March 28, 2007

Associations

Tight scheduling ups risk for subcontractors

Peter Mitham

correspondent

Scheduling delays on construction projects are increasing the financial and logistical risks borne by mechanical contractors and other subtrades in British Columbia

Completion dates for work are typically written into tender documents and many contracts are fixing project costs from the outset, putting the brunt of delays on subtrades. Trades become responsible for managing the impact of delays and any cost overruns stemming that result. The adjustments frequently force them to heighten their management