How to STOP Losing Money on Changes and Delays

Over the last few weeks, I’ve had the chance to talk with both long-time friends in the industry and some potential new clients. These are small contractors with their lives and personal finances tied up in their businesses.  By small, I mean they are not the mega contractors who have armies of trailer dwelling managers and project engineers. These contractors self-perform much of their work and while their staffs may be small, they do critically important work like renovating schools and military barracks, re-building local roads and replacing old water lines in neighborhoods.  They are often the subs for the mega contractors and actually DO the physical work – not just manage it.

As I talk with these folks, some common themes become clear. Some are good:

  1. Work is plentiful these days.

  2. Contractors are more selective, trying to pursue only work that best suits their skills.

Other themes are worrisome:

  1. Contractors can’t find good help to work in the trades nor in their management ranks.

  2. They are waiting 60-120 days to get paid.

  3. Contract terms from the owner and GC are forever pushing greater risk upon the smaller contractors.

  4. They can barely keep up doing the base contract work, let alone chase payment for changes and delays in a timely manner (those contract terms in #3 above don’t give you much chance).

Among those worrisome themes, #1, #2 and #3 are difficult realities of the construction industry and they are hard, if not impossible, for small contractors to change on their own. However, #4 frustrates me because what it really means is these contractors are losing money! Collecting payments for changes and delays caused by others should be an easy grab but that’s not always the case for the small contractor.  

For a small contractor, catching opportunities to get paid for changes and delays is tough because small contractors don’t have the staff or systems to capture, quantify and communicate these events in a timely manner to the owner or general contractor. Most contract terms dictate that changes in conditions or scope are to be communicated almost immediately and then work must continue (at the subs’ risk). However, many small contractors staff their jobs with only a Foremen or Superintendent who, rightfully so, spends most of their time on the ground overseeing work – not in the trailer sending emails and photos around.  

The small contractors focus mostly on just staying out of trouble on the base contract (such as avoiding delays to the critical path schedule) and I can’t blame them. When given the choice of organizing crews for over-time to ensure we hit a schedule date or trying to get paid for rental pumps to address unforeseen ground water, I would make sure I organize the overtime first and hit my schedule date. Chasing site photos or invoices for water pumps falls off the list.

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But why should small contractors have to choose between a rock (hitting schedule dates) and a hard place (forgoing payment for changes and delays)?  Not having the staff or system to capture payment for these events doesn’t have to be the problem – here’s how we’re going to help.

Mission Critical Operations is launching a new service called “STOP LOSING MONEY!” and its purpose is to help you, the small contractor get paid for changes and delays on your projects.  

To help our contractors STOP LOSING MONEY!, we provide you two services:

  1. Extra Staff: We assign a dedicated Project Engineer to support the customer’s field staff making sure project changes and delays are captured, quantified and communicated in accordance with the contract terms. The Project Engineer provides full time attention to the customer’s field staff, but at a part-time cost thus avoiding the costs and burdens of hiring a full-time employee. We follow-up and chase down owners and GC’s to make sure they follow their own rules compensating our contractors fairly and equitably for changes and delays.
     

  2. Project Management System: We have partnered with PROCORE, the most widely used construction management software tool, to prepare, organize, and disperse all project documentation in an online, secure, 24/7 accessible system – at NO ADDITIONAL COST and WITHOUT OUR CUSTOMERS HAVING TO BUY A LICENSE.  PROCORE gives us the tools to instantly capture, quantify and communicate changes and delays to the GC, owner and design professionals. Claiming to not have received communication about a change or delay in accordance with contract terms is no longer an excuse not to pay.      

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 See our website and posts on Linked In and Facebook for more details.

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 Mission Critical Operations (MC-Ops) is a team of senior construction managers who help small contractors stop losing money on their projects. Our customers do great work but they need help running the administrative side of their projects. We help prepare, organize and disperse critical project documentation ensuring its current and readily accessible. This enables our contractors to get paid for both in-scope work as well as changes, delays and unforeseen conditions that are forced upon them by the owner or other contractors. 

MC-Ops is often retained when their customers are short staffed in headcount and/or skill sets and when their projects are falling behind in schedule, quality and cost performance. MC-Ops provides its customers full-time support at the cost of a part-time employee.