A pause in construction

Most of the time, the construction of an architect-designed project proceeds according to plan. Construction unfolds on time. The construction documentation is clear and free of ambiguity. The trades perform their work skilfully and conscientiously. There are few surprises, be they physical or financial. The builder, owner and architect maintain a positive working relationship.

Sometimes though, construction does not proceed according to plan. Through negligence, disagreement or accident, a project is derailed. The derailment might last a moment in time, soon forgotten, or it might endure the entire project, poisoning both the process and relationships.

We have experienced and survived a number of derailments. They are stressful, sometimes expensive and always fractious. They test the good intentions of everyone involved.

What follows is the 5th of eight disaster lessons from site. We ask what went wrong and review what we’ve changed in our practices to prevent it from happening again. An archive of the series can be accessed here.

5. A pause in construction

pause in construction

What happened

The opening trades of construction proceeded rapidly, on or even a touch ahead of schedule. Excavation, the concrete floor slab, framing and roof cladding were all finished within two months. But towards the end of this period, we made a late change a key trade. This would mean an unavoidable pause in progress while the relevant fabrication took place.

What happened next

The builder found other work to fill the gap, getting started on a second project. He was transparent with us, though really what else could we expect? It was perfectly reasonable that a four week lull would need to be filled so he could keep his staff busy.

What we hadn’t expected though was that the new project would take over the builder’s attention as his primary focus. While the quality of his work on ours never suffered, from that point onwards progress became sporadic at best. During the finishing trades, the project barely limped along.

Why we think it happened

The pause was enough to permanently disrupt the broader organisational focus of the builder. Managing the flow of work on site is an intense and continuous exercise that demands a builder’s full attention, attention he no longer had to give. He was now required to balance the competing demands of two sites, located at opposite ends of Melbourne, both in terms of anticipatory scheduling and on-site staffing. It was a task that proved too much for him: excuses began to creep in and milestones were repeatedly postponed.

Perhaps central to this was the cause for the disruption, that is, a change we and the client introduced. Our change was not something the builder had anticipated, and he was forced to cope with it on the fly. Though it was not discussed from that point onwards, it’s possible the delay became something like an excuse for him. He could let another week slip because, after all, it wasn’t his fault he had to get started on a second job.

The lesson we learnt

A builder is a small business operator. He has staff and overheads, both of which need to be paid every month. As mentioned previously, he also has to manage large volumes of cashflow to earn his income. He needs to stay busy or he’ll sink.

A significant delay, no matter what causes it, will mean a builder has to take himself and his staff elsewhere to fill the gap. The lesson we learnt was to ensure all our critical decisions are made with enough time for the builder to proceed with his works on schedule. We may not be able to control every external delaying influence on a project, but the least we can do is remove ourselves as one of them.


Image source

  1. A pause in construction, author’s own image.

Irregular site meetings

Most of the time, the construction of an architect-designed project proceeds according to plan. Construction unfolds on time. The construction documentation is clear and free of ambiguity. The trades perform their work skilfully and conscientiously. There are few surprises, be they physical or financial. The builder, owner and architect maintain a positive working relationship.

Sometimes though, construction does not proceed according to plan. Through negligence, disagreement or accident, a project is derailed. The derailment might last a moment in time, soon forgotten, or it might endure the entire project, poisoning both the process and relationships.

We have experienced and survived a number of derailments. They are stressful, sometimes expensive and always fractious. They test the good intentions of everyone involved.

What follows is the 4th of eight disaster lessons from site. We ask what went wrong and review what we’ve changed in our practices to prevent it from happening again. An archive of the series can be accessed here.

4. Irregular site meetings

site meetings

What happened

The project was located an hour and a half’s drive south of Melbourne. The builder’s construction schedule required that he be on site on irregular days, making regular site meetings difficult to coordinate. Consequently, site meetings were never arranged, with most questions addressed either via phone or the occasional meeting in Melbourne.

