How To Avoid 4 Expensive Pitfalls: Guidance for General Contractors

15 November 2021

Construction projects are never inexpensive, but the rising price of materials during 2021 is now driving up the cost of construction projects around the world, including in the United States, the UK and Ireland. Unsurprisingly, these spiralling costs, along with supply-chain bottlenecks and labor shortages, are having a very real effect on the ability of construction firms to finish existing projects in time and on budget. Government data showed that in the UK, material costs surged by 23% during the 2021 and these increasing costs could continue well into 2022.

The risk of increasing costs is firmly at the forefront of construction firm’s minds, keeping tight control over the purse strings is more important than ever. One of the best ways to do this is to make sure that they have processes in place so that they can escape any potentially expensive pitfalls caused by avoidable mistakes.

Here are our top tips on avoiding four of the most common mistakes in construction.

1 – Scope creep

Of all of the expensive issues that are likely to arise on a construction project, scope creep is undoubtedly one of the worst. Scope creep is defined as expansion or changes to the initial scope of the project that takes it beyond what was initially intended. There are a number of factors that can contribute towards scope creep. These include:

  • Poorly defined scope to begin with, with not enough emphasis on details.
  • Incomplete plans and specifications.
  • Poor communication between the owner and construction company.
  • Mismanagement of change orders.
  • Project owners changing their mind about what they want.

While not every change order will necessarily result in additional costs or extensions to the project timeframe, there is no doubting that some do, adding thousands of dollars or weeks of work to an already tightly budgeted and scheduled project.

The best way to prevent scope creep is to ensure that your construction project contract clearly states how any work that falls outside of the original scope should be requested and documented. Insist that the request is authorized by the client, and agree, in writing, on any additional costs and extensions to the project timeline before any work commences.

2 – Failure to document workers on a project

Although construction sites are primarily manual workplaces, just like any other business, there is a lot of administration involved in keeping things running smoothly. One of these is documenting the actual workers who are carrying out the project. Subcontractors come in many shapes and forms, but each should be properly trained, certified and onboarded before being let loose on the site. The reason for this is simple – safety. A worker who hasn’t achieved the right qualifications and who hasn’t had the necessary training is a huge risk, both to themselves and to other people around them.

The nature of construction work means that site offices are often set up in a hurry, which can make organising the paperwork and documentation needed to comply with regulations, keep records of procedures and safety checks and communicate with your team extremely difficult. Failing to monitor the hours of workers accurately is another common pitfall in construction. Unless they are logged on the day, every day, it can be hard for workers to remember the times that they worked. Since they are more likely to over-estimate than underestimate, it could add unexpected costs to your construction project.

Fortunately, it doesn’t have to be. Technology can take much of the administrative strain out of construction projects and help business owners to avoid potentially expensive financial pitfalls associated with poor organisation. For example, GoContractor is an SAAS solution that provides a single, central and accessible place for all documentation, from safety certificates and worker compliance records to onboarding information, videos and more. GoContractor can be accessed anytime, from anywhere in the world and enables safety teams to easily see if worker documents, qualifications are expiring soon so they can address it before it happens. This also helps to avoid project delays that could cost you time and money. Meanwhile, GoContractor integrations can control site access, making sure that only people who should be on site are and keeping accurate records of hours worked.

3 – Failing to qualify subcontractors

Pre-qualification is an important process that ensures that you’ve selected the best possible subcontractors for your construction projects. Great construction firms have detailed prequalification processes that not only help them to choose the right subcontractors, but that also help them to mitigate risk. One of the best measures of a company’s safety record is their EMR – experience modification rating. EMR is a number that insurance companies use to gauge both the costs incurred due to past injuries and the chances of any future risk.

Mistakes on construction sites are extremely expensive, especially when they relate to health and safety and the failure to properly qualify subcontractors. In May 2021, a construction firm in the UK was ordered to pay more than $400k in fines and costs after a worker was injured when an air conditioning plant fell on him. It transpired that none of the workers had any formal training on carrying out lifting operations or slinging loads. The client was unaware that one of the contractors had subcontracted the construction work and hadn’t done their due diligence during qualification. Again, implementing a software solution like GoContractor can be beneficial as once you’ve pre-qualified your contractors, all paperwork they’ve provided in relation to the pre-qualification can be uploaded, creating a central hub of records that can be referred to should you need to refer to them.

4 – Bidding mistakes

The financial success of some construction projects is won, or lost, before any workers have even set foot on site. Bidding is one of the most important aspects of any build, and good bid preparation is crucial if you are to accurately estimate costs and make a profit.

You need to make sure that you are carefully calculating measurements, materials and quantities, as well as the amount of labour required to finish the job. Inaccuracy will cause you to miscalculate the amount of materials and labour needed, and you could end up underestimating and then undercharging, leaving you out of pocket. Contractors also need to keep track of the estimated costs versus their actual costs, particularly during times of inflation.

Access is another important area to factor in, as many sites have unique conditions that result in additional expenses for things like transportation and equipment. Failure to account for these when creating your bid could cost you dearly, both in terms of paying out any additional access costs, as well as the time it takes to organize them.

While every construction company worries about unexpected costs, you can avoid expensive mistakes on construction projects by utilizing the tools that are available, including GoContractor. Learn more about how top construction companies are using GoContractor to eliminate paperwork and solve access control and badging issues. Schedule a demo today.

Zack Berglind

Zack Berglind is the Marketing Manager for GoContractor

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