Imagine this scenario:

• You are about to start work on a large construction project.
• You are one of many contractors with different priorities, each interested in making the most profit for themselves.
• Your work must be performed according to information that you obtain from a series of symbols, diagrams and drawings made available on large sheets of paper (or electronic versions).
• There are several volumes of written documents with additional information that you must follow.
• There are also diagrams that dictate who is to work on specific tasks (out of thousands) at various points in time, in prescribed order.
• Your estimate is based on the cost of labor, materials, equipment and other expenses that will fluctuate (usually higher) over time.
• You will be financing a portion of your efforts throughout the entire time you are working on the project.
• Your work will be subject to inspection by authorities with various interpretations of what constitutes “acceptable” work.
• There will be many changes to your work, interference and conflicts with others, frequent delays, errors, and all types of issues that will affect your work.
• Finally, you are also given a document that contains all of the detailed, specific rules for executing the work you have agreed to perform (the “contract”).

Now I ask you, given the above conditions, wouldn’t you want to get to know the contents of this document in all of its detail?

You may find this surprising, but based on my experience;

• some contractors don’t read their contracts, they only check price and scope,
• few try to negotiate restrictive or unfair terms,
• many don’t get all the documents that make up their contract,
• few contractors really use the contract to manage a construction project.

Even in the case where the contract is reviewed in detail, often it’s placed in a file drawer (usually ignored) until that point in time when the “stuff” has hit the fan and it’s time to call the lawyer.

This practice has led me to label the contract the “Rodney Dangerfield” of construction documents!  It is a document that simply “gets no respect.”  So why is that the case?  Although I can think of many reasons, the short answer is this: contracts are written by lawyers; you’re not supposed to understand them without familiarity with legal jargon and concepts.

A contractor’s reluctance to seek the help of an attorney to review the contract before execution is understandable.  Contracts can be intimidating and a good attorney will command a hefty fee that may seem prohibitive.  With razor-thin profit margins on most projects, every dollar saved is a dollar earned, or so you may think at the beginning of a project.

Unless you are a contractor that has never had any serious problems on your jobs, you know from personal experience that when things go wrong during construction, it’s the language in the contract which dictates the “rules” that are applied to resolve problems.  This is especially the case when serious issues arise which threaten to increase significantly the cost or construction time.  At that point, all verbal agreements, unwritten promises and other informal understandings are forgotten.  Suddenly, the good will and that cooperative “team spirit” that you had enjoyed earlier disappear.  From that point on, every consideration, each decision and all action will be strictly based on what was agreed to in the contract.

If you did not seek expert advice at the beginning, and started without a working knowledge of the contract, you will probably rush to an attorney out of fear when action is required after the problem has reared its ugly head.  Making matters worse, due to your lack of understanding of the contract, you will need to spend more time with your attorney to guide you through the maze of contract clauses to choose the best course of action to take.  Acting out of fear you may even decide to have your attorney draft all your letters for you.

Finally, since you were not following the “rules” of the contract to provide the required timely notice of problems, preparing a record of communications in advance before the issue moved to the “front burner”, you will find that you’re playing catch-up.  Sadly, by then, you might already have spent more in legal fees than you expected, yet you may have only begun to scratch the surface of the problem!

In my experience, it’s the lack of understanding of the contract which causes many construction issues to be mishandled from the beginning.  This is primarily a result of not knowing the requirements in the contract that address how you must communicate and record important issues; the kind of issues that typically lead to increased cost or time of performance on a project.  In those cases, when the issues are not documented according to the contract, the ultimate resolution of the problem will take longer and will be costlier than necessary.  Usually, those issues won’t get resolved until the end of the project and lead to reduced profit or a loss on the project.

Regardless of your distaste for lawyers or your opinion that they are too costly, if there is one time during the entire life of the project when spending money on an attorney makes sense, the initial review of the contract before its execution, would rank as the most important one!

The contract is a document that needs to be thoroughly understood in order to be used actively during construction by applying its rules to the work.  Don’t let your contract be the Rodney Dangerfield of construction documents!

“I get no respect.” – Rodney Dangerfield

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

Those of you who are 50 or older, might assume from the title of this issue that I am referring to some part of our anatomy.  And though there may be some truth to that, I am applying it to a faculty of the mind, a learned skill.

