Building Advantage News

Valuating Risk Management

February 24, 2020
By: Nathan Jurowski

    How do you valuate risk management? For the unwary owner who chooses to build without taking into account aspects such as technical expertise, safety programs or past performance, the absence of risk management can quickly be measured in terms of excessive change orders and fee increases, unexpected and unnecessary delays, or worse yet costly injuries. Here, disputes mount, projects freeze, and litigation ensues.

    This simple view doesn’t even consider the realities of modern construction. Large-scale projects are coming on board in our own backyard, requiring unprecedented collaboration and coordination amongst the construction team. Even small-scale enterprises are introducing new construction methods, requiring expertise in areas of new and unusual complexity. Advanced leases and business start dates are driving more aggressive schedules. Environmental and governmental compliance on all levels represent challenges in the pre-construction phases. Alternative project delivery methods and unknown project scope increase the probability of major design changes during construction.

    Every owner should have confidence that their contractor is qualified to meet the rigorous performance standards required by the scope of their individual project. Good contractors not only deliver on reputation and expertise, but also avoid unnecessary risks by investing in their people, establishing trusted relationships and relying on industry partners. The result is the very best value for owners through risk management by contractors.

    At the center of this value proposition are the hardworking men and women who have dedicated their lives to physically building our communities. Workers toil for years through apprenticeships before earning the right to be called journeypersons. Their years of training include hundreds of hours of classroom time, where they can acquire and hone new skills, making them more valuable and productive to their employers. For this dedication to their craft, union members and their families are rewarded with the security of an honest day’s pay and premium benefits. Union members continue to provide added value by refining their skills through annual upgrade training. Contractors and union leadership remain allies with the mutual goal of a highly skilled, productive and profitable workforce.

    Reputable contractors continually hit the mark through ongoing investment in their office staff and project leaders. Extensive leadership training and educational programing is offered either directly by the employer or through their affiliation with local trade associations. Over the past century, local commercial construction contractors have worked together to address common industry needs such as safety, technological advances, leadership development and training, workforce development and public policy. Contractors who have taken advantage of this investment enjoy greater growth opportunities in boom times and are able to better survive the lean years. The contractors who make this joint investment are fierce competitors, but nonetheless understand the value of industry advancement and their ability to provide the best product possible.

    This collaboration extends to industry stakeholders and resource groups, where the industry has made significant investments in tomorrow’s workforce and construction leaders. Starting with local schools, youth are receiving greater opportunities to learn about the building trades and receive hands-on educational training with the goal of one day becoming journeypersons and project leaders. Local job readiness programs ensure that local workforce needs are met by the local population. And the development of modern training centers guarantees that recruits will receive advanced training on the latest in construction technology, guaranteeing a deep pool of highly skilled workers for tomorrow’s projects.

    These contractors have dedicated significant time and energy in working with business and community leaders, as well as government officials and agencies, to ensure owners, developers and the government have the resources and tools necessary to continue to add to our region’s prosperity. Commercial development has been one of the major economic triggers in recent years, with industry partners playing a huge role in making sure barriers are removed and that resources arrive on time.

    Through years of investment and collaboration, good contractors can guarantee greater standards in the following areas:

    • Reputation, Reliability & Accountability
    • Accurate Commissioning
    • Greater Technical Experience
    • Relationship with Subcontractors
    • Performance on Quality
    • Schedule Commitment
    • Familiarity with Project Scope & Complexity
    • Depth of Resources
    • Training Standards
    • Safety Programs & Performance
    • Drug Free Jobsites
    • Meaningful Warranties
    • Significant Reduction in Change Orders

    So, how do you valuate risk management? In construction it’s as simple as looking at contractors who have gone beyond just investing in their company and looking at those who have also invested in their people and their industry. There you will find contractors who are most skilled at risk management, and who are best positioned to deliver quality projects, on time, on budget and safely.