Presentation on theme: "Construction contract management You are the Managing director of a large construction company. Can you make the right decisions to win the contract for."— Presentation transcript:
Construction contract management You are the Managing director of a large construction company. Can you make the right decisions to win the contract for your company, make the work profitable and ultimately save your job
You receive the contract documentation to build a multi-story apartment block
You have been loosing too many contracts at the tendering stage lately Your rival companies have been winning numerous contracts and expanding their business. The shareholders and the board of directors are putting pressure on you to win the contract to construct the apartment block, things are beginning to get a bit desperate…You call a meeting with your contracts manager and his team….Its decision time…
What should you do…? Tender for the contract in your usual format and hope you win the contract Offer the client a contract which is stacked with penalty clauses which could be very favourable for the client to guarantee you get the work Re-structure your tendering Policy and try to beat your rivals by employing new building techniques and cutting down on your costs Put pressure on your contracts Manager to cut the price in your tender and offer a quick completion date that the client cant get from any other offer to seal the deal
You have been sacked! The board of directors feel you have shown no innovation !
Congratulations It appears you have made the right decision your company needs to update its tendering methods!.
Hmm… Well your colleagues are a little disappointed but you have averted a crisis for the moment, but the penalty clauses may catch up with the company at a later stage
Revolution! The contracts management team are unhappy with the situation you have placed them in because they feel the company can't meet unrealistic deadlines. The team have ed the board to complain about your actions! The board call an extraordinary general meeting to discuss your actions, they decide that you have put the contracts team under undue pressure and therefore have no option but to terminate your contract.
Starting the work : Can you meet your contractual obligations ? The job starts well enough, the site has been cleared, the building set out, the foundations have been excavated and have been completed to ground slab level. You are ready continue with the build when your workforce strike due to a wage dispute. They were promised £ 180 pounds per day but they are only being paid £ 140
The job has stopped, what should you do…? Sack the workforce and employ new people Find a Compromise and meet the men half way plus a bonus payment for early completion Pay the men what you promised them Scrap the current pay scheme and introduce an incentive bonus scheme
Congratulations It appears you have made the right decision but will you have the money to pay the men a bonus if the contract comes in early
Hmm… This leaves the workforce feeling a bit betrayed but in the main they are willing to go along with it providing they earn a decent weekly salary. This situation is a little precarious for the company as the men could leave when a better offer comes along
Disaster The job went massively over the budget due to the wage bill. This was your companies last chance saloon and you have blown it. The company have gone bust and your left out of work …..bye bye
Material shortage The company that you employ to supply you with concrete are having problems at their plant, they currently have four concrete trucks out of action. Progress is slow because of this and the job has fallen behind the programme by two weeks already
What should you do next…? Accept it and hope that you can make the time up over the coming weeks Drop the concrete company and employ a new one Use another company until the contracted company sort out their problems Put pressure on the contracted company with legal action as they are not complying with the terms of the contract
Good decision… This should keep everyone happy. The work can progress the concrete company wont be dropped ( but may incur a penalty ) and you wont have too get involved in legal tangles…
The bricklayers aren`t up to scratch. Their work is poor and the clerk of works has condemned four walls they have built. What should you do ? Ask them to improve their standards, warning them that if they dont they will have their contracts terminated Sack the bricklayers, employ new gangs Put the bricklayers through an on-site skills test by building a sample wall. Employ the best brickies available and pay them more money
Bad news You have sacked the bricklayers and not replaced them quick enough. The job is further delayed and you are history sunshine!
A good move The brickies improve and the job progresses, well done
Bad move The new gang are good but cost you a critical amount of wages. The other tradesmen find out about their pay and bang youve got a disgruntled workforce
Bad move If time wasnt of the essence this would be a humanistic approach, giving the brickies a chance, but time is against you and in business youve got to drop sentiment. The job falls further behind and you are demoted to the junior management ranks
Rall y This should work, you have given the company enough chances and you need a more reliable concrete company. However the new company might be no better. More questions lie ahead
The job is moving on Things are going well the workforce is happy and you are running to the programme of work on time
Fatality on site There has been a tragic accident on site and the HSE have placed a prohibition notice against the site, you cant work. How can you progress and keep your workforce on board.
What should you do next…? You must redeploy your workforce to other sites Temporarily. While keeping a skeleton staff to carry out menial tasks such as repair, stock taking and tidying up the site until the notice is lifted Let the HSE do their work and wait until the notice is lifted and carry on as normal Be strong and ride the storm. Strength from the leadership at this time is paramount dont worry about the Investigation, work will commence in two weeks time Ignore the notice they have proved nothing yet it probably isn`t your companies fault
The best decision This is the best option of all, you must comply with the HSE but at the same time you have to keep your workforce earning a living. There are certain tasks that can be carried out. Ie stock taking tidying and repairing equipment.
