What do contractors do, and what do they avoid doing, to stay on schedule and within budget—and thus at the top of their favorite GCs’ lists? We received a tremendous amount of input, great advice and tips from AWCI contractor members, which we have distilled here to share with you.
Part 1: Keeping a Project on Schedule
First of all, let’s look at the do’s and don’ts of keeping a project on schedule.
Larry Burnes, owner of WB Interiors LLC in Florida, says, “First and most important is to make sure the GC has a schedule we agree to at contract signing. That triggers our team and we go to work. Materials are the main delay currently, both ours and items provided by the GC. We place advance material orders with tentative delivery dates. Our admin team makes four follow-up calls on the materials to ensure punctual delivery.”
He adds, “Gently guiding the GC is a skill to master. We want them to know our goal is to have a successful and profitable job. We do not panic buy. We preorder materials with a fixed price through a delivery date. If the job slips, we send the additional charges forward. We do not over-promise on manpower, nor do we do out-of-sequence work without charging additional costs.”
“Planning, communication and prefabrication all work in tandem,” says Chris Taylor, president of Nevell Group, Inc. in California. “Some projects have well-defined schedules before we start working, others do not. Either way, we build our own schedules and share those with our customers, hoping they will build our logic and durations into their master CPM schedule. We practice lean construction methods and perform three-week look-ahead scheduling to stay nimble and ready. We prefabricate components when and where it makes sense to do so for the benefit of the on-site schedule.”
“We avoid reactive scheduling,” he continues. “Circumstances change daily and hourly on our job sites, but we stick to our plan as much as possible. Jumping to a new area of the project or doing work out of sequence absolutely destroys production. Rework also kills all the trades, so proactive QA/QC programs to ensure we don’t have to revisit an area go a long way toward keeping on schedule.”
Dustin Wilshire, CEO of Reitter Stucco in Ohio, says, “Early involvement is critical. Our superintendents attend site meetings as early as possible to discuss mobilization needs. We are very honest with our durations and clearly exclude premium wages so we can be paid extra to incentivize our team to work longer hours if needed. We have switched to a 4/10 work week on several jobs. Having the flexibility to schedule around a rainy day without losing hours has helped maintain schedules.”
“We are honest about our available resources and maintain good relationships with our best customers by focusing our resources on their projects,” adds Wilshire. “Taking on projects for customers that already seem desperate or totally cost-focused has stretched us thin in the past, and our margins and payment durations have suffered. We have to admit that we can’t do everything for anyone.”
Craig Kaminski, sales manager at Marek in Texas, explains that “having a solid, complete set of submittals that are clear and easily understandable by our GC partners speeds up the process of approvals through the architect-review stage. The jobs we perform are becoming more and more difficult in relation to the specialty products we are supplying and installing. Timely approval for items allows us to begin our own procurement, shop drawings, samples and mockups with these products. Internally, another major step to staying on schedule is supplying our field operations a complete setup (road map) to building the job.”
“We strive to avoid being forced to cut corners just to satisfy a task,” he continues. “Taking a day or two extra at the submittal stage could save us weeks or even months on procuring material. The same can be said for the internal information we give our
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field operations. If we hurry and cut corners with the information we pass on to the field, it can lead to confusion and delays in starting the job.”
“We require a clear and reasonable schedule that is reviewed and approved by all parties prior to starting the job,” says Bill McKibban, vice president of AIMM Inc. in New Jersey. “Verbal changes or approvals are a big no-no,” he cautions. “Everything must be in writing.”
Victor Roach, president of Western Partitions Inc. in Wilsonville, Ore., says, “We work hard to stay on schedule, but often it is the other trades that are holding things up, or waiting for design responses from the architect. We provide regular written communications on all hold-ups by others. Even if the contractor is paying us to work overtime, we try to avoid it. It often leads to lower production and to safety issues, especially with extended overtime.”
