Search Results for: money

Inventory Tracking: A Money Saver

Executive Summary: Construction companies have inventories that should be managed to improve efficiency and, in turn, improve the bottom line. Consider a mobile solution or at least one that gets away from the clipboard. How it was. My parents ran a small and successful construction company which provided well for […]

Best Way to Save Money is to Not Spend It

Executive Summary: When in a changed condition situation, the best way to minimize loss or to survive, depending on the case, is not to spend less, it’s to not spend at all. Take advantage of situations where you can spend zero. We’re going down. We’ve all been in a situation […]

The Leonard Curves: Another Tool in Labor Loss Quantification

Executive Summary Charles Leonard performed a study which resulted in the Leonard Curves. These curves may be a helpful tool to quantify your labor productivity loss due to cumulative impacts on your project. The Deeper Dive Revay and Associates Limited out of Canada wrote a great comparison article between the […]

K.I.S.S. – Keep It Simple Stupid

Executive Summary There’s power in simplicity. Harness the power to more efficiently communicate in-house and with your clients. What’s in a Task? Each day we all show up to work and have to accomplish a task. There are usually two main components of a task: the speed at which it […]

Incidental: What’s in a Word?

Executive Summary The word “incidental” is common to the construction industry and it can be damning if you’re not careful. Understand what you’re committing to when you enter that unit price in the bid proposal when it requires “all incidental costs be included”. What is this word, incidental? Incidental, included, […]

Delay Types – Top 4 List

Executive Summary Contractors experience all sorts of delays. This article covers what, arguably, may be the four most common types: inexcusable, excusable, compensable, and concurrent. Where do I Start with a Delay Analysis? Projects can be delayed for multiple reasons and the first question that must be asked to assign […]

Starting a Construction Business: a 5-Minute “How To”

Executive Summary Starting a construction business has its unique requirements. These plus the norms will get you up and running at your new construction business. Step 1. Do You Know What You’re Doing? This is the first question to ask yourself as you are getting ready to enter, as my […]

Pre-Bid Questioning to the Owner or Yourself

Executive Summary Many challenges in a project can be flushed out in the pre-bid phase with clear and concise questioning to the Owner. Consider these questions as a part of your bidding procedure. The Bidding Procedure The procedure’s quite simple: there’s an advertisement phase, an estimating phase, and then the […]

Financial Protection for the General Contractor & Owner: Two Ways

Executive Summary When making regular payments throughout the lifespan of a construction project, there are two main ways a general contractor or owner can achieve a significant level of financial protection: the joint check and/or the lien release. The Payment Process Most construction projects pay on a monthly basis. Payments […]

Setting the Bid Unit Price: 2 Main Reasons for Unbalancing

Executive Summary Setting of bid prices on a unit price bid can have significant effects on the financial performance of a project. Set your unit prices in your proposals to have positive impact. Be strategic. Balanced Bid PricesA balanced bid price is when each of the bid items shares equally […]

Day Labeling: Insult Your Client with Simplicity

Executive Summary Construction contracts are almost always measured in some sort of day: a working day or a calendar day. In analysis and project communication, kill the doubt for the reader and always define the type of day in every use of the word “day”. What’s a Work Day? A […]

Shhh, You’re being Recorded – and Two Other Tips

Executive Summary Just three random important things for contractors that didn’t make up an article all on their own: the legality of audio recording, running one man short, the golden rule of bid forms. What’s this article about? It’s about being a smart contractor in the easiest of ways. Learn […]

Quantifying the Loss in Labor Productivity: the MCAA Factors

Executive Summary There are very few “court-accepted” ways a contractor can quantify his or her loss as a result of labor productivity, or lack thereof. MCAA’s (Mechanical Contractors Association of America, Inc.) document PD 2 Factors Affecting Labor Productivity is one of the most widely used methods in practice. See […]

Cash v. Accrual Accounting – Whatchu Talkin’ About Willis?

