Enhance margin through proper planning.
The majority of successful commercial, industrial and public works construction projects contain scheduling clauses in contracts that require adherence to a Baseline Schedule that properly connects the scope of work and duration to predecessor and successor activities. A Baseline Schedule that does not contain appropriate logic ties can expose the prime contractor and other subcontractors to increased costs in the form of delays, acceleration, trade stacking and other inefficiencies.
Construct the Project Schedule as Part of the Procurement Process
Surprisingly, those involved in the procurement for some construction companies have little to no practical experience in managing a construction project or putting together a construction schedule. It is important that those responsible for bidding a project, building a project and scheduling the project, to coordinate their expertise to make sure that the underlying assumptions involved in the bid are validated through a realistic lens. This is especially the case when examining construction work that is seasonally dependent.
The person responsible for building the schedule for a project should be involved with the estimator and the project personnel to understand the competing perspectives and the various assumptions both make when bidding and building a construction project. Reliance on invalid assumptions concerning activity duration during the bidding process can result in disastrous cost increases for responsible party(s). The negative consequences include, but are not limited to, liquidated damages, actual damages and consequential damages.
Conversely, integration between the procurement and the project team prior to bid can allow for more realistic assumptions about the work and accuracy in terms of costs and potential profit margins. This translates to reliability and confidence from those involved including owners, prime contractors and subcontractors.
For more information, contact the Milo D. Miller Law Group, P.C. at 720-306-7733.