August 14th, 2019
problems in construction

My Project Is In Trouble – Now What? (Part 1)

This is the first in a three-part series dealing with problems in construction projects.  In this series, we will highlight trends facing the design / construction industry and the challenges they present as building owners try to advance projects.  In Part 2, we will discuss what it means to be “in trouble” in the first place and the best practices for maximizing your chance of success.   The third and final post of this series will outline strategies for dealing with trouble once you are there.  While some items and examples apply to public sector projects, the principles hold true regardless of the project type.

Part 1 – Trends and Problems in Construction and Design

It’s two weeks before the kids are scheduled to arrive at school, and the place is a mess.  The project was supposed to be done two weeks ago, but the mechanical units are not set or even connected, let alone running.  The ceilings still have not been installed.  There are wires all over.  There is a leak in the roof.  And the dust.  It. Is. Everywhere.  How will this ever be ready in time?

Unfortunately, situations like this are happening more frequently.  By some measures, two-thirds of facility construction projects run into to trouble with aspects such as scope, schedule, or cost.  What can you do to maximize your chances of success?  How do you know when you are in trouble before it’s too late?  And once there, how do you get the work back on track?

To address these problems in construction, we must first understand the trends and challenges facing building owners/managers, design professionals, and contractors.

Low-Bid Format

For public sector projects in New Jersey, Owners are forced to award construction projects to the “lowest responsive bidder”.  Even when a contractor has an established reputation of poor quality, pushing change orders, and/or mismanaged schedules, the contractor must be awarded the project, as long as their credentials and paperwork are in order.

This presents some problems in the construction process as the competitive nature of this process encourages some bidders to undercut their pricing, hoping to make up the difference in change orders, strong-arming subcontractors/vendors, or circumventing prevailing wage requirements.  Even when a bidder makes a legitimate error in their pricing, they will often take the job anyway, rather than risk loss of a project.

Reduced Construction Timelines

Especially in private sector projects, where production and profits are tied to the completion of a project, downtime must be kept to a minimum. Completing a school renovation or capital improvement project in the summer is becoming more challenging, as summer breaks are shorter, and school facilities are used year-round for extended athletic, academic, and community programs.

Budget cycles, at least in the public school sector, often mean the bidding and material procurement timelines are shortened.  If a project cannot be bid or awarded until April because that is when the annual budget is approved, that leaves little time to procure the necessary materials, especially long-lead items, before the building is ready for work to begin.

Labor and Material Availability

Before the great recession, it was easier to secure products because manufacturers maintained a stock of standard materials, equipment, and fixtures.  Today however, many manufacturers have shifted closer to a “made to order” approach to minimize their risk.

Add to this, the fact that construction work across the country is at record high levels.  Manufacturers of certain products have trouble keeping up with the high demand, meaning lead times for securing products are being extended.  (At the time of this writing, production for aluminum windows, for example, has extended to 16-20 weeks from the approval of shop drawings.)

Of course, with the high rate of construction work comes a high demand for labor.  Record low unemployment, combined with a shortage of skilled labor and diminishing support for vocational education, equates to problems in construction with extra hurdles in time, cost, and quality of work.

More Complicated Systems and Regulations

Contractors and even design professionals can easily get used to certain code and engineering requirements, without realizing construction codes have changed.  Just because “that’s the way we have always done it” doesn’t mean it meets the current codes, best practices, or the specific goals of a project.

On top of that, mechanical, lighting, and even plumbing systems are becoming more complicated to manage and control, as these systems are updated to meet current energy codes and sustainability goals.  This is one of the relatively newer problems in construction as design, fabrication, installation, and programming for these systems require a higher level of skill than previously needed.

Projects seeking certification in a sustainability program such as Leadership in Energy and Environmental Design (LEED) or the Living Building Challenge will require an even higher degree of design and construction compliance.  In many of these programs, the minimum requirements have been raised in an effort to challenge the market and keep the industry moving toward higher levels of sustainability.  This often requires creative design solutions, a more integrative design process, and more documentation to prove compliance.

Delay Tactic Mentality

Unfortunately, there are contractors who purposely try to slow down the project to give them more time or a reason to seek additional compensation.  Trying to shift risk and blame to the owner and architect, the tactics involve trying to overwhelm the architect with frequent and repeated requests for information (even when information is already provided in the construction documents) or change order proposals (for work that is already in the contract).  This detracts attention away from advancing the project.

It is also common to submit a large quantity of submittals and shop drawings at once, often way ahead of when the information is required.  With standard contracts, the design team is generally allowed 10-15 working days to review submittals (depending if engineering/consultant review is also required), so when 50+ submittals are sent in at once, the contractor can start to claim delay if they are not reviewed and approved within that timeframe.

Being aware of these problems in construction is critical to understanding how to properly prepare design documentation for bidding and construction.  Check back for Part 2, where we will outline a series of best practices that can maximize your chances at success.

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