Stan Kasper, president of The Rockwell Group in Illinois and Wisconsin, says, “In most cases, the schedule is controlled by the general contractor. However, to help the situation, we mobilize as soon as we know we are being awarded the project. We bring our foreman and field personnel up to speed before they even arrive at the project.”
“If there is no schedule, we provide one with our detailed pre-construction delivery and installation breakouts,” explains Gabriel Castillo, director of business development at Pillar Construction, Inc. in Virginia. “We notify clients of payment requirements to secure engineering and raw materials. Submittals need to be approved as early as possible so fabrication can commence as soon as we have the green light. Have an updated plan of action with delivery schedules, site staging requirements and storage areas. Avoid having unresolved RFIs before submittals (or at any time) or unclear payment schedules where payments are condition precedent to moving forward or starting fabrication.”
Roger Olson, president/treasurer/CEO of Sig Olson & Sons Plastering, Inc. in Minnesota, says, “Once we are notified of a successful bid, we begin immediately with planning and submittals. It is like flipping a switch when that notification comes. We are ever mindful of our workload and try not to bid anything that would put us in a position of not being able to furnish sufficient manpower for a given project. Of course, that doesn’t always work so we also try to be in a position to pay overtime if needed in order to accommodate a particularly busy schedule.”
“You must be proactive to protect yourself and your company,” advises Shawn Burnum, vice president of operations at Performance Contracting, Inc. in Kansas. “Align with other subcontractors on site and work together as much as possible. This is by far the best way to ensure success. Over-communicate your concerns, impacts and issues early and often. Make sure all of these are documented. There are some great tools to assist in this like Plan Grid. Use photos and time stamps. Offer assistance and solutions to problems. We just have to document those conversations properly and limit our liability or exposure.”
On what not to do, Burnum advises, “Avoid falling into a trap of believing that you are harming a client by being honest and frank about a situation. You don’t have to be confrontational in your notices; however, they need to understand the impact something has on your company. Understand that working overtime is an easy call for clients, but it comes with some indirect costs to you and your team. They lose efficiency. They get fatigued, and safety can become an issue. Productions suffers overall. Avoid allowing the contractor to ‘trade stack’ you on the site.”
Pat Arrington, principal of Commercial Enterprises in New Mexico says, “The sequence of subcontractors is what drives projects. We like to inform the GCs two days after we begin wall framing to start the electrical contractor. They will never catch our framers. Do not start framing until door frames are set. Push the GC to order the frames as soon as the steel is ordered. Layout of wall framing, door locations, window openings, blocking and backing locations will prevent going back to reframe areas. We purchased $250,000 of studs for future use, which allows us to start work without waiting for material to be shipped.”
Bill Fritz, president of Mission Interiors Contracting, LLC in Texas, stresses the need for “constant communication with clients, suppliers and our labor force regarding accelerations and delays.” He adds, “Avoid projects that have specialty long lead-time items or that are overly complex with multiple stages. Some subcontractor on the project will drop the ball and create delays that all of the other contractors pay for in added time and scheduling. We are not doing business in the same world as pre-COVID. Constant rising costs, long lead-times, labor costs and shortages make it difficult to make a profit on a complex intricate project, so keep it simple.”
Says Mike Mazzone, president of Statewide General Contracting & Construction Inc. (SGCC) in Hawaii, “Communication with the general contractor and my field staff is key,” adding, “Ordering material and making sure it is delivered on time prevents production slows and stops.”
Rick Wagner, owner of Richard Wagner Enterprises LLC in North Carolina, concurs: “Communicate with the GC, PM and site super. Insist on picture updates! Believe it or not, job supers will lie just to get you there. Avoid wasted trips to the job with crews loaded and ready to work.”
Adam Barbee, senior estimator/project manager at Daley’s Drywall in California, says, “The key is prior proper planning along with pre-construction. If scheduling is not organized correctly, deadlines, schedule and ultimately your budget will pay dearly for the mistakes.”
Part 2: Keeping a Project Within Budget
There is a direct relationship between budget and schedule, so there is some overlap here. Again, we asked our AWCI contractor members what they do and what they avoid in their striving to keep a project within budget.
