it speaks directly to a critical aspect of their operation. In a competitive business environment, proper management of this issue not only increases profits, it may become essential for business survival.
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