Executive Summary There are basic differences between cash and accrual accounting.  Here’s a quick review. What is Accounting? Sounds simple, right?  It’s just keeping track of money in a business. And money only does one of two things – it either goes in the bank account, or out of the […]

How to do a Job Cost Projection: Cutting through the Fog – Part 2

You can find Part 1 here. Let’s run through an example. Let’s do an example so you see some of the challenges. Let’s take one cost code in your budget – let’s look at roadway subgrade. Below we have the budget for this cost. You can see the cost code […]

How to do a Job Cost Projection: Cutting through the Fog – Part 1

Executive summary. An accurate job cost projection is vital to Company survival. And it’s not too complicated if you know the budget, the timing of your costs, and can do a little bit of estimating. It’s NOT about blindly relying on quantities completed! What’s a projection? It also carries different […]

The #1 Driver of a Construction Claim

Executive Summary A construction claim is a dispute in the Work as it was contemplated in the original construction documents. However, a large percentage of what drives a claim is not the Contract. It’s the people. It’s personalities. The Spark Losing money. That’s what drives contractors to spar with an […]

Bond Premium and the Project Time Extension

Executive summary. Most traditional bond rates have two variables in their cost: the contract value and the time threshold. Do not forget to include both in time extension negotiations. What’s in a bond rate? The bond rate from your surety agent comes in two parts: (1) the cost as a […]

Dear Owner, No Change Orders Thank You

Executive summary. Most Project Owners are convinced that Contractors thrive on change orders. The truth is that most would prefer to have none. Read below a sort of open letter to Owners. Speed. I feel the need, the need for speed [QR]. Mr. Owner, when I signed this contract, I […]

Letters to the Owner Need to Tell, Not Ask

Executive summary. Most contractors use letters to communicate significant events in a project. Use letters to tell. Use RFIs to ask. Letters for when and for what. Generally speaking, during a construction project, letters are used by contractors to owners at significant or milestone-type events. Common reasons for letters include: […]

Legal Word of the Day: Contemporaneous

Executive Summary In a construction matter, the quality of evidence can be as important as the evidence itself. Using contemporaneous information can be invaluable in your legal matter against an opposing party. What is this word, contemporaneous? In layman’s terms it means recording information as it happens. A note recorded […]

Introduction to Contractor Estimating

Executive Summary.  The reader is introduced to the process of contractor estimating from initial project evaluation through the call for bond, the takeoff, the actual estimating of a civil project, an even the turn in of the bid. Bid Evaluation and call for bond.  Contractors consider many facets of a […]

Designers Design, Constructors Construct: Drawings Constructability Review

Executive Summary. A constructability review can significantly and positively impact a project. But what is it and what are the third-party reviewers looking for in their review? Here we look just at the drawings/plan review (not the specification and contract review). What is it? A constructability review is a third […]

Needed Software for a Contractor

Executive Summary. What are the “necessities” for software and apps for your construction business? Here’s a look at what’s out there – software and/or apps that are in use by successful firms to accomplish necessary functions in your business. What do I need? If you’re doing more than a million […]

If Cash is King, Time’s the Queen

Executive Summary. Time for any business is critical, perhaps more so in construction than many other industries. The role of time and its effect on a contractor are discussed here. Cash is king. Most construction companies have seen times when cash has been tight. If you can’t manage cash, it’s a […]

Time, an Owner’s Achille’s Heel

Executive Summary. Discussed here, by a contractor, is arguably the #1 area of recommended improvement for infrastructure owners with fiduciary responsibility. The area in need of improvement: response time to construction issues. Where does time cost an owner money? The number one place time costs an owner money is in response time. […]

Embedding Cost Control Culture into the Project Cycle

By Scott Jennings, P.E. This article was originally published in CFMA’s Building Profits April 2019 Sometimes financial situations can cause a contractor to fail. But these mishaps can likely be avoided.  Forecasting and managing the timely implementation and execution of cost controls can considerably impact effective bidding. In fact, cost […]

The Basics of Advanced Scheduling Terminology

Executive Summary. It’s important as a contractor, or even as an owner’s representative, to know a bit more than the basics of scheduling.  Familiarity of some of the terms is helpful regardless of what side of the table you’re on:  Contractor or Owner.  The terms.  When a project starts to […]

What is Section Modulus, S?

Executive Summary:  One of the most basic properties of a beam is its section modulus. How does the section modulus, S, come into play in structural design?  And, why should I care? What is a beam?  Keeping it simple here, a beam is a horizontal member supported at two ends.  When you stand in the […]

Forecasting with Confidence

Forecasting feeds the lifeline of the financial health of a company,” he says. “If owners and CEOs want to prevent profit fade during construction projects, they must equip project managers with sophisticated software tools that allow the managers to project costs accurately.

Avoid Claims with a Pre-Bid Analysis

In a best case scenario, a construction claim will make the contractor financially whole again on the matter. In a worst case scenario, the contractor goes out of business. Most claims conclude somewhere in between with all parties unhappy.

