By Michael Wright
Construction projects are inherently complex, and this complexity inevitably leads to risk including risk to the health and well-being of workers, risk of property damage and risk of financial exposure for project participants. Mitigating risk is a daily part of the job for general contractors (GCs). Reducing risk is therefore a key to success and one of the core functions of modern construction platforms such as RedTeam.
In all respects, risk is a function of human behavior. A careless step in a wrong direction can result in a life-changing injury, use of the wrong material can cause catastrophic damage to property, and failure to timely procure a key component of your building project can result in cascading financial damage. Early in my career as a general contractor, I was struck by the variety and breadth of human activities I had personally guaranteed would go just right.
WRITTEN CONTRACTS MITIGATE RISK
Rule No. 1, never assume people know what you know. Memorializing your agreements in written contract documents is one of the most important things a GC can do to mitigate risk. To fully protect your business and projects, every agreement should be written—not just the important agreements.
Good contracts can help resolve problems before they get out of hand, most of the time. With alarming frequency, problems can get out of hand and result in controversy, disputes or even litigation. Once this happens, you’ve begun to lose control of the solution.
One of the biggest tasks for contractors in litigation is a process called discovery, which is literally who said or did what and when, plus all the supporting documentation to prove it. The proliferation of smartphones and iPads means that information could be buried in a lot of places and sifting through the many layers of information to determine accountability makes the discovery process like a never-ending, expensive archaeological dig.
RISK IS EVERYWHERE
Performance documentation. In the construction industry, daily performance documentation is often an inconsistently managed, manual process that can expose contractors to performance documentation risk. There are thousands of activities and essential details associated with every construction project, and the method GCs use to document all of these moving parts can make or break the successful delivery of projects. From daily logs to field reports to meeting minutes and change orders, everything needs to be documented.
Communication breakdowns. Without centralizing communication workflows, GCs can miss critical communications, resulting in costly delays and lost productivity at best, and rework or conflicts among your project team members at worst.
A report released by FMI and Plangrid revealed that construction professionals spend 35 percent of their time on non-optimal activities like looking for project information and data, conflict resolution, and dealing with mistakes and rework. This non-optimal activity accounts for $177.5 billion in labor costs per year in the U.S. alone. Rework, in particular, impacts project profitability. The same report estimated that $31.3 billion of rework in the U.S. in 2018 was caused by poor data and miscommunication.
Inadequate document control. Poor document control can result in excessive time searching through filing cabinets or a myriad of standalone apps for information, misplaced, and lost. Without clear or fully-automated procedures for controlling and archiving documentation, efficiency is lost and risk rises. Each construction project could have hundreds of change orders and each change could add hundreds of pages to a contract. Immediate access to critical documents helps minimize the miscommunication and arguments that halt work and cause project delays.
Information silos. Lack of integration creates data silos that block the flow of critical information resulting in a productivity-killing lack of visibility for the project team. The distributed nature of construction projects often creates a fragmentation of information, leading to errors and inefficiencies that cause major headaches for contractors.
Contractors recognize they can only be as good as their subcontractors. Maintaining good relationships with subcontractors reduces risk and is essential for success.
RedTeam recently released its TeamPlayer App built specifically to manage subcontractor relationships, including collaborative access to documents and transactions such as requests for quotes, subcontract agreements, and change orders. TeamPlayer also supports preparation, digital execution, submission and negotiation of applications for payment. The overall result is more efficiency, reduced risk, greater accountability, better compliance, and vastly improved subcontractor relationships.
RedTeam also recently acquired the Fieldlens App. Fieldlens accelerates RedTeam’s ability to fully leverage the power of smart personal devices on jobsites to better facilitate instant access to project information, support more robust real-time communication, and fully transform how construction project teams work together on jobsites.
Fieldlens boosts productivity by helping contractors manage and markup design drawings and by helping coordinate jobsite collaboration with intuitive messaging, keeping teams focused on emerging critical issues. Users create “posts” directed to one or more colleagues on their project teams, which may include annotated drawings, pictures, observations, such as weather, and references to contract documents. Posts can alert team members of further contractual direction or responses.
ONE PLATFORM BUILT TO MANAGE RISK
Developed by contractors for contractors, RedTeam’s construction platform contains built-in functionality that streamlines field and project workflows and facilitates online collaboration.
While there are many point solutions that can provide pieces and parts of a comprehensive platform, fragmented information archives and gaps in workflows create new risks for contractors. RedTeam’s deep domain expertise enables us to deliver construction technology solutions that conform to standard protocols of commercial construction contracts.
RedTeam’s comprehensive construction platform ensures that your information is organized in a unified environment and real-time project information accessible anytime, anywhere, allowing all team members to seamlessly review and respond to issues as they arise.
About the author:
Michael Wright is CEO of RedTeam Software. With a background as a commercial general contractor with hands-on experience in all aspects of commercial construction, Wright developed RedTeam as a comprehensive cloud-based solution for construction project and accounting management built by contractors for contractors. For more, visit www.redteam.com.
Modern Contractor Solutions, March 2021
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