The World Famous "Fence Wizard": The "John 3.16" of your large fence project management.

Saturday, December 8, 2007

The "John 3.16" of your large fence project management.

This post will likely be the most important information that you will ever read here at the Fence Wizard Blog. We say that because if you follow this advice carefully you can avoid being trapped in a position that can unfairly cost you thousands of dollars as a prime contractor or a subcontractor. The Topic: "Organizing and maintaining Correspondence". Have no idea what I'm referring to? That's OK - your in the vast majority group of people who are not attorneys - surely a good thing.

First off this post is specifically a guide for how to manage information from the moment you meet a customer until final payment is received. We are not tackling contracts, profit markup's, bidding, or any type of selling are thinking: "What else is there?".

Now - follow this line of thinking: Once you sign a contract with a customer, general contractor, or any entity whatsoever; you are entering a "Legal Agreement". MOST customers will attempt to breach this contract by encouraging you to do work beyond the explicit agreement without compensation. Your goal as a "FOR PROFIT" business is to avoid providing free services at every possible opportunity!

You are reading more carefully now because you are now thinking of the last customer who did this to you - and it may well have been within the past week. Do not get into the truck ever again ready to kill somebody because you just caved in and agreed to provide extra work for a customer who is breaching what you thought was a clear contract for work. All of us have 10,000 of these stories so I wont write the full book here. Every contractor knows this problem; how do you keep yourself out of the work for nothing change order game?

Start Here. From the moment you meet a customer (by phone or in person) begin keeping detailed notes about everything the customer says. Even if they are using incorrect product language or descriptions WRITE IT DOWN and KEEP YOUR NOTES ! It is amazing how many customers will refer to the first or second phone call that you had with them and claim that they had implied for you to include a particular item in your bid (how could they possibly know that you forgot that conversation and did not include the diamond encrusted strike latch (dipped in liquid platinum). Well, the fact is they probably never mentioned the latch - but since you can't remember all 2,000 phone calls this week and you have no method to prove them wrong - you now have to give away the diamond encrusted latch and how on earth will you melt the platinum. While you must begin with good notes, you must take the time to reasonably list all important items and spec descriptions on your work proposal or contract. If your proposal is detailed and never mentions the special latch , then you have ground to stand on. If your proposal and contract never mention any product details - then it can't be assumed that you included or excluded the special latch. Please allow the latch example to be synonimous with (Part 203 F of the 300 page job book that you priced to the school district) or (Option 13 to the Army Core of Engineers that included adding six gate operators but deleting 1800' of a Concrete Retaining Wall previously listed in Option 7A and 7B.

Ok - so first we must keep good "Phone Notes" from day one; second a detailed work proposal or contract. Now the job starts; this means that unexpected events will occur - but before they do you are going to begin keeping a "Daily Project Log". Contractors who win lawsuits brought against them often have just one piece of relevant evidence: THE DAILY PROJECT LOGBOOK. Why? Because a Daily log is the only method you have for proving job site conditions, scheduled events, peculiar things, the light rainfall on Tuesday, your workers hours on site, and any other acts of God that can and will occur. Often small miscellaneous inputs in a logbook will trigger the memory of other things that happened 18 work days ago when the landscaping company was trenching along your posts holes (now a telephone cable is out and you are tagged with a bill for repair). There are millions of reasons to keep project logs; as a rule of thumb for small and mid size fence companies - utilize them for every public works project and every job that will account for 3% or more of your estimated yearly gross income. The format is not crucial but you need to include: the date, weather conditions, scheduled events for the day, worker list with time in and time out, safety meetings and sign ins, and the rest and often the majority should be for miscellaneous notes such as "Dave, the assistant manager, asked for workers to park on street instead of the parking lot for the duration of the project". (Knowing the exact day you were asked to do this could be important - hopefully it is not).

The Project Logs are essential but here is another tip that will not eat up any of your time or your foreman's time: Ask your customer to email you all questions or requests. I know you have email or you would not be reading this. Email is best automatic correspondence device. It marks the exact time and is an exact quote of whatever your customer wants or wants to know about. Email is the contractors best friend and it can bail you out of major disagreements if you can force your customers to use it. The fact is that when you get a cell phone call while you are trying to load a bobcat you are going to forget a certain percentage of the conversation. Very simply ask the caller to shoot you an email because you can't write the message down at the moment. This is the best habit you can get in; avoid blindly discussing project details when you are ill prepared to do so; the customer has the advantage in those scenarios because they prepared prior to calling you. Remember , whatever you say will be held against you when the customer is looking for free add on.

When you follow those basic steps you will have important reference tools for an argument, should one occur. The reality is that doing these things avoids arguments and misunderstandings. There is still the question of how to handle a customer that has a passive aggressive technique of pushing you into a bad position. You have to be tough and calm in these situations - a fight with the customer will never help you finish the job or get paid - never. If you can, avoid making any decisions at the moment a customer corners you. The reality is that a customer can and will develop a strategy to confront you on something you have not thought about and had no intention of providing. Being caught off guard often causes us to simply give in to requests because we feel nervous or unprepared. Listen to all requests, if you do not feel comfortable explaining any answers - then reply: "please let me review my notes and I will call you from the office" or "its a good question, let me review it with the boss and find out".
(SIDENOTE: Its always to your benefit to have a secret evil boss). If you can buy yourself some time you can make a better decision about throwing in the strike latch or presenting your customer with evidence that they chose the fork latch and what the change order amount would be "to add that item to the project". The reality is that sometimes you must throw something in to close out a job. When you provide anything beyond your agreement but decide not to charge for it- send your customer an invoice with the description of the extra work, the fair value price, and then credit the account for a reason such as "good customer discount". It is vital that the customer see what the value of the "free" service was. This encourages them to not actually think its free - reasonable people do not expect free things; they just want a good deal.

Again, unexpected events will occur on every job site and you must protect your company. We know this will happen - when it does:RELAX and do not take personal blame for not having Wizardly foresight. Use your notes and collection of correspondence to prove yourself right; you deserve to be paid for extra work. But are your employees doing extra work without you knowing??? Stay tuned to the Wizard, that article is coming soon.

For a far more detailed experience on the topic The Fence Wizard recommends these books:
Contractor's Guide to Change Orders
Construction Daily Project Log for Construction & Maintenance


Anonymous said...

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