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USGNN Original StoryWebinar Shares Tips for Contract Glaziers: How to Get Paid and Keep It
March 13, 2009

"There are three steps to profitability: describe the work; define trade standards; and billing with a budget report. "

So said Bill Dexter, a risk-management consultant and trainer, who led a discussion that focused on helping subcontractors get (and stay) paid in these tough economic times. The online webinar was sponsored by the Construction Specification Institute (CSI).

Dexter stressed that one of the most important steps is to make sure you are getting and giving feedback to owners, who may otherwise not know where the money they are putting out is actually going.

"When you meet with a new owner, their ultimate concern is the budget," says Dexter, explaining there are several things that an owner wants to know:

  • They want to know if you have the talent and resources to build their [project];
  • They want to know how much it will cost; and
  • They want to know when it will be done.

"There are three steps to profitability: describe the work; define trade standards; and billing with a budget report," said Dexter.

In describing the work, Dexter said to be sure and know what items you are going to include and how much of each item is included. He added to be sure and know where you can get that information and "understand exactly what it is you are asked to do," he said in explaining the importance of also defining the scope.

"Who will do this? You? The architect? The owner?"

He also talked about the importance of detailed specifications.

"Create detailed specifications to ensure the owner and everyone else advising him knows exactly what you are doing," said Dexter. "[Let them know] what brands are included, what equipment is included, etc. Also, take time to include the work you are not going to do."

Next, Dexter explained that a departure from trade standards is the number-one consumer complaint against subcontractors/contractors. He took a few minutes to explain the various levels of standards, starting with the minimum standards.

"The minimum standards are the building codes and other codes, while the "higher" trade standards are those created by professional trade associations.

"These set different protocols and practices, but they are not enforced unless they are written into a specification," Dexter said.

The highest trade standards are the manufacturers' specifications and instructions for the specific item being installed.

"These cannot be changed and they carry the same weight as the codes," said Dexter, who added that when posed with a disagreement between a building code and a manufacturer's specification, the specification is the one to follow.

Finally, he noted that there are also "unachievable" standards, an owner's unrealistic expectations for quality of materials and methods, as well as "false" trade standards, such as following or not following "custom and practice."

"This is like casual Friday; some choose to wear blue jeans to work, while others may not," said Dexter. "It's different for everyone, everywhere and you do not have to do it."

Another "false" is the standard of care.

"There is no such thing in the construction business," Dexter said.

In order to narrow down the trade standards, Dexter suggested doing the following:

  • In the contract, describe exactly to which standards you will build;
  • In an exhibit, list the expected performance of materials and methods; and
  • By reference, incorporate the residential and light commercial construction standards.

Another point Dexter covered was billing with a budget.

"The flow of cash from the owner is his gauge on how well the project is going," said Dexter.

And, when it comes to subcontractors and bids, he said there are good, bad and ugly.

On the good side, are detailed job inclusions and exclusions; unit costs and specifications; and time to complete the work.

On the bad side are lump-sum only bids and a lack of specifications. The ugly includes errors in estimating and a lack of exclusions.

In the end, Dexter stressed the importance of overall customer service.

"The better informed the owner, the better the project will go and the more profit you can see."

The CSI webinar series continues Tuesday, March 24 and will cover alternative dispute resolution; establishing internal policies regarding dispute negotiations; and transferring costly risks away from your company.

Stay tuned to USGNN.com™ for a report from the final session.

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