In Holloway Consulting’s experience as a leading Construction Consultant, both general and specialty contractors on a wide variety of projects are needlessly assuming increasing risks in their contracts. This is one of a series of Holloway posts that are linked to the outline topics to provide construction subcontractors with a better understanding of hidden job risks, along with examples of how Holloway Consulting’s expert advice has helped clients avoid and manage such job risks.
Consulting Consultants
Subcontractor Risks
Submittals
The sooner all submittals are in and approved, the sooner the subcontractor’s exposure to the danger of delaying his own or other contractor’s progress is reduced. Submittals should be completed early in the project. When something goes wrong, the subcontractor does not want to be in a position in which the prime or other subcontractors are able to cite his tardy submittal process as being contributory to the problems. Furthermore, as soon as submittals are approved, the subcontractor is in a position to place orders and firm up prices. Also, and very importantly, Holloway has found that a quick and thorough submittal effort will ensure that the project documentation trail will not become clouded with offensive paper. All submittals and approvals should be logged and filed at the job site in a systematic manner.
Photographs
Holloway’s experiences as consultants tell us that a program of regularly scheduled job progress photos should be embarked upon even before construction begins. Pre-construction conditions shown by photographs can serve to negate claims of damages to existing conditions and claims of negligence. They can also serve as excellent evidence of changed conditions. Further, as-built schedules are very useful in claim preparation and are usually time consuming to compile retrospectively from project documentation. Progress photos often fill in the “gaps” should a claim arise in the future.
Every job should have a camera on-site to record scenes of accidents and situations which may later become the subject of contention. Such situations are alleged by defective work and differing site, or other conditions to which the subcontractor may object. Many contracts require that the owner be supplied regular job site photos but even in the absence of this requirement, the subcontractor should take it upon himself to compile and maintain a complete set of photographs.
Equipment Records
A small tools and equipment inventory should be kept and periodically revised so as to update overhead percentages for change order markup. Major equipment should be constantly accounted for, including dates of transfer on and off the project, and idle and repair periods. A corporate equipment superintendent who transfers equipment from project to project and establishes both internal and external corporate equipment rates is a valuable asset. His records should be computerized for printout by project.
An updated equipment rate schedule should be maintained at the project for change order pricing. Many contracts provide for a particular rate schedule, and in these cases, the equipment should be assigned the appropriate rate immediately upon arrival. When no equipment rate is available, the project personnel should endeavor to obtain owner or prime contractor agreement as to the acceptable rate schedule early in the project, preferably before the first change order is priced.
Equipment records are important to future change orders and claims. This is the area in which Holloway has found that most subcontractors delude themselves regarding actual project equipment costs and often fail to recover a fair amount in claims simply as a result of forgotten equipment or lack of proof of equipment being on-site. The superintendent’s daily diaries should record any equipment arriving, leaving, working, idle or under repair. If such subcontractor records are complete and routinely kept, they will generally be considered evidence of the facts.
Read Holloway’s next post about subcontractor’s construction phase risk management.
Contact Holloway Consulting at 888-545-0666 about your Construction Consultant requirements.
The Holloway Consulting Group, LLC
Construction Consultants
12081 W. Alameda Pkwy., #450
Lakewood, CO 80228-2701
Denver Phone: (303) 984-1941
International Toll Free: (888) 545-0666
Fax: (303) 716-0432
Email: steve.holloway@disputesinconstruction.com
Blog: disputesinconstruction.com
Web: hcgexperts.com
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