Does any one have good system in place to deal with this? - Contractor Talk - Professional Construction and Remodeling Forum

J3 Construction · 09-01-2008, 11:51 PM

I have been working on one of my largest projects ever and I thought I had all the contract details worked out. My customer and I have had a great relationship and nothing has gone wrong, however They are taking a very long time to decide materials and we are running about two months behind schedule. I am in many ways losing money because of trying to keep moving even if its out of order witch means more time to do something simple or just time over run I am cutting into my profit if I am working on the project two months for free and Its not by my planning, because he is on target for money I am not having lots of change orders that equal money and markup.
I am just losing time and they seam to be ok with the pace. Its killing me and I don't have an idea yet on how to deal with this now or in the future. If anyone has crossed this road and has some advice it would be much appreciated.

Thank you for your time,
Jerry

finehomes · 09-02-2008, 12:03 AM

I don't know how you could apply this to remodeling......I only do new construction....but here goes...this was the first thing that popped in my head. I do a job schedule on all my new homes using Microsoft Project. I update it the first week of every month and go over it with the client when we are going over the monthly draw so they can see what is coming up and what decision they are going to need to be making and where we are at on the schedule....ahead or behind.

Communicaion man....thats the big thing. They gotta know that they are holding things up. You could make a flow chart of things that you need from them and when and what trigger them....ei....paint needs to be picked out when drywall is being done....etc. That's pretty easy for even the dumbest of homeowners to figure out!!!!

Sam

**genecarp** · 09-02-2008, 07:06 AM

Jerry, your in now, so it will be difficult to change things, or back charge without causing your customer to be unhappy. your solution is more work, other jobs. dont alter job continuity. go work another job, when something they are supplying is not ready, come back when it is convenient for you. no need to sit on that job and waste time and money.

**Double-A** · 09-02-2008, 07:17 AM

We go over 'homework' with the client when we start the job and create a schedule. These are the things the client must/should do to keep the job flowing, including selections.

We have a final date on the schedule showing when these selections are required to be made and when we expect on the job. If we're held up by this process, our contract shows that we will demobilize and mothball the project until such time as we're paid to remobilize and begin work where we left off. Client will pay for these efforts.

Remobilization requires adjusting the schedule to accommodate the same supervision and crews be returned to the project. This in itself can take a week or two to juggle.

Sit down with your client and explain your losses and what the next steps are if you do not get their product selections. For the future, put this information into your contract and hold your clients to it.

Remodel Bud · 09-02-2008, 07:29 AM

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monticellohomes · 09-02-2008, 08:00 AM

I do primarily new construction so on custom's I have a simple document I have them sign that gives a list of items they have a choose and by which stage they have to choose them....i.e. Flooring must all be finalized by the time drywall is loaded on the job. That gives me plenty of time to get material on site by the time it is needed and it states on this sheet that if choices are after that I am not responsible for delays. I haven't run into the situation with them taking too long but I like everyone above's idea of getting it in my contract. But in most the customs the loan is in their name so they are motivated because of the interest.

DavidC · 09-02-2008, 08:17 AM

"Owner Responsibilities:

Owner will make allowance items and color selection in a timely manner allowing for materials to be ordered in sufficient time to arrive before installation is scheduled. Any such delays caused by owner may result in additional charges and extends the completion schedule by twice the length of the delay."

This is a now standard clause in our proposal/contract. However, I agree with Gene that for this job it's too late to change your agreement with the customer. Try talking to them about the delays and how it is making it difficult for you to meet your obligations to your other clients.

Not a lot of real teeth in our clause, but so far it has motivated clients to move if they are adverse to extra charges. In addition to that, during the sales process we set it up so that we don't schedule a definite start until we have accumulated most of the product needed. We 'pencil' them into our schedule and push them down the line until we feel we have enough to start.

Good Luck
Dave

Vince_B · 09-04-2008, 07:55 AM

I think it's a communication issue. Our industry has one downside that others don't have and that is our customer can't really tell how busy we are.

When we get swamped with work, the customer doesn't see it like they would if they were at a restaurant that had a line out the door. I suppose many of my customers assume we are drinking coffee around the shop when we aren't on their jobsite.

I've had good luck giving the "schedule speech". We're going to be on a jobsite everyday and everyday is scheduled. If I we can't continue on your project because we're waiting on a decision from you, then we'll have to start another one. We would much rather finish here first. Could you make your color selection (or whatever) a priority?