Hmmmm This is an option - but you really should be setting out a programme of tasks as in option one. You should redeploy your workforce or they may seek employment somewhere else. It could have problems
This could back fire You could appear to be arrogant and not as co-operative as you might be. This could upset the HSE at a time when you really need to help them and assist the investigation. You do need to be strong but an air of arrogance can be a weakness. Be careful
Disaster The notice is enforced you must comply failure to do so loses you your job. Bye bye
Severe weather High winds followed by four weeks of frost are causing havoc with the programme. The upper floors of the building are progressing slowly due to the high winds, the minus 6 temperatures have delayed the concrete pour and the brickies can`t lay bricks in the frosty conditions
What should you do next…? Ignore the weather, the Site is falling behind the programme and you must continue and hope the weather breaks Stop work or risk material wastage or even the workers lives. You will just have to wait until the weather breaks Hire gas heaters to keep the Temperature high enough to keep laying bricks and pouring concrete Gas heaters are too expensive to run, making the progress Uneconomical. Why not cover the Brickwork with sheets and hope the temperature is no lower than Minus 2. Pour the upper floor concrete slabs when the wind drops
Disastrous The weather is king here. High winds can cause terrible accidents with cranes and lifting equipment. Frosty weather ruins the wet mortar in brickwork and will collapse or be condemned by the clerk of works
Hmmmmmm Stopping work is an option but the lack of progression could be damaging
Probably the best option… but This is a short term option but it can work out costly.
Hmmmm This is the most common solution but you are taking a chance on the low temperatures. Frost sheet will protect wet mortar and concrete down to about minus 1. this could backfire on you
The situation worsens The job falls behind a further two weeks because the concrete company can`t get the parts to repair the trucks soon enough. You have made a fundamental error here you should have insisted that your project manager took quick decisive action You are fired !
Legal action should be the last resort ! This is a bit heavy handed but it can force the company to sort their problems out. However it could also ruin the company and cause them to go into receivership. It may work it may not but you are possibly wasting precious time. The consequences may come back to haunt you…
This is disastrous Unfortunately you are unable to recruit a new experienced workforce and the work is stalled. The delays stack up and days turn into weeks, you manage to recruit some workers but its too little too late. The client is forced to terminate the contract with you and takes legal action. The board of directors sack you in an attempt to save the company… You are history, bye, bye
Method statement Following the fatal accident the HSE have set a number of conditions that you must adhere to. One of the conditions is to renew your health and safety documentation including a new method statement and risk assessments for all work activities.
Which method statement format should you choose…? One which focuses On health and safety Issues whatever the cost in operational Activity restrictions. This will impress the HSE A method statement which is quick too produce and easy to implement because more delays are the last thing you want One which covers The basics and addresses the things the HSE have Outlined, but the Sub contractors can produce their own A concise method Statement, covering all operational Activities which is adhered to by all who work on the site
Too difficult to work with This is a good method statement in terms of its intentions, but the implementation of it is proving impossible. The job falls behind and the company brings in a new MD, sadly you are moved onto junior management
Hmmmmmm You might just get away with this but the simplicity of the statement may not cover all eventualities…… time will tell Mr Managing director
Oooops - big time You omitted the sub contractors from your method statement. This is a fundamental mistake and you are fired!
Well done! A method statement from the main contractor should cover anyone who works on the site. The HSE are happy and things progress,
Theft The other night your store cabin was raided and all the expensive ironmongery and fittings were stolen. The thieves haven't been caught because your CCTV wasnt working properly and it is suspected that the security guard was asleep – something he denies and says he just didnt see them.
What should you do…? Sack the security guard and employ someone else Get some new CCTV cameras Re- train the security personnel and give him two weeks off work to recover from the stress Request a new security guard from the security company and use guard dogs
Wrong move ! He hasn`t been found guilty of this crime and he denies that he was asleep, you have no legal grounds to sack him and doing so has just cost your company a substantial amount of money due to wrongful dismissal.
Hmmmmmm This may work but it doesn't address everything fully, you still have the same security guard and in general this seems like too little too late. This may come back to haunt you!
A bit weak This makes the company look soft on crime and the staff are left bemused at your blasé attitude
Well done! This is the right move the guard has become a bit lax and the dogs are a good change of security policy – you look like you mean business in terms of improved security
Trade conflict The programme of work has been so badly interrupted due to one thing or another that your programme of work has been thrown into disarray.Consequently the different trades on site are no longer in syncand the work areas are over crowded with electricians, Joiners and plumbers. This must be resolved as a matter of urgency
What should you do next…? Delay the Plumbers and electricians until the joinery is complete Allow each trade area to complete their work in allotted times Work out which trade area needs to be out of the area first, second then third to allow the job to progress