“Avoid out-of-sequence work,” says Burnes. “Our proposals state that work is for one mobilization per trade of work. If windows are late and we have to remobilize, we charge for the extra time. Our crews are given expectations of production daily. Our foremen know all the budgets and have access to all items, from contracts to labor and materials used. We give them full control of the job.”
“Do not fall in the trap of over-promise and under-deliver,” he continues. “If they are ready, we have to perform. We make sure all materials have quotes, all equipment is used or returned, and all delays are documented. Man appropriately and don’t leave loose ends or punch items. Complete the job while there before moving to the next one.”
“Since the COVID-19 outbreak, I have two more admins in our office,” Burnes says. “One of them does all change-order work. The second is responsible only for materials needed. These positions cost well over $95K combined yearly but save us time and capture about 35% more in costs that we were losing. A well-trained machine needs oil and new parts. You have to adjust with the times.”
Taylor emphasizes “pre-planning and accurate and timely cost-projections. Each activity is planned by the crew with an expectation of performance for that day. Their performance is measured daily against those goals, and if they are not meeting them, adjustments are made. We do a thorough job-cost projection on every cost code line item at least once per month on every project. This allows us to see the areas that aren’t meeting our budget and make adjustments and course corrections to put us back on track. Avoid out-of-sequence work and rework as much as possible.”
Smith says, “Communication between the job foreman and the PM is crucial. For example, our PMs walk the bigger jobs once or twice a week to update progress. We try not to ‘over-percent’ jobs by simply eye-balling progress. We understand that it’s very difficult to finish the last 10% of a job in a productive manner. Therefore, we adjust our percent of completes to reflect this.”
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“Labor is by far our biggest variable cost, so being careful not to over-man projects is critical,” says Wilshire. “Starting a project with less manpower and as early as possible helps manage our labor costs. Having the detailed or technical steps already taken care of by more experienced mechanics allows for better managed production rates when we do add manpower to the project. This approach has the downside that it’s more difficult for our less experienced employees to get technical exposure and training.”
Kaminski points out, “Budgets are historically made or busted in the field. However, there are things we can do from the project management side of the operation. Before any information is disseminated to our field group, we thoroughly review the project to root out any errors or omissions that may have occurred during the bidding process. If something was missed at that stage, it won’t be possible to ‘make budget’ in the field. Spending a little time up front can save thousands of budget dollars down the road. Confirming that we have the right material in the right quantities is critical to keeping jobs on budget. Job sites are fast-moving and always changing. The foreman and carpenters can’t afford to stop progress due to missed orders or incorrect materials arriving on site.”
As far as what to avoid, Kaminski says, “We stay away from the overtime requests we seem to receive on all jobs. Although some overtime may be required, we would prefer to handle it at our expense as opposed to being pressured by the GC to work those extra hours by promising to pay for a pre-determined amount of overtime. The pre-determined amount of time is usually extended or even becomes the norm. Then production goes down, budgets slip and the goal that was to be achieved through overtime is never met. We prefer to hit a job hard, get ahead, and dictate the schedule on our terms. We will often throw in a weekend or two at the beginning of the job to help achieve that goal.”
“We track hours used on the project for our benchmarks,” explains McKibban. “We have so many hours allowed for unloading, so many for staging, so many for installation. Hours are easy to track and these functions are unique, so the foreman and PM can monitor them daily. This keeps us on schedule and on budget. Do not do anything extra without prior approval. We document everything that occurs out of the ordinary, from late deliveries to down elevators.”
“Regular production tracking is a key component,” says Roach. “You can’t fix what you don’t measure.” And like many others, he recommends avoiding “overtime and jumping around on a project. Don’t go into areas until they are ready.”
Kasper says, “A budget basically consists of two elements: labor and material. We have struggled with our vendors as not all of them have been holding the prices that they had quoted, claiming that manufacturers just raise their prices and they have no choice but to pass them on. The labor element is the one that we have the most control over. Giving the foreman time to understand the bid documents and come up with a plan to execute it is where we believe we have the best chance for success.”
