Braglio.com

Today marks the five year anniversary of my current job.

Looking back over the past five years I can see just how much I have learned about running a business. How much I have learned about construction.

I’ve worked for both small and large companies, from a grocery store to a clothing store, from a public utility to here. I can safely say that while every day isn’t peaches and cream this is still the best job I’ve ever had.

The challenges of a job that changes daily along with a level of responsibility that requires self motivation are some of the best parts of this job. Believe me when I say it is never same shit different day. Sure, the paperwork is enough to choke a horse and you never feel like you’ve ever accomplished anything. When you are on top of your game no one notices because you’ve done your job. It’s when the house of cards comes tumbling down that everyone notices you.

A good friend and former co-worker told me one day that I was the goal keeper. I guess this is an appropriate comparison. I don’t score (make money for the company) but I sure can give up a goal (lose it). I’m often the last line of defense. I fill in out in the field when we are short handed. I scramble to find the extra part that everyone forgot about. I manage the day to day tedium so it keeps the wheels turning.

I have goals for myself. I wanted to have an operational website for us last year. I finally feel like I have enough know-how to get the job done. I just need to find the time to get the ideas out of my head and into cyber-space. I’m going to force myself to make it happen this year, within the next 4 months if I can.

All in all a good five years with many more to come.

It is rare to find a contractor that remains in business for ten years. Our company just passed the thirty year marker in November. When I started working here five years ago it seemed that the people that ran the business before us saved everything, every single scrap of paper that involved the business no matter how small. Every year I try to purge a portion of the mountains of paperwork that sits around me. At first it was an attempt to make enough room to keep the current projects within arms reach. Now I do it just to make space for the prior year’s project. While moving piles of paper, I’ve noticed a few trends that are disturbing.

The level of supporting paperwork is escalating at an alarming rate. When I look at a medium sized project for our company from just five years ago compared to a similar project today I see at least a 30% increase in paperwork in all aspects of the job. Five years ago a project was advertised on the first of the month, the pre-bid conference was on the 7th and the bid was due on the 30th. Thirty days from advertisement to bids due. This is enough time to contact all of the equipment suppliers, review the contract with lawyers, review the insurance requirements with our insurance agent, review the bonding requirements with our bonding agent, assemble the bid docs and finally submit the bid. A medium sized job would fit into one 11″X17″ manila file folder.

Today bidding the same job is compressed into just two weeks, three weeks max. Why do engineers and owners do this? I often think it is due to their desire to keep the contractor in the dark, bidding against a specification they are not 100% familiar with. The bid paperwork for a medium size job now fills an entire expandable file folder, at least five times the size of the same job five years ago.

Due to the nature of our business we will see similar projects pop up for different clients. The location of the job is the different but the job itself is identical. A project from 2000 would fill one ‘banker’s box’. Today, the exact same job spans three boxes. The sheer volume of letters between us and the engineer is amazing. I often think that at some point in the past year or two we switched from a construction company to a paperwork company.

Just five years ago the time span between the award of the contract to actual work taking place was approximately two months. After the contract is signed the owner, engineer and contractor will work their way through shop drawings; detailed cut sheets showing exact specifications regarding the equipment that will be supplied. A medium size project will have roughly 20-30 shop drawings to be reviewed. Five years ago shop drawings would take a week for the supplier to produce them, a week for the contractor to review them, and a week for the engineer to review and mail them back.

We are currently still waiting for shop drawings we requested from a supplier in August. The engineer is asking us almost daily if we have received them. We call the supplier daily asking for updates. God only knows when we will receive the drawings let alone how long it will take for them to fabricate and ship the material. A medium size project now takes a minimum of 4 months to kick off. Four months of meetings, phone calls and emails before a wrench gets turned. Our lead times are getting ridiculous.

Of course the engineers don’t care. they want the job done by the completion date. Never mind the 4 weeks it took them to get the shop drawings approved. Forget that they forced you to change suppliers after the bid. Forget everything they do to slow down progress. Just get it done before the liquidated damages (penalties that are not allowed to be called penalties) kick in.

No matter how I look at it, I don’t see this trend reversing itself any time soon.

A little over a week ago I described the process by which we obtain work here. I have less to do with the estimating and more to do with the compliance aspect of bidding so that is where I focused my attention. I hope to get more involved in the estimating process and when I do I will write about it. I can assure you that it is easily as complicated as my current portion of the process.

