Masonry Magazine February 2008 Page. 47
4. Conduct a pre-job site review
Before you sign any contract, schedule a pre-job site review with your project manager and superintendent. Walk the job and review the project plans and logistic concerns that can cause you grief later. Every job looks different in person than on paper.
Things to concider include:
* Access
* Parking
* Mobilization
* Staging area
* Power availability
* Phone availability
* Water availability
* Project office location
* Storage yard access
* Soil conditions
* Demolition required
* Clearing required
* Neighboring property
* Protection Required
* Hazards
* Street improvements
* Location of underground
5. Review the job schedule
Before committing to any project, assure you completely understand and agree with the project schedule. Lost job profits generally can be attributed to improper scheduling of crews, poor supervision and lack of field coordination. A schedule that's too optimistic will result in a crunch at the end of the project, which costs everyone money. Be careful to verify that your major subcontractor and suppliers can man the project to meet the schedule. Look for delay and damage clauses contained within the contract. Also, look at how delay charges will be transferred through to subcontractors if they don't perform. Consider issues like weather delays, strikes, material shortages, etc. when reviewing every contract. Verify how you can remedy situations where you are being delayed by the project owner or a subcontractor not performing as well.
6. Complete a project checklist
When reviewing construction contracts, use this simple project checklist so you and your project team won't overlook important items.
On the list be sure to include:
* Scope of work
* Inclusions & exclusions
* Plans & specifications
* Project schedule & manpower
* Insurance requirements
* Bonding requirements
* Payment procedures
* Cash flow requirements
* Person(s) authorized to sign
* Change order procedures
* Dispute resolution methods
* Notice required on issues
* Delay, claims & protests
* Request for information
* Shop drawings & submittals
* Meetings required to attend
* Safety requirements
* Permit requirements
* Site access, logistics & parking
* Special tools & equipment required
* Contract close-out procedures
* Final payment procedures
7. Verify project funding
Every general contractor and subcontractor has the right to know that projects have adequate funds to complete them, plus a reasonable reserve for unforseen changes and contingencies. So, always ask for proof of funding. It can be awkward to ask, so I often tell customers that my banker or bonding company won't let us sign a contract without assurance there is money set aside to complete the project. Doing jobs without getting paid isn't any fun.
8. Read complete contract
Signing a contract prepared by someone else can be scary. The days of a handshake contract are long gone. Today, contracting is about contracts. If you don't understand what you are signing, you won't stay in business long. Many contacts contain clauses that are one-sided and unfair.
Carefully review contract clauses dealing with such issues as:
* Indemnification
* Authorizations, notices, approvals and administration
* Conflict resolution and disputes
* Arbitration versus court
* Schedule issues (failure to perform, delays and weather, acceleration and termination):
* Change orders and back charges
* Cleanup and supervision.
Every construction company must have a good construction attorney. Meet with your attorney at least twice a year. List out the most important "red flag" clauses to look for and decide what you will and will not sign. Remember, you have the right to sign only what you agree with. Never sign an unfair contract. If you are being asked to sign something you feel is unfair, meet with your customer and negotiate fair terms agreeable to both parties. If they won't budge, it is your choice. Weigh the risk of signing and agreeing to clauses that are unbalanced and then make a decision based on a clear understanding of what you are in for. Some contractors review a contract and then cross out the inappropriate clauses or change what they don't agree with, initial the changes, and then sign the contract. This is not a guaranteed way to win a dispute and, in some states, this practice will not hold up in court.
9. Execute contract
The construction business is risky enough without unfair contracts. So, before you execute any contract, follow these nine steps and start out every project on a fair and level playing field. IMAS
Best-selling author and professional speaker George Hedley helps entrepreneurs and contractors build businesses that work. He is the author of the "The Business Success Blueprint Series" available in eight workbook and audio CD sets. Contact him to present to your organization on his proven system to build profits, people, customers and wealth. Construction company owners are invited to attend his two-day Profit-Builder Circle boot camps. Email George at gh@hardhatpresentations.com to receive a free copy of his book, "Everything Contractors Know About Making A Profit, or signup for his free, monthly e newsletter. For more information, call 800-851-8553, or visit his Web site and bookstore at www.hardhatpresentations.com.
George Hedley, HARDHAT Presentations, 3189-B Airway Ave., Costa Mesa, CA 92626, Phone: 800-851-8553, Fax: 714-437-1125