Castillo recommends procuring materials as early as possible. “Reserve a fabrication slot in time so delays do not cause up-charges,” he says. “Include allowances and indexation to raw material cost in the quote. Do not send out a budget or quote without an expiration date and clear payment conditions. Do not commit to a specification that does not allow for options based on equivalent performance. Do not commit to unattainable durations.”
Olson says, “We are doing more and more with lift equipment instead of more labor-intensive scaffold-building. For many of our projects, a smaller crew is adequate and lift equipment works great. We also try to purchase materials in whole-job quantities to save the shipping costs and take advantage of quantity discounts. Most of our projects are small- to medium-size exterior insulation and finish systems and sprayed fireproofing projects. They require that things get done in a certain order, and we make sure we don’t bury anyone and are on site when needed.”
“Much of our budget support is upfront, when a project is still in design and price consideration,” says Burnum. “We offer design assist to help select cost-effective building materials and alternatives to eliminate overbuilt designs, unnecessary equipment or scaffolding, or to save time in the schedule. Architects often know the look they are trying to achieve but are not always aware of more cost-effective products or building solutions. We expect a GC to make some commitment back to us for our services and additional effort. Being paid for pre-construction support is, unfortunately, the exception rather than the rule. We make it very clear in our proposals that we are simply offering design suggestions, and it is the responsibility of the licensed architect and engineer to assume any liability.”
Arrington advises, “Confirm the material cost is covered by the material quote. If a project is delayed, ask material suppliers if they can extend the quote. Purchase expensive material, place on site and request payment for stored material. ‘He who fails to plan, plans to fail.’ I believe Genghis Khan is credited with this statement. Avoid waiting on material. Have a plan to start early so as not to get covered up by other trades. In the submittal process, ask for materials that are readily available. Substitute more expensive materials that can be installed faster than the specified items, particularly if you are paying high wages.”
“Make sure the terms of your contract coincide with your materials-price protection dates,” advises Fritz. “No exceptions. Estimate your labor on a current projected basis, not on last quarter’s costs. Keep rising overhead costs up-to-date quarterly. Do not give away any change or deletion on a project—both cost and should be charged accordingly. Do not over-schedule labor on a project without compensation in order to make up time lost by another contractor. Do not forget to cost factor any rental equipment, supervision and overhead on a project into a change if the project has been delayed by others.”
Mazzone points out that “there is no faster way to go over budget than to have a GC dictate how many people you need on a project to keep the schedule. We manage the number of tradesmen on the project. If we need to increase production at no fault of ours, we make sure we are paid to increase manpower. Don’t allow the GC to bypass you and your office by giving directions to your people on the job. I make sure my supervisors and workers are taking directions only from our office.”
Wagner says, “We constantly monitor daily production with our foremen. Provide target man-hours and milestones,” he advises. “There’s a fine balance between accommodating what the GC wants or needs and your available manpower. It truly is like a symphony, and we trust that the one conducting represents our best interests. But be willing to speak up if bad management or other subs’ failures start to cost you money.”
Barbee says, “Having a meeting with the team prior to project start to review budget and scope is crucial. This helps everyone have a clear picture of the scope and expected and agreed-upon productions. Clear communication with all throughout the job enables us to tackle any obstacles head-on and efficiently. The most important aspect of a budget is ‘go time.’ If you can’t produce efficiently, there goes your budget, down the drain. We hone in on this to stop, prevent, reschedule, etc., and so maintain the integrity of our budget. We stay on track and do not veer off any of our guiding principles as outlined earlier. Guidelines for a budget are the compass that keep us on our budgetary path.”
As can be seen from these responses, keeping a project on schedule and within budget requires firm policies, careful planning, communication, firmness and ingenuity. We hope that the accumulated advice in this article will help you with scheduling and budgetary success.
David C Phillips, a freelance writer and photographer, is an original founding partner at Words & Images.