Cost Codes: What, Why & How

Executive Summary:  Many construction companies run their operations with too little specificity; costs ought to be reviewed on an activity-by-activity basis.  Learn what, why and how to set up a good cost code structure.   The bid and execution.  Let’s use an example, say, Concrete Curb & Gutter.  Suppose this was a proposal item for our […]

About Us

    Doug Idedi@sjcivil.comCV Doug is a seasoned construction professional with nearly 40 years of experience with a variety of projects including cogeneration plants, power generation plants, water and wastewater treatment plants, pump stations, and manufacturing facilities. His career began as a field engineer and exceptional performance led to promotions […]

Spearin and Modified Total Cost Method Adopted in Missouri

One of contractors’ most reliable defenses, the Spearin Doctrine, has been upheld in a Missouri Court. Certainly, for Missourians, this is a good thing, and to the extent, others may be able to reference this case or use a similar approach in claims, is a win for the construction industry.

Training: Now I see the Value

The benefits of training can be great for numerous reasons. You’re making capitalinvestments, you should also treat your employeesas an asset worthy of investment too.

Choosing a Construction Consultant

Once the decision is made to engage a consultant, choosing the firm to assist you can be one of the biggest challenges. Consider asking key questions to flush out the quality and value of the service.

Construction Claims Hierarchy

Construction claims are an unfortunate part of the construction process in today’s world. When you have a claim, know the order of hierarchy in your presentation of the data for maximum remuneration from the client.

Some Basic Analysis Techniques in Claim Preparation

Executive Summary: A claim is made because a contractor has lost money and/or time on a project. The method is chosen by the contractor to substantiate these costs can vary. Some popular methods of calculating cost are presented. What and why do I have a claim? In a perfect world, and […]

Balance Sheet – Knowing the Basics of Liabilities

Executive Summary: The balance sheet says a great deal about a company. If you’re a business owner you better know how to read your own, as well as that of your clients and subcontractors. This week we discuss the Liabilities section. Just the basics. My recent article introduced the balance […]

Importance of Timely Notification

I have not done the official research on what are the most common causes of success or failure in a construction claim, but I would bet that the quality of notification to your client is a leading indicator of success – or failure. I can tell you this with certainty: […]

Being a small construction business owner: tough, tough, tough

So, you want to start a construction business? Install tile, frame houses, lay pipe, move dirt, paint ceilings, wire fixtures, sweat pipe, hang drywall, tie rebar – one of these, right? Well, that’s the easy part. So is making money, right? After all, the economy’s healthy and we’re out of […]

Spearin Doctrine – a Landmark Construction Law Case

Have you ever had a project you were building according to plans and specifications and it just couldn’t be built the way they drew it up? George B. Spearin did in Brooklyn, New York.  He sued the federal government in 1918 and won – click here to see it in […]

Custom Programming

Construction businesses are dynamic and creating features that are personalized to a business’ unique needs are necessary to maintain a competitive edge in the marketplace. The SJCC’s programming and development team specializes in custom programming that delivers exclusive functionality and cost-efficient performance to each distinct project we construct. From custom […]

Equipment – Buy, Rent, RTO, RPO, Lease – Which One???

Construction equipment is a necessary tool to perform many types of construction work. How to acquire the equipment has a significant effect on the financial aspect of a company. There are many options which should be considered when temporarily or permanently acquiring a piece of gear.

Cost versus Price

Executive Summary: Cost and price are two different measures of money in a construction bid. Knowing the difference is fundamental and can improve profit. What is cost? Cost is the expense associated with an activity or item. It is just cost. It has nothing to do with price. In construction […]

A Quickie on DEF

Executive Summary: The U.S. Environmental Protection Agency implemented a rule on May 11, 2004 [QR1] which rocked the construction industry. It has made DEF (Diesel Exhaust Fluid) a household name. What is DEF?  What is DEF? DEF is an acronym which stands for Diesel Exhaust Fluid. It’s a liquid. It’s […]

Plans Constructability Review: Why, When, and What?

Executive Summary: A constructability review of a plan set can greatly benefit the project. On the surface, it looks like it benefits primarily the Owner, but the benefits to the design team and contractor can also be significant. All project parties should encourage this service on their projects. I’m only […]

Credit Unions versus Banks

Executive Summary: A credit union is a viable option for many small businesses. Consider the advantages of a credit union over a traditional bank. What is a credit union? It’s “big bank lite”. It’s a bank with checking accounts and savings accounts, with mobile banking services, with internet access, tellers, […]

Standardized Contracts and ConsensusDocs: a Win-Win

Download PDF Executive Summary: Standardized contracts provide tremendous benefit to the construction industry – they benefit the owner and the contractor. ConsensusDocs is the leading standardized contracts provider utilizing plain speak and fair risk allocation. Consider using them on your next project. [QR1]  What’s out there now. We’d all agree that […]