People are losing their writing skills. The evidence is overwhelming!  Look around you, terrible writing is everywhere to be found.  Text messaging has become one of the primary means of communication.  It started being used by young adults in social interaction and has gained acceptance in the business world.  This form of communication, with the main advantage of being able to send bursts of instant messages directly to individuals, uses abbreviations, codes and acronyms instead of words in complete sentences with full meanings.

The effect of the short messaging habit has spilled over into emails and other correspondence.  I am seeing more abbreviations, truncated words, and incomplete thoughts today than ever before.

To make matters worse, the proliferation of software that completes words and auto-corrects spelling has messed up our communications even more.  Since messages are composed quickly (with little or no review), it is often necessary to try to decipher what the sender meant to write when strange messages are received as a result of word changes made by the software.

Please forgive me if I sound “old fashioned” or “traditional”.  But stop to think for a moment about the implications for your business communications.  In construction, where the stakes are very high, why would you rely on communication that is incomplete, vague, or ambiguous, and subject to misinterpretation?

I must admit, I had to adapt to text messaging myself, out of a need to stay in touch with my children and other family members.  I have no problem with text messaging in personal settings, provided you don’t mind having to correct mistakes that are bound to take place often as I mentioned above.

Your business communications, however, deserve to be taken seriously.  Writing is a skill which, like other skills, are the result of habits that need to be practiced in order to keep from losing them.

I have reviewed countless project records in my work as a consultant.  Much of what I have read has been ineffective; confusing, not clear, or difficult to understand.  I believe that one of the reasons many people in this industry don’t document when they should is that they simply have lost the skill to write.  It’s sad, but true.

You may have heard it said that “writing is thinking”.  If that’s the case, then what does today’s writing say about the quality of our thoughts?

Remember: if you don’t use it, you lose it!

(Take action to improve the writing skills of your employees for construction – schedule an in-house seminar for your company).

“We are what we repeatedly do.  Excellence, then, is not an act, but a habit.” – Aristotle

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

Most of us would agree that we should listen to what our lawyer has to say.  After all, you hired a lawyer because you lacked the specialized knowledge that they possess.  Moreover, you are paying dearly for their advice so it makes sense that you should listen.  However, when it comes to following their advice, there are times when it pays to do the opposite.

Let me give you an example.  We were deep in a mediation on a hotel project that my client had completed with considerable difficulty.  My client (a contractor), his lawyer and I had been through the facts, causation, costs and the reasons why he was entitled to be paid what he had requested.  It had been quite a long day, since the owner had also started with a demand for payment from my client.

After our initial presentations and several rounds of negotiations, we had crossed a major hurdle and my client was on the receiving end of a modest offer to settle.  In the first break after crossing that threshold, my client’s attorney was leaning towards accepting the offer.  My client refused to consider the idea at that point with such a low offer.  I also felt there was more financial merit based on the strength of the facts in his case.

There were two or three more rounds of back and forth private meetings, with the mediator showing great frustration to the point of anger with our position.

With each subsequent round, my client’s lawyer was more forceful with his advice that the latest offer should be accepted, fearing that the increased offer would be withdrawn if it was rejected.

The tension in our private caucus room was becoming palpable.  My client’s lawyer was investing a great deal of energy and emotion in his failed efforts to convince my client that he was making a fatal mistake if he rejected the latest offer.

Finally, after several “FINAL” offers, my client reluctantly accepted a settlement.  He was getting several hundred thousand dollars more than when my client’s lawyer began recommending accepting the offer!

Visibly relieved, my client’s lawyer invited us for drinks after the mediation.  I recall how he seemed almost apologetic afterward for having been so forceful in his advice which would have resulted in a much lower settlement for my client.  He was clearly confused about what had taken place and wanted to know how both our client and I appeared to be so undisturbed while those escalating offers were refused.

Our client said – “that’s because we think like contractors.”

As I look back at this experience, I am reminded that not all lawyers are created equal.  I have worked with some who have been excellent negotiators in addition to being good lawyers.  However, I always advise my clients whenever we are about to enter a setting that requires negotiation that it is most important to use your business skills in making a decision.

The lesson learned is that when negotiating, sometimes you shouldn’t follow your lawyer’s advice!

“Smile and say no until your tongue bleeds.” – Harvey Mackay

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

The majority of contractors I have known don’t enjoy having to document their work.  They are of the opinion that construction should be about building things, not writing about them.  You would probably agree with them, right?

Unfortunately, the construction world is not that simple.  Building a project is a challenging undertaking that is loaded with risks.  It is prudent to insist that events be documented so that the risks can be identified and dealt with as much as possible.