What happened next

Talking through construction details on the phone was far from ideal, particularly in terms of maintaining clear paper trails for decisions, but it was manageable. If this had been the only hardship, the real issues created via the lack of site meetings likely would never have been revealed.

However, while the project proceeded well during the early stages of construction, progress slowed substantially during the finishing trades. This was not specifically related to the absence of site meetings, but without regular, face-to-face opportunities for communication, the lack of movement on site grew increasingly frustrating for the clients.[1] The relationship between the clients and builder thus became tense and, caught in the middle, this tension began to affect us also.

As the final weeks of the project stretched out across months, the lack of personal contact became exponentially problematic. We found ourselves acting as mediators between clients and builder. We relayed messages back and forth constantly and had the same futile conversations over and over again, all while absorbing the dismay of our clients as if by osmosis.

Why we think it happened

The builder’s request to avoid site meetings, and our readiness to agree, came from our shared misapprehension that they would inconvenience the construction process rather than facilitate it. Indeed, reflecting on other projects, and our sense that builders sometimes itch to end our meetings and get back to the “real” work, it’s likely this belief is not isolated.

The lesson we learnt

For this project, the rural location of the site combined with the builder’s sporadic presence there were enough for us to let site meetings slip off the radar. In hindsight, the driving time required to get to and from site would have been more than compensated for by the benefit of having regular opportunities for clients, builder and architect to meet in person.

The lesson we learnt therefore is to insist on site meetings, every two weeks at least, throughout the entire duration of the construction process. We would add that this should be the case even if progress is for some reason retarded or delayed: the builder is driving progress, but it is only through the combined efforts of builder and architect that he can navigate also.


Footnote

  1. The clients continued to live on site during construction, which exacerbated their frustration. Having the client so close to the building process is another disaster waiting to happen, though is unfortunately outside our control.

Image source

  1. Irregular site meetings, author’s own image.

An unsubstantiated provisional sum

Most of the time, the construction of an architect-designed project proceeds according to plan. Construction unfolds on time. The construction documentation is clear and free of ambiguity. The trades perform their work skilfully and conscientiously. There are few surprises, be they physical or financial. The builder, owner and architect maintain a positive working relationship.

Sometimes though, construction does not proceed according to plan. Through negligence, disagreement or accident, a project is derailed. The derailment might last a moment in time, soon forgotten, or it might endure the entire project, poisoning both the process and relationships.

We have experienced and survived a number of derailments. They are stressful, sometimes expensive and always fractious. They test the good intentions of everyone involved.

What follows is the 3rd of eight disaster lessons from site. We ask what went wrong and review what we’ve changed in our practices to prevent it from happening again. An archive of the series can be accessed here.

3. An unsubstantiated provisional sum

provisional sum

What happened

As the name suggests, a provisional sum is a nominal allowance within most fixed price building contracts that relates to a portion of a project that is not yet known. Typical examples of such sums might be a supply rate for bathroom tiles still to be selected, or an item of joinery not yet documented. We try to keep provisional sums to a minimum, as they represent an unnecessary financial risk to our clients.

In this instance, the builder requested a portion of the works be removed from the fixed component of the contract and relegated to a provisional sum. The works involved new pool fencing to an existing pool. The fence had already been thoroughly documented, but the builder was struggling to lock down a price, and both he and our clients were keen for him to start on site as soon as possible. The builder provided an estimate for the fence – around $12,000 – and we accepted his request.

What happened next

The builder started on site. Some months later, he submitted a fixed quote for the pool fence based on a simplified version of the originally submitted documentation. We were shocked to discover that despite this simplification his quote was more than double his original estimate.

Our analysis of the builder’s quote proved our design to be economical, and his fixed quote to in fact be fair and reasonable. It was his estimate that was flawed and, unfortunately, the nature of provisional sums made his error our client’s problem. They were ultimately put in a position where they had to spend $15,000 over their expectations to build their fence.