As I left off, our company is now the ‘Apparent Low Bidder’ for said project. All of the suppliers are calling like crazy, making sure that their proposal is the one we will go with. Now we wait. Wait for the Owner and Engineer to complete several steps. These usually occur at ‘Authority Meetings’ that happen just once a month. This can result in a project not actually beginning in the contractual sense for thirty to sixty days after the bid due date. Once they do meet, the bids which were reviewed by their legal counsel are presented for award. The Authority then issues an ‘Intent to Award’ soon followed by ‘Notice of Award’. What follows is a mound of paperwork that must be completed and returned in short order. Most contracts required that the Contractor execute and return the documents within 10 days or forfeit the contract. Not only are the contracts to be signed, sealed and notarized. Many contracts also require bonds. Bonding is additional insurance. Payment bonds insure that if the Contractor fails to pay his suppliers/subs/employees they will get paid by the bonding company. Performance bonds insure that should the Contractor fail to complete the work, the bonding company will pay for another Contractor to come out and finish the job. Insurance certificates are also required. These certificates detail which insurance coverage’s the Contractor carries as well as what levels they carry. Many Owners and Engineers require their Contractors to list them as ‘Additional Insured’. This means that the Contractors insurance policy will cover them if they are sued due to the actions of the Contractor. There is a real world application of ‘Additional Insured’ that home owners can use it to their advantage.

Say you have a contractor come out to remove some tall trees from your property. If the contractor cut down a tree and it falls on a neighbor’s house you can use the contractors insurance to help cover you from loss if they listed you as an ‘Additional Insured’. Of course, asking to be listed as an Additional Insured will make most small time contractors look at you funny. Most likely they will give you such a high price you won’t use them.

After the contract documents are completed and mailed you can sit back and wait. Despite the rush of completing the contracts within ten days to meet the Owners deadline you still will wait. After another month, and another meeting, you will receive executed contract documents.

Just one more step until work begins; the submittal process. I’ll cover that in my next work related post.

I’ve been asked this question several times in the past month. It’s going to take two or three posts to cover it. Here is post number one:

Work has been extra hectic as of late with several projects in the early stages as well as several in the pipe for bidding. Roughly three months go by from when a bid is submitted before any real work happens on site. We are in the process of taking off three projects right now. Every step of each bid is a journey in and of itself.

We subscribe to a mailing service that gathers all of the bid notices in our area in one place. After finding some work that falls into our area, we contact the person in charge of distributing the plan documents. While this pricess varies from owner to owner and engineer to engineer one thing is for certain, they want to get paid. Plans and specifications can cost as little as $20.00 and as high as $250.00. Non-refundable of course. Some will FedEx documents as soon as they receive a call from you. Others won’t mail them to you until they have the check in their hands. Some require the check be made out to the owner and mailed to the engineer. Others expect you to pay the engineer and mail to the engineer. You get the idea? Right from the start you must pay close attention to detail. You won’t forget this as it is a recurring theme.

After receiving the plans and specifications, a review is made of the bid documents. Multiple copies are made of insurance requirements, bonding requirements; portions of the specs for subcontractors will be copied as well. A huge amount of faxing occurs now. The bid package is examined and completed. Particular attention must be paid to the submission instructions. Some owners require multiple copies of bid packages. Others require the ENTIRE plans and specifications be returned. Some owners want work in progress and past work history reports. Others want résumé’s of critical people and detailed listings of equipment on hand to complete the work as well as detailed descriptions of the physical property the company owns. Worst of all, some require the submission of a detailed financial statement. After reviewing all of this, the package is assembled, the insurance agent is consulted to be sure that our current coverage is adequate and our bid bond application is submitted to our bonding agent.

A bid bond is an insurance policy that guarantees the owner that our company will perform the work for the amount we submit on our bid form. If our company is the low bidder more bonding and insurance comes in to play. I’ll cover that in the following post.

