Modern Contractor Solutions November 2024 - 14

management solution
CUSTOMER SERVICE
Stick to the Plan
don't do more than your contract requires
By George Hedley
I
t's time to stand up for what's right. As a contractor, you're required
to build per your contract-no more and no less. But often customers
demand you do more than you're contracted for. This can include
additional free work, extra move-ins, overtime to meet their delayed
schedules, starts and stops which reduce production, incomplete plans
which delay installations, slow approval of shop drawings or changeorder
requests, jobs not ready when you're asked to start work, and the
list goes on!
The old days of " the customer is always right " are over. Most general
contracts and subcontractors are awarded based solely on the lowest
price for the exact scope of work and terms specified for a project.
There are now more contractors than profitable work available to build.
This produces an excessive number of low-priced bidders. Therefore,
construction customers have increased the project requirements for
contractors, gotten aggressive, and taken advantage of the situation.
The typical scenario is for developers and construction project owners
to solicit as many bids as they can, and then push low bidders to
include more than proposed at lower prices to win contracts. The
trickle-down effect then permeates down from the general contractor to
subcontractors to suppliers, and thus reduces the opportunity for every
company to make a reasonable profit.
The results are not great: Low-price contractors struggle to provide
the best possible quality when not getting paid appropriately despite
providing additional services and excellent workmanship.
So, what's the solution? In the past, contractors' bids included a little
slop, extra money, and enough profit to take care of their customers
while not being too aggressive enforcing their contracts, managing
change-order requests, and demanding prompt payment. Without any
extra cushion or money, contractors are now faced with an ethical
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NOVEMBER 2024
dilemma. Should they continue to put their customer relationships
first, even though they're treated as commodities by customers? Or
should they manage their contracts like their tough attorneys would like
them to?
EYE FOR AN EYE
It's time for contractors to take a stand and treat customers as they
are treated. This means: " No more Mr. Nice Guy. " When customers
ask you to cut your bid, lower your price, and throw in a few extras at
no charge, do they deserve to be treated like royalty? When they don't
approve legitimate change-order requests promptly, delay getting back
to you on requests for information, ask you to change your schedule or
work overtime for free, or pay you slowly, enough is enough! It's time
to give them the same treatment they give you. The time is now to start
managing your contract like a junkyard dog and getting only what you're
contracted for and deserve.
NO SECOND-CLASS CONTRACTORS
Being treated like a second-class contractor is unprofitable. To make
any money in construction today, your bid must be complete and lean
to win work. Therefore, bids can only include the minimum required
by the plans and specifications. Remember, you were hired to do only
what the contract says. And you don't have any extra money to throw
in a few additional items to make the customer happy or avoid conflicts
out in the field. You must be firm but fair, get tough, and only do what
you've been hired to do for the money you agreed to charge. You're only
required to do what your contract includes. In addition, most general
contracts require timely responses to all requests, prompt change-order
approval before you start the work, no verbal agreements, no free work
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Modern Contractor Solutions November 2024

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