Why we think it happened

The builder was not sufficiently diligent when preparing his estimate for the pool fence, we think in large part because he had no need to be. He had already more or less won the tender, and the estimate was intended for a provisional sum, with no requirement for him to honour it. His calculations for the materials and labour required for the fence were both seriously undercooked, errors he was able to later rectify.

The lesson we learnt

It is rare for a provisional sum to be prepared by a builder, but in the event one is, the lesson we learnt is it should always be cross-checked for accuracy. This can be done by analysis of the breakdown of the sum, or even better, by comparison against other builders’ or a quantity surveyor’s estimates.


Image source

  1. An unsubstantiated provisional sum, author’s own image.

Progress payments by stage

Most of the time, the construction of an architect-designed project proceeds according to plan. Construction unfolds on time. The construction documentation is clear and free of ambiguity. The trades perform their work skilfully and conscientiously. There are few surprises, be they physical or financial. The builder, owner and architect maintain a positive working relationship.

Sometimes though, construction does not proceed according to plan. Through negligence, disagreement or accident, a project is derailed. The derailment might last a moment in time, soon forgotten, or it might endure the entire project, poisoning both the process and relationships.

We have experienced and survived a number of derailments. They are stressful, sometimes expensive and always fractious. They test the good intentions of everyone involved.

What follows is the 2nd of eight disaster lessons from site. We ask what went wrong and review what we’ve changed in our practices to prevent it from happening again. An archive of the series can be accessed here.

2. Progress payments by stage

progress payments

What happened

It is typical for a builder to claim payments for his work on a monthly basis, where the sum claimed corresponds to the value of the work undertaken in the past month. The builder instead requested that payments be made by stage. This involves regulated percentages that can be claimed at the completion of stipulated stages of construction:

Base stage – 10%
Framing stage – 15%
Lock-up stage – 35%
Fixing stage – 20%
Completion – 20%

Staged payments are larger but less regular than monthly payments. We recognised that this request likely related to the builder’s aversion to paperwork, but were unable to see any problem with it, so accepted his request.

What happened next

After the first few months of construction had passed, it became clear that the staged payments were a problem for the builder. They were simply spread too far apart. He might not have liked the paperwork involved with monthly payments, but the stop-start cashflow really hurt him.

This had two important effects:

First, he began to disappear from site for weeks at a time. Though the builder refused to provide explanations for his absences, we suspected he was taking on smaller commissions with fast turnarounds to keep the money flowing. These periods of non-activity on site stacked alarmingly, stretching what was supposed to be a nine month construction period out to 18 months.

Second, in order to reduce the money he would owe subcontractors, he began to take on specialist trades like concreting, plastering, plumbing and hydronic heating himself. He had to redo many of these, as his workmanship was not up to an acceptable standard. He also made errors that were impossible to rectify, things like bootprints in finished concrete surfaces and hydronic heating lines emerging crookedly from concrete slabs.

Why we think it happened

Though the builder never came clean with us or our client, we had no doubt that he was struggling financially. If the project had proceeded according to schedule, he would have received his staged payments once every two months or so. As the schedule stretched further and further, there were times when four or five months passed without payment. The poor cashflow created a vicious cycle that stretched the project timeline and impeded cashflow further.

The builder was not capable of extricating himself from this cycle. He had dug his own hole and everything he did, in terms of both his poor scheduling and inattention to quality, only served to make the hole deeper.

The lesson we learnt

This experience was powerful proof of the importance of cashflow on site. Consider: on a $500,000 project, the builder’s profit margin is around 15%. In other words, he pays and receives $425,000 in order to earn just $75,000. He also has to pay suppliers and subcontractors before our client pays him, the gap between which might be as much as two months. He must therefore keep the money coming in or the cycle will disintegrate.

The lesson we learnt was simple: we no longer accept project payments by stage. Even if the builder is paperwork-shy, and we must produce additional paperwork to compensate, we insist on monthly payments.


Image source

  1. Progress payments by stage, author’s own image.