While we are working on getting the physical bid package together, we are also ‘taking off’ (estimating) the job. Larger projects will have a pre-bid meeting with the engineer, owner and all contractors planning on bidding the project. This is the best time to raise questions and get clarifications on a project. Engineers are a shifty bunch and hate answering questions clearly and concisely. Hedging is the name of their game and a pre-bid meeting is the best place to get a firm answer. After the pre-bid you will have a difficult time even contacting and engineer let alone getting them to answer a question. Apparently it is common practice for an engineer to disappear in the 2-3 days prior to a job going to bid. Why would they want to be around if a contractor has an important question?

After the pre-bid, the estimator gets down to work and does the take off. Estimators come in two styles, the nuts and bolt style and the weight of the spec style. Nuts and bolts guys go through every single page of specification and read every note on every drawing. When they have completed a take off they could do the job blindfolded (think of Fonzie putting his motorcycle back together blind – that’s a nuts & bolts estimator). Once an estimator of this type has completed his job I would argue that he has a better understanding of the job than the engineer. The reason for this is simple; an engineering house will typically use several engineers to ‘build’ a job, this ends up with one guy knowing 40% of the job, another 40% and the last coming in with 20% of the project. The nuts and bolts estimator knows 100% of the job. You can tell when there are multiple nuts & bolts guys bidding against each other, the results are close. I’ve seen bid results on $600,000.00 jobs that are $1200.00 apart. That is tight bidding.

On the other hand you have the ‘weight of the spec’ estimator. Simply put, they hold the spec, feel how heavy it is, and make their estimation right then and there. Now I am exaggerating a little bit – but not much. That same $600,000.00 job can end up with a weight of the spec bid of $500,000.00 or $950,000.00 you never know where they will fall out. This of course earns these people the title of ‘dangerous’.

Once the pricing has been gathered, the labor estimated, the profit overhead and insurance added on top, the bid form is completed. Once completed (and double checked) it is slid into an opaque envelope and driven to the designated submission point. Most bids are read aloud publicly right after the submission deadline. I can’t think of many things that will get your blood pumping faster than sitting in a room, surrounded by the competition, waiting for the numbers to be read out loud.

So now you are the low bidder. What’s next? Read tomorrow, I’m out of steam.

Than having a 2:00PM pre-bid meeting that is over an hour and a half away on a good traffic day canceled 15 minutes before you would walk out the door.

The area is a virtual Bermuda Triangle of heavy traffic on a nice sunshiny day. With the heavy rains from former hurricane Ivan heading this way I would have been very lucky to get home by 6:00PM tonight. Now I can head home quickly and begin what should be an interesting weekend.

On Saturday all three boys will begin swimming lessons at the local YMCA. The two younger men will require assistance from my wife and I. The oldest is set to go in on his own. After our experiences at the beach I think they will do well. I didn’t learn to swim until I was in 3rd or 4th grade. It’s a skill I hope they acquire sooner.

Saturday night I hope to get in some gaming. In World of Warcraft I’ve put my main character on hold while the person I’ve been grouping with consistently recovers from Ivan. I last saw him online Tuesday when he warned me that he would not be online for a while. When I asked why he told me he lived in Mobil Alabama and was expecting to lose power and ride out the storm heading his way. He had no idea how long he’d be without power so I started another character, a priest. He’s already level 8 and I think I can move him to 11 at least this weekend.

Sunday I hope to get in some more painting on our first floor. I have some outside trim that is in need of painting but with the rain recently moving through I’d rather wait until it’s a little drier for that task.

My posting frequency has decreased over the past month. It’s not that I’m short of ideas, I’m just short of time. I hope to get back on track starting next week with some pictures from our vacation. In the meantime I will try to get a post about my current reading material up.

Well we made it back.

While today has turned out to be better work load wise than I had thought I’m still too busy to post anything of real significance here.

Wednesday at the latest I will return to my regular 3-4 posts a week.

Work is hard enough when I have to do just my job. This week had two people scheduled off for vacation. One was an outside guy and the other was the main cog of this business.

Between the normal things I need to get done in my 50-60 hour week I had to cram in many of the things my partner does. Add to that the fact that I don’t do his job nearly as well as he does – plus the rains of the past week – plus losing another outside guy for two days due to a back injury (not work related) – plus my work for the week.

I’m tired. Very tired.

Today I hope to verify that I handled all of the things that were assigned to me for the week. I had grand dreams of having an easy day yesterday and today. Get organized. Work on a side project for the company. Archive some older work.

Not a chance.

I can’t wait to sleep in this weekend.