Mike Finley · 09-04-2008, 09:39 AM

You've been given the answers to what to do in the future - add it to your contract.

For now since you have such a good working relationship, it's time to dip into that good will you have been building up with them by having a conversation about your circumstances, you'll be doing this with nothing to back you up other than their feelings of fair play, but I'm sure if approached correctly they will work with you. I think you will find them not only receptive but probably apologetic in that they had no idea of your problems.

Grumpy · 09-04-2008, 01:37 PM

I know home building is a little different than my line of work, but I typically won't even put a job on the schedule until I know exactly what materials we are installing. It drives my salesmen nuts who are trying to speed things along, but it drives me and my production department nuts not knowing what materials we are goign to install until the last day. Sometimes those materials are out of stock!

Therefore as best as possible I'd try to define a material schedule upfront, perhaps even as part of the design stage of the project. I mean afterall you've gotta plug in numbers might as well also plug in product descriptions and then a disclaimer stating that the above listed products will be used and assumed acceptable unless revisions are made before phase X of the project. Later on define the phasing, or time lines of how long they have to make revisions and alterations. I tend to complicate thigns, but for a reason, to eliminate problems like these.

You may also consider a delays due to customer cause clause where you state that if you have to stop work due to the customer's cause it will cost X per day or something.

Me personally I hate doing new construction because a normal shingle roof job can be done in 4-6 hours on new construction, but we usually end up visiting the job site 5 times for that little 4 hour job because someone down the line can never make up their mind.

DavidC · 09-04-2008, 02:17 PM

Lot of talk here about penalties to the customer for delays and such. And don't get me wrong, it's understandable. But I wonder if anyone takes any precautions to keep their contracts balanced.

According to my attorney, even a well written contract can be turned against you if a judge were to interpret it as being one sided. It does seem that if we start out with a well balanced contract and then edit to only add penalties for the customer we may be gradually turning it to being lopsided.

Any thoughts on that?

Good Luck
Dave

hatchet · 09-04-2008, 03:33 PM

Like some here I use a schedule that gets discussed monthly or more depending on stage of construction. I use P3 for scheduling and I tie selection activities to start of activities.. for instance (see attachment) tying the start of tile to delivery of tile. In the schedule the red items are critical path - or the longest path of activities. If one of those items is delayed it will push the end date of the project out.
You'll notice in the middle of the red activities on page 2 there is a yellow siding and trim. Essentially that's saying that we have positive float or a certain amount of time to complete that activity without effecting the end date, which logically makes sense. We could have the entire interior done before siding needs to be completed.
The first time the client misses a date it starts turning other activities red pretty quickly. So we sit down and compare the last schedule with this one and show them exactly what is happening.
Certainly this could backfire on us if we cause a delay - so it's somewhat of a double edged sword.

Remodel Bud · 09-04-2008, 08:37 PM

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J3 Construction · 09-07-2008, 10:38 PM

Thanks for all the info and feed back I totally understand its more of learning for the next job. I will add a homeowner delay clause, but I hate to have the h/O feel like I am nickel and dimming them I like to plan for great service and not hammer them on extras I just could not see this one coming. I use an online scheduling program that sends auto email reminders for decisions and deadlines. He just takes forever and I started another job to get cash flow up and help offset dead days but just a little frustrating.

Again thanks for all the info and feed back. This is my first post and it has been a great resource. I hope I can provide some info to give back sometime.

Big Sky General · 09-10-2008, 04:55 PM

All the talk about contract and legal is great but in the real world it won’t work if you want to keep a relationship with the owner. Furthermore you will spend additional time chasing the money. Reduce your field overhead on that project, and move on with another project

Remodel Bud · 09-10-2008, 07:36 PM

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orson · 09-10-2008, 08:49 PM

Quote:

Originally Posted by DavidC

Lot of talk here about penalties to the customer for delays and such. And don't get me wrong, it's understandable. But I wonder if anyone takes any precautions to keep their contracts balanced.

According to my attorney, even a well written contract can be turned against you if a judge were to interpret it as being one sided. It does seem that if we start out with a well balanced contract and then edit to only add penalties for the customer we may be gradually turning it to being lopsided.

Any thoughts on that?

Good Luck
Dave

David I think that is an excellent point. I usually go over my contract with the customer (unless the job is very small, under 10k). I would be squirming in my seat if the contract were one sided.