Temperature Effects on Productivity

Download PDF Executive Summary: Effects of weather on labor productivity can be difficult to quantify. Consider efficiency factors generated by the National Electrical Contractor’s Association and presented by Adrian & Adrian in Total Productivity and Quality Management for Construction. This is also discussed in many other publications. Why and when […]

Unbalancing a Bid and Cash Flow

Executive Summary Cash flow is vital to a contractor’s survival.  Taking advantage of setting unit prices in a bid, and also knowing cash strangle points is imperative for business owners and project managers. Here’s a Video The first ten minutes of this video (presented by this article’s author) is a […]

Users of Your Financials: What They’re Looking At

Download PPT Download PDF Executive Summary: Some parties may require their own review of your financial reports before doing business with you. The two documents of interest to these parties are the income statement and the balance sheet. The major items they’re looking at are briefly discussed here and a […]

Divisional Separation: Pure Crap

Executive Summary: Companies lose money and affect reputation by divisive behavior between divisions. Work to make this better by improving morale, efficiency, and the bottom line. How it goes. You’re a member of a successful construction company. You work in the heavy/civil division building treatment plants. The boys and girls […]

I See Claims…

Download PDF Executive Summary: Construction is a litigious business. Often times the signs were right in front of you from day one. Pay attention and look for the behaviors of the parties that often indicate inevitable dispute and possibly a claim at the end of the job. See 20/20 today. […]

Proposal Terms and Conditions

  Listen Read PDF Executive Summary: Submitting a clear and concise proposal is an important step in getting the project off on the right foot. An ambiguous proposal welcomes dispute. Be complete in the listing of terms and conditions in your proposals. What are terms and conditions? Terms and conditions […]

Construction Contract Review Basics

Executive Summary:  Each day we hand contracts down to our subs or we are signing contracts down from Owners or General Contractors.  Know some of the basics of what to look for here. What is and when will I ever use a Contract?  A contract is a laying out of […]

Dead is the Handshake

Executive Summary The “Steel Team” composed of fabricator and erector joined together to sue the owner and general contractor for failure to pay on changes. The “right” parties appeared to win, but they paid dearly. The Project and Players The project was the Ascent at Roebling’s Bridge – a 21-floor, […]

Why is the Accounting Department Telling Me How to Estimate?

Executive Summary: Estimators know the construction work while the accountants know the financials. These two parties must work in harmony to benefit the company and their own livelihoods. This article recognizes the needs of both parties. The dilemma and end goal. Most firms beyond the “Mom and Pop” stage, have […]

Top 5 Uh-Oh Signs of a Client

Executive Summary: If you do not have a relationship with a client, or you are moving to a different management team within a familiar client, there can be some telltale warning signs. Listen to your client for some of the items listed below and beware. #5 The taped meeting. I […]

Top 5 Countdown: Things to Look for in Vendor Quotes

Executive Summary Each quote on bid day, whether from a subcontractor or a supplier, needs to be thoroughly reviewed before incorporating into the bid. Here’s a Top 5 countdown! #5 Math Errors Often times subs or suppliers will quote a certain quantity of an item and then a unit price. […]

Getting Paid: Some Suggestions

Executive Summary The law* provides the rules of getting paid in construction. Sometimes contractors must use the law, other times there are other easier (less expensive and quicker) ways of getting paid. *I’m not a lawyer, so please make sure to consult with your attorney on any of your legal […]

Owners Need to Stop Expecting Filet Mignon on a Hamburger Budget

Executive Summary: An August 19th, 2017 cover page headline in The Economist magazine reads Construction: the least efficient industry. Their general position on our industry’s efficiency I didn’t think was far off, but the blame was misplaced. Owners need to help turn this industry. For their own sake, not just […]

Make Claim Preparedness the Standard, not the Exception

Executive Summary: More and more construction jobs year after year go to litigation – or at least go “legal” as I say, by requiring the services of a lawyer. Don’t make preparing for a claim a monstrous duty towards the end of the job, prepare as you go with good […]

Cut Out the Office Cancer for Better Office Health

Executive Summary A lot of offices have that one person or that one small clique that creates a negative atmosphere in the office. You and your office will be better off with this cancer removed. Cut it out. Bad Attitude This person or persons I’m referring to may exist in […]

Invoice Your Clients Clearly and by the Rules to get Paid Quickly

Executive Summary Invoices get paid untimely for numerous reasons. The reason for slow payment should never be because of you – the party billing. Keep billing simple and in accordance with the payer’s guidelines to get paid quicker. What is an invoice? An invoice is a document generated by you […]

What’s a Banking Covenant?

