Spotting Problem Projects

Perhaps more than any other specialty contractor, electrical contractors bear the brunt of the "problem project.” Long after most other trades have completed their work and scattered in the wind, electrical contractors remain on site until the owner’s last inspection. And when the project is a “problem project,” the owner or prime contractor tend to liberally share their losses and liquidated damages among those specialty contractors remaining on site at the end. So what is an electrical contractor to do when the project starts coming off the rails?
What is a Problem Project?
problem projects.jpgFirst, it helps to identify the attributes of a problem project. While there are many negative qualities of a bad job, a problem project is one that busts budgets – whether labor, material, or time. Most commonly, the problem project will significantly exceed the labor budget. Because an electrical contractor’s most important (and understandably expensive) resource is its people, the labor budget is critical to the success of a job. When a project suffers delays or is ineptly managed, the labor costs soar, turning a potentially profitable job into a disaster.
Causes of Problem Projects
Second, to spot a problem project, electrical contractors must know what causes them. Problem projects are caused by forces that increase labor, materials, overhead, and other costs without an associated increase in contract price. In addition, a project can encounter a critical problem before it begins – when the contract price is based on a low estimate.
Common causes of increased costs are lack of progress or inefficient progress, inadequate or inferior schedules, or deficient design and defective work. One of the more obvious cost drivers is inadequate or inefficient progress. Lack of progress or delay directly affects labor costs by causing electricians to remain on site longer than reasonably anticipated. Most electrical contractors base their contract price on a labor budget, and when delays cause additional labor costs a deficit is not far away.
Inadequate progress is usually caused by a slow project participant or poor project management. When one of the other trades fall behind it is important for the owner or prime contractor to address the problem, because the electrical contractor and other trades have no authority to compel faster performance. Poor project management can include inexperienced or incompetent superintendents or lack of coordination with trade contractors. Common symptoms of inefficient progress include multiple start-stops, hopscotching, or trade stacking.
When an owner or prime contractor fails to properly schedule, coordinate, and sequence the work of trades, the workable area becomes scarce and work becomes less efficient. This role should not be taken lightly – the failure to schedule, coordinate, and sequence the work can have devastating consequences on the job – as a whole – and on each specialty contractor.
When the owner or prime contractor fails to coordinate, an electrical contractor’s labor, material, and time budgets are impacted. In some cases, an electrical contractor may be directed or may logically assume they should proceed with installing overhead conduit. But if other overhead work should have been installed before the conduit, the electrical contractor may be required to remove the conduit and eventually reinstall. Whether or not the electrical contractor should have kno