The Increased Government Burden on Our Projects
By: Robert High
May 7, 2012
When discussing the government, most people focus their frustrations on our president, Congress, or the Supreme Court. However, closer to home we’re finding an increased government burden in our industry that is quietly costing all of us an exorbitant amount of time and money.
Each municipality, county, school board and college in the state of Florida is responsible for overseeing development and construction within its jurisdiction. Oversight generally consists of plan review to ensure code compliance, issuing permits, inspections during construction, and issuance of a Certificate of Occupancy. There is a statewide building code as well as regulations that are followed by each group. However, the code serves as a minimum statutory requirement and can be customized and added to at their discretion. Some of these groups outsource the oversight of this building to private companies.
Over the decades we have become accustomed to dealing with varied requirements and idiosyncrasies of each municipality. However, since the recession started in 2008 we’ve found the burden of some of these groups to be excessive and overwhelming. Some examples include:
Strategies for Success = Strategies for Survival: Part 2
By: Bart Sontag
March 12, 2012
In my continuing look at the strategies some companies are (likely unwittingly) employing to survive these times, my blog post will focus on the misstep of one of our subcontractors.
Kill Quality
The traditional mentality among those in our industry is aligned with numbers, specifically LOW numbers: low bid, fastest duration, least amount of change orders, shortest punch list, etc. When times are tight, most contractors naturally look at how they can lower the numbers associated with running their businesses. The largest number they have to look at is overhead. Within overhead, the largest number is salaries/wages, and within that line item are the highly paid craftsmen who immediately get a target painted on their backs.
One Thing We Don’t Do Well
By: Robert High
February 23, 2012
The construction industry is commonly considered the most litigious industry in the nation. Contractual relationships are generally structured to “pit” designers, owners, and construction managers against each other in a misguided effort to create a checks and balances atmosphere. In today’s market environment, it’s common for new project Requests for Qualifications to ask contractors for the number of lawsuits they have had with clients in the last five years.
H. J. High has never been involved in litigation with a client. This is absolutely unheard of! Let me state that again. In our 76-year history, H. J. High has never been involved in a lawsuit with a client. And not because all our jobs go smoothly. Not because we don’t have disputes. Not because we’ve always been paid on time or we are always compensated fairly on added scope. Not because we haven’t had clients conduct themselves in unscrupulous ways.
Strategies for Success = Strategies for Survival
By: Bart Sontag
January 9, 2012
It has been interesting to witness the strategies some companies have employed to make sure they are left standing once we start to experience an economic recovery (we’re still going to have a recovery, aren’t we?). In the coming weeks my blog will focus on some of the ways we’ve seen companies choose to deviate from sound business practices in an effort to survive these times, and why I believe these strategies ultimately will not be successful.
Destroying a Solid Foundation
H. J. High had developed a very strong relationship with a local concrete and masonry subcontractor, due in large part to the exemplary service we received from the company over a three year period during “the good times”. As the market was turning and work was really starting to dry up, the subcontractor accepted a contract with us for a sizable concrete and masonry (block and brick) project. They knew they were tight on their bid margin and decided instead of self-performing the masonry portion of the contract as they had done on previous projects with us, they would sub the masonry work out to a lower tier contractor. The lower tier contractor did a horrendous job – the workmanship was often unacceptable, many times requiring the work to be removed and replaced, in some cases multiple times; the workers were accustomed to working on residential project sites, often showing up wearing shorts and tennis shoes only to be sent home; the schedule couldn’t be maintained, the mason was consistently missing his own deadlines. Instead of stepping in and taking over the work with their own forces, thereby shielding H. J. High from further problems, the contractor decided to continue on course. After a multitude of heated discussions and battles between H. J. High and the sub, work was finally complete…with the exception of the final masonry cleaning. Then that became the battle – and the sub finally called us and asked if we would just do it for him and not make him pay for it since they had such a great loss on the job. I couldn’t believe the subcontractor was willing to destroy three years’ of hard work in building a relationship by making H. J. High suffer through their series of poor decisions. You can bet once the economy turns and work picks up we will not consider working with any contractor who fails to protect us by forcing us to endure the results of their poor decisions.
Three Things a Construction Company can Learn from Steve Jobs
By: Robert High
November 3, 2011
The recent death of Steve Jobs has prompted a wave of articles, books, and television specials dedicated to his remarkable career. He was a creative genius widely considered one of the greatest visionaries and business leaders of our generation. Although many lessons can be learned by studying the practices of the CEO of the world’s most admired company, I was struck by three simple beliefs he had that easily translate to the commercial construction industry and H. J. High in particular.
The Power of “No”
When Steve Jobs returned to Apple in 1997, the tech company he founded in his garage two decades earlier was on the brink of failure and was said to be three months from being insolvent. While reviewing the company’s product line, he found Apple had been producing multiple versions of the same product to satisfy requests from retailers and customers. He asked his managers, “Which ones do I tell my friends to buy?” When he couldn’t get a simple answer he worked to reduce the number of products by 70 percent. Moving forward, Job’s strategy was to only produce four products. One year later, Apple computer turned a $309 million profit.
In construction, it’s easy for a company to try to be everything to everyone. A contractor once told me, “If you can draw it, we can build it!” However, deciding what not to do is as important as deciding what to do. Focusing on a few markets and products allows a construction company to build competency, become a leader in the market, and further differentiate from its rivals. H. J. High has strived to make this change in the past five years. Our focus on the commercial, educational, religious, and industrial industries has allowed us to build our expertise in those markets. We feel our clients are best served by dealing with a contractor who knows who he is and who he isn’t. You won’t see us building condominiums, water treatment plants or hotels. We’ve recognized the power of “no”.
The Non-Social Media
By: Bart Sontag
July 29, 2011
Some may consider it strangely ironic that on the heels of debuting our new website, which focuses on the social media aspect of the web, one of our first blogs would carry a title such as this.
We recently took subcontractor bids on a relatively large project. In today’s market you can just imagine the aggressive pricing and quantity of bids we received. For one particular trade, we received a bid from one of our long time subcontractors – one of our “good guys”. Like many firms, the economy had ravaged their company and they really needed the work. They were desperate for it. They were begging for it. They were pleading for it. They were communicating with us at every level of their firm in an effort to win the job. Although they were not the apparent low bidder at bid time, after close scrutiny of their scope we recognized they were not low due to scope overlap. We were able to work through the issues and ultimately awarded them the project – we certainly could have made a different decision but were empathetic to their circumstances and confident they would do the best job for us and our client. Fast forward several months and their work is now almost complete. The project did not go well – their subcontractor consistently missed the schedule, their materials were wrong, or late, or both. They submitted change order pricing incomplete, incorrect or late. They missed coordination meetings. The principals of the firm, the guys who were begging and pleading for the work months earlier, were persona non grata. Not once did they walk the project. Not once did they visit the site. Not once did they pick up the phone to see if H. J. High (their client) was satisfied or if they could improve their performance in any areas. Instead, their vice president sent me an email – via LinkedIn – to join his professional network.