How to avoid Danger in Building and Construction Projects
“The prudent see danger and take refuge, but the simple keep going and pay the penalty.” — Proverbs 22:3
The aphorism holds with building and construction.
- How it works in building and construction
What is the danger in building and construction?
The danger is if you commit yourself to projects which will cost you time and money.
Ideally your goal in building in construction should be this: to (i) produce accurate drawings quickly, or if you are a builder/trade to: (ii) build quality structures and get out as soon as you can.
Why are delayed projects costly?
You do not want a construction site that is delayed by 6 months. Think about it: crane hire: $15,000+ per week. What about site crew? That’s $25 / hour (very, very conservative. More like $100 / hour). How many staff will be working there? What about charge backs? What about the engineers and architects who will put RFI queries to the back of the line in order to focus on jobs that will bring them immediate revenue? Delayed projects straps all interested parties of liquidity, especially the builder, who will try to delay payments to suppliers. And if suppliers/contractors don’t have the liquidity to ride things out they could go belly up, further adding to the monumental costs involved. It’s a vicious cycle. The moment people get wind of a possible insolvency then they’ll pull out of it to focus on jobs that will bring them revenue. In short, delays are damn expensive. And you need to avoid badly managed and designed projects like the plague.
- How do I know whether a project will be a cock-up?
- First and foremost: Look at the capital position of a builder
If the builder cannot stand up when times get a little tough, then their strength is small. Builders need to have a strong capital base and liquidity in order to tide them through projects. As a rule of thumb: you can trust the big names: Lend Lease, Watpac, Leighton– because they have the ability to raise capital from markets if things go bad – but even then, you need to have a good look at their financial statements. You cannot trust the big four auditors. Read that again: only a fool would trust in the audited statements of the big four. You don’t need to be a financial analyst, but you do want to see a healthy cash balance, and the ability of these firms to service any impending debts.
- Second: track record
Make sure the builder has been around for a while. If she’s been around for 10 years she must be doing something right.
- Third: Price and availability
Good builders know their value and won’t work on the cheap. Consequently, they’re hard to hire because they’re always working. If you see a builder who is cheap and available, you need to very carefully investigate her or her quality.
- Fourth: The Designers need to be good
Bad drawings are the bane of this industry, nay bad architects are the bane of building and construction. I see it all too often, and very rarely do I see an architect worth his salt.
If the designs are bad – I mean really bad, then you want to steer clear from that project. Why? Because builders with funds hire the best architects. Builders without funds hire architects who are inexperienced, which means architects which could drag everyone under. This means, as mentioned above: (i) endless changes, (ii) endless RFIs, and (iii) issues getting paid.
Things to watch out for:
Now you can apply the following general aphorisms when accessing the quality of the drawings you see:
General Aphorism applied
Cockroach theory
- If you see one, then there will be a hundred hidden behind the scenes somewhere.
Small mistakes, big mistakes
- If they can’t walk, then they definitely can’t run. This means if you see some elementary mistakes, then you cannot trust them to get the more complicated things right.
What one should specifically watch out for in Construction Drawings:
Bad design:
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- I sometimes see the most absurd looking panels. What mind, smoking what substance, would concoct such a creature worthy of standing beside David in Florence? If you see one ridiculous looking panel, this is a sure-fire indicator that the architect knows absolutely nothing about what she’s doing. That means it’s gonna be a long and costly project. Stay clear of these things and let your competitors fall into them, while you focus your energies on projects that will generate a timely and handsome return.
- Missing panels.
- Misnumbered panels.
- Panel details that are not workable.
- Too many missing dimensions – another early warning indicator that the architect is careless, or rushed, or lacks resources.
- Missing gridlines. These architects ought to be round up and summarily executed.
- Dimensions made not to gridlines.
- Unnecessary complications in panel design. This is a sure red flag. It just increases the risk that something will cock up.
- Architects who make hundreds of revisions. Watch out: this means that people keep finding mistakes, or the architect is making changes continually. And that will bring more errors and more revisions. This means you gotta download 50 new drawings every day from Aconex. And you have to supersede all your old drawings? What if you miss one? This is a dangerous accident just waiting to happen.
- Too many misnumbered section views. This means that the architect has made a lot of changes. And when there are changes, it’s not a good sign: it means that there are problems hidden in the drawing, it means that they’re drawings are not easily readable, and will cost you money.
Architects who do not release their CAD files. These architects are costly. And as a rule of thumb you do not want to hire these architects. Because if there is a single missing dimension you have to call them to find out.
- Architects that take too long to respond: This means that they’ve taken other projects on, and are focusing on what will pay them money rather than attending to their work. They are too busy to actually be doing work.
- Architects that have their own agenda: they are not interested in delivering a quality structure, or a structure that is a commercial success to the client, as much as building a work of art which they can display to their friends/family and put into their portfolio. They are artists and have fabulous visions of grandiose structures without (much) regard for returns. At the end of the day, if you’re a builder, you goal should be to make money. Making cool buildings can be a part of that vision, but it certainly should not come at the expense of the bottom line.
My friends, if you take in just half of what I have written here, then you can surely avoid yourself from entering into strife. But you ignore my advice, then you will fall headlong straight into it!
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