Protecting Your Business

Words: John SwindalWords: John Swindal

The Swindal Group (www.swindalgroup.com) is a full-service construction consulting company providing specialty contractors with practical advice on contract formation, contract review, contract revision, contract negotiation, litigation strategy, document review, general business planning, strategic planning, and contract management strategies. John B. Swindal (jbswindal@swindalgroup.com) is the Managing Director of the Swindal Group.

2018 certainly sped by with its share of triumphs, challenges, and lessons learned for us at the Swindal Group. It is our hope that economic momentum and growth in the industry continues thereby creating opportunities for masonry contractors across our nation. The widespread economic growth in the United States puts some of our MCAA members in a unique position as we look forward to 2019: selectively identifying projects to bid as opposed to white-knuckle bidding all jobs with the hope of getting one. As this paradigm shifts let us all remember a couple things to protect our near and long-term futures: who are we bidding and how are we bidding? As we are all aware, even though the inventory of jobs bidding increases, there is not a commensurate increase in qualified general contractors and/or construction managers. When an upcoming project appears to be a great fit for your company, take a close look at the potential bidders. If you peruse the bid list and none of the names look familiar, take the extra step with each of the unfamiliar company names. An internet search is a good start but asking around to other subcontractors in the area is often more telling. Ask them about payment habits, field personnel, project management personnel, and company culture. If there are troubling signs on any of these important issues, it should be a factor in whether you price the job (and ultimately how you price the job). Another important issue for us to remember is that even though economic conditions are encouraging Owners / Developers to build more, no one is encouraging them to pay more for the construction itself. The market has yet to adjust for the increased cost in project administration (silica management, individualized contractors “administrative / billing” software, BIM coordination, separating of waste on jobsites) because most of our micro-economies have been so tight that even though we incurred some of these “soft” costs we were unwilling or unable to charge upstream for reimbursement. Now is the time to double and triple check the Contract Documents (specifications and general conditions) to identify and account for some of these “soft” administrative costs and include them in your pricing. While you should absolutely include them in your pricing, also alert your customers that you have included these costs in your bid. Now is the time to try and incorporate these small dollar items in your pricing so that the market can adjust accordingly while it can bear it. 2019 looks to be very promising for our industry and we hope for each one of you. Until then we wish you a safe and Happy Holiday Season! (Nothing contained in this article is intended to convey, constitute or be construed as legal advice.)

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