Executive Summary: What are banking covenants? Banking covenants are conditions put upon a borrower by the bank. Although they can be general in nature, they often are quantitative. Some typical covenants are listed here. What sort of loan? In the construction industry, there’s all sorts of loans: line of credit, […]

The Power of Habit

Executive Summary: Although policies can be created overnight, getting them to function and last in your organization takes time. Read here about the value of persistence. Change is tough. We’re in the construction business and many of you reading this are doing it as a professional in America. Change for […]

Including the Portion of Corporate Overhead in a Bid

Executive Summary:  Determining how to account for the portion of corporate overhead to be included in a bid is a calculation that every company makes a bit differently.  Learn the definition of corporate overhead and how it is included in a bid. What is corporate overhead? Corporate overhead is the cost […]

Choosing a Professional Services Provider

Executive Summary: There are many factors in determining who should provide your firm professional services. Read on to find that it’s more than just their technical ability. General: As a contractor, you need the following professional services on a regular basis: Legal Banking Accounting Insurance Engineering Some construction companies may […]

Balance Sheet – Knowing the Basics of Assets

Executive Summary: Knowing the basics of accounting is essential in business. Knowing the balance sheet will help you assess your own financial health as well as that of your clients or subcontractors. Here are some basics on the balance sheet and, specifically, the assets section. Just the basics. I entered as […]

Estimate Handoff – Estimators to Field Team

Executive Summary It’s great that your estimators just landed a new project, but your competitive advantage can be lost without a synchronized handoff to the field team. Make sure to have a formal meeting between the estimating and project management teams before the project starts. Estimator knows best. There is […]

Bid Unbalancing – How It’s Done To Increase Profit

Executive Summary Contractors unbalance unit prices in their bids to take advantage of anticipated quantity overruns and underruns. An intelligent unbalancing of the unit prices can result in higher profits. Of course, that’s the contractors’ goal. Review the example provided to see how it’s done. The Bid Proposal Let’s look […]

Owner Involvement, Careful What You Wish For

Executive Summary:  Owner involvement in the way of project management and furnishing material is done for one primary reason:  to save money for the owner.  It doesn’t always happen.  The owner’s decisions in these regards can cost the contractor money.  Or the taxpayer. The owner as a project manager.  I […]

A Contractor’s Cash Flow: Acknowledgement and Improvement

Executive Summary:  Managing cash flow is imperative and it never hurts to see these challenges on paper.  This article reminds you as the owner, the chief financial officer, or as a member of the project management team of the challenge of staying cash positive. Cash is king.  If you’ve had […]

Profit Fade – Avoiding It

Executive Summary: Reduce profit fade at the end of your projects by adjusting building habits and getting the right people in place to finish your jobs strong. Several suggestions from years of experience are provided here. What is profit fade? So often a good job goes bad, but just at […]

Why track extra costs… and how?

Executive Summary: Whether you use a functional cost coding system to track the cost of your original scope or not, it is imperative that you accurately account for costs outside of your base scope. Learn why, and how, to account for these extra costs outside of your original scope. Why […]

Incentive Clauses: Do they Work?

Executive Summary: Engineers have wondered if incentive clauses are a benefit to Owners in producing a timely, or accelerated, contract completion. My experience has been that it is of great benefit to the Owner because of the aggressive nature of project completion by the Contractor. What is an incentive clause? There […]

Safety: Communication, Communication, Communication

Executive Summary: To be successful in heavy/civil construction, it is imperative to have a rudimentary understanding of engineering concepts. However, more often than not the primary reason for a project failure is the human factor versus gross misunderstanding or misapplication of an engineering principle. One of my personal experiences was in a crane failure, […]

No good deed goes unpunished

Proverb #1: No good deed goes unpunished. I’ve got a couple of these proverbs up my sleeve when it comes to construction. This one I normally share with the newbies to the biz, but I find that those that have been around awhile benefit from it too. Where’s this applicable? I usually […]

Giving Workers a Voice Makes Jobsites Safer

Executive Summary As a project site safety manager, if all you had to do was “safety” all day, your job would be easy. But as a safety professional, much of your time is spent convincing project managers, superintendents and executive management of the value is spending money on safety to improve […]

Claim Preparation & Support

CONSTRUCTION CLAIMS SJ Construction Consulting, LLC (SJCC) represents both owners and contractors. We have been involved in many claims concerning matters of scope creep, design errors/omissions, extended performance, corporate office overhead, and production inefficiencies caused by overtime, acceleration, and cumulative impact. We assist in any way possible in the dispute resolution […]