De-Selecting a Sub

Posted by David A. Markham - 27/10/09 at 08:10:42 am

I once attended a forum sponsored by CSI (Construction Specification Institute) where one of the topics was Contractor/Subcontractor relations. There were several executives of large General Contractors in attendance. When prompted on the subject, one of the panel members, Jim Balboni, an executive with Otis Elevator, stood up on his chair and shouted, “Why in the hell do contractors continually use subcontractors that fail them!” In the best humor there is always some truth.

The General Contractor/Subcontractor relationship is, for better or worse, a telltale of

project health or for that matter Contractor Health. A great subcontractor makes the job of the General less time-consuming and allows him more time to plan and budget and thus makes the General look good. A poor subcontractor bogs all facets relating to his portion of the project down and can make the project and the GC look like a disaster.

In order to truly represent the interests of the client, the subcontractor list must constantly evolve. Great subcontracting companies come and go. So by simultaneously trimming the potential subs-list and adding to it constantly, you are adding extreme value to your relationships with clients. Pricing will be competitive and current. Technique and communication will be modern. Trust will be there.

That is not to say that all subcontractors must go. We have several that we have worked with for more than 20 years and continually stand the reasonableness test.

Disengaging from a subcontractor prior to contracting for a project:

As with any relationship, until we have experienced a project together, we really do not know each other. A subcontractor who violates the basics needs to be let go before they start for

Improper insurance

Disagreement with our Indemnity language in our subcontract agreement

Expired License

Poor or non-existent References

No office presence where phone calls, (e)mail and faxes are received, messages taken and phone calls, (e)mail and faxes returned.

A misunderstanding of the management necessary for the very high caliber building process

If a subcontractor fails in any of these or you get the gut feeling that you’ll be let down, pass early and often. Experienced generals know the feeling.

Eliminating a subcontractor from the proposal list:

Now that we have experienced a project together, besides pricing, what makes us know the subcontractor should not be considered for the next team effort:

Poor product installation

Offers no consultation in trade

Improperly handles client/GC relationship

Improperly handles architect/GC relationship

Continuously late, inaccurate billings on improper form

Does not understands the key rule that additional or extra work will not be paid for unless approved prior to work being completed

Maintains a slovenly jobsite environment

There is some give and take with this list. A subcontracting field with a small number of competent competitors might warrant a little leeway on a few of the above items. There might be some give and take for a rock-star that does very fine work. However, if a few of the above are tied together, even the best subcontractor is expendable.

The bottom line is that the GC needs to pull off the project on time and within budget and make the experience for the client worth reliving. If a subcontractor doing his part to contribute to that smile on the Clients face, perhaps their place on the subs-list should be reconsidered.

Marketing and the Anonymous Client

Posted by David A. Markham - 15/10/09 at 04:10:47 am


How then does a contractor who builds in this extremely high-end market spread the word?

Referrals in this business are an absolute key. Nothing replaces the personal recommendation from one friend or family member to another. In order to warrant the recommendation, the firm must execute at every step of the process to turn out not only a fantastic building, but a happy client whose expectations have been managed every step of the way.  I recommend this as a method to finding a contractor to friends and associates seeking my advice. Ask a happy customer who their contractor was and what made the experience rewarding. The element most crucial to the builder here is to execute flawlessly.

One method, because of the visual necessity to marketing in this industry segment, is to get an agreement with the client to exchange a high quality photo shoot upon completion for requests by our firm for future walkthroughs with prospective clients. Prospective clients invariably ask to see a project that has been recently completed. Explaining the policy of photos in exchange for walkthroughs is usually met with an agreeing nod that they too would probably like to avoid the imposition when their job is done.

Many of our referrals come from the design community. It is not unusual for the building owner to depend on their architect to suggest names of contractors for consideration. Further, the architect’s opinion could play a large role in the decision making process.

Because of this natural tendency, it is vitally important to create and keep a buzz about the firm active amongst the list of architectural and design firms that create buildings the firm actively seeks to build.

Public relations can go a long way to spreading the word on the expertise of the firm.  In this market where most home-owners are publicity-shy about their personal lives however, PR can be tricky. Stories must be about the firm itself and the good works it performs while keeping names, addresses and even some specific traits of buildings out of the piece. When a willing client who wants to show off your work and associate themselves with the project comes along, by all means use the opportunity to gain some attention for the firm.  Using a public relations professional to perfect the message is a necessity.




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Green Building for Estate Builder starts In-House

Posted by David A. Markham - 09/10/09 at 02:10:58 pm

The green movement has two distinct implications for this estate home builder. Obviously, constructing buildings that are environmentally friendly, built from sustainable materials and comfortable to the user is the goal. However, employing green methods and systems in running a business that constructs these buildings is an important consideration as well. C.M. Peletz Co. has changed its ways over the years to become a more environmentally responsible company.

All of our project managers drive company-owned hybrid vehicles which has become our fleet of Toyota Prius. This absolutely makes sense as project managers generally do not carry large amounts of material but do visit jobsites constantly and are always on the go. Our field management personnel drive low-mpg company-owned small pickups. The money savings for fuel is well worth the change. Large material deliveries are left to vendors who generally make multiple stops. Employing fuel efficient vehicles also sends a message to the public that we care about the effect driving has on the environment. One of the largest personal and commercial energy consumers is transportation.

In terms of office working methods, we have a policy to print less and view more data on our computer systems from plans to contract documents. All materials disposed of from the office (mostly paper) are recycled. We even store food scraps (mostly coffee grounds) from our office kitchen in a sealed tote so the company president can transport to his home composting system.

We have recently remodeled our main office in order to create a more efficient work space while reducing our energy consumption. Highlights include changing lighting to LED from drop-in fluorescent, raising ceiling heights for cooler summer room temperatures, upgrading ducting for more efficient air delivery and increasing insulation sections to retain heat and cool air. In constructing the office remodel, all demolished materials were taken to certified recyclers. All wood materials for doors and trim have been acquired from reclaimed lumber stock. Paint is all low VOC. Plumbing fittings are all low-flow and appliances are energy efficient.

In addition to our office, we are in the process of adding a solar generation/shade structure to our building thereby reducing our dependence on the local utility and allowing shaded parking spaces for building tenants. This endeavor includes financial benefits from the state and federal governments that make it impossible to ignore.

We encourage and enable our clients to employ as many green systems and materials as possible to reduce the effect their new estate homes will have on the environment. At the same time, C.M. Peletz Co. “walks the walk” when it comes to the operation of the business that builds those environmentally green buildings.

David A. Markham 2009 ©