So why is it then that contractors don’t like to give written notice or document their work?  I believe the following would be the top five reasons based on my experience:

1. Too busy running the job to write letters. What I call being “knee deep in the thick of thin things.” If this is your excuse, then you’re either doing a poor job as a manager, or you have not learned yet that writing is essential to successful management of a construction project.  You need to build on your planning skills and do a better job delegating the details to others who you manage.
2. Low priority. If you fit this category, then you don’t have a good understanding of the contract. Giving written notice and documenting issues that impact your cost and time for performance are basic requirements of all construction contracts. It is a duty, which if not followed, can result in serious additional risk for your company.
3. Poor communication skills. This is probably more common in construction than in other lines of work. It is also more likely with field supervisory personnel.  Let’s face it, we value field superintendents and foremen on their ability to get the job done, not on their writing skills.  However, with their position on the front lines of the work, they are more likely to detect problems and issues before others.  They can also create the required notice on time and can leave a more accurate record of critical events.
4. Don’t know how. Many employees today belong to a generation that has been text messaging and using social media as their main way of communicating. They are used to writing (and thinking) in short blasts of text, often written in a short-hand abbreviated fashion, based on the need to communicate quickly in those forums. As a result, they have lost their ability to compose complete and coherent sentences through years of misuse. In fact, many never acquired good writing skills at all.  They are partly the product of an educational system that continues to place less emphasis on writing skills.
5. Fear. Most of the time when I ask contractors why they fail to document important issues their answer falls in the “fear of the consequences” category. They usually say “it will make the customer angry”, or “I don’t want to start a paper war”, or “I’m afraid I won’t get my next payment”, or even “I might be terminated if I do”.  Not only are their fears misplaced, but their thinking runs contrary to their contracts!

The lesson learned: good managers know how to document as required by contract, and do so without fear.

Want to learn more about the “PPRICK” principles for project documentation and avoiding claims?  Order my book “Construction Management: Document to Reduce Risk”, or schedule an in-house seminar for your company.

“You fail only if you stop writing.” – Ray Bradbury

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

Many years ago I was managing an industrial project in the state of New York.  The project was difficult enough to build within the time allowed by the contract schedule without any additional interference.  Our site was tightly constrained and all of the exterior work had to be completed before the onset of winter.

My company’s work depended on coordinated crane access by the prime contractor.  Despite all of the promises of cooperation, the access being provided was far less than adequate.  It seemed to me that the prime contractor had another agenda.  Each time we did not get the crane as promised, my work crews were idled at great cost, and the progress of my company’s work continued to be delayed.  In fact, critical delays were developing due to this crane issue.  I had been writing periodic letters requesting the required crane support and also documenting the contractor’s lack of cooperation.

One day, I chose to hand-deliver my latest letter to the new project manager for the prime contractor (their 3^rd site representative).  After reading my letter, the project manager laughed at me as he pinned up my latest letter on the wall next to the others I had sent concerning this issue.  Then, in a mocking tone he looked at me in the eyes and said “this is what we do with your letters”.

It took everything I had to hold back my frustration and anger, but I managed to force a smile and told him politely “that’s okay, you are the 3^rd project manager I have dealt with on this job and I expect to be dealing with the 4^th one before the job is over.

He was replaced a short time later.  It appears that the problem with crane access was but one of many problems this prime contractor had on the project.  There was a consistent track record of mismanagement despite the revolving door of new faces that were sent to “manage” the project.  What was incredible to me was that senior management was not able to identify and correct these mistakes earlier in the process.

I presented a large claim to the prime contractor at the conclusion of our work.  The claim was settled successfully in large part due to the strength of the documentation that I had prepared concerning the crane access issue.

I should note that the majority of the correspondence that I wrote on that project went without response.

When I look back at the events that took place on this project I recognize the valuable lesson that I learned – don’t let intimidation keep you from documenting an issue.

Oh, and by the way, whenever your correspondence goes unanswered on a project that is usually a good indication that you’ve got the facts right.

“The weak have one weapon: the errors of those who think they are strong.” – Georges Bidault

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

I drove through a major snow storm to Le Massif (Quebec province) to enjoy some of the best conditions I have ever seen in the Northeast!  Skiing at Le Massif gives one the illusion that you will wind up in the frozen St. Laurence River below – quite surreal. It’s worth the trip to go there in the middle of the winter; charming, with French music at the base lodge, but be sure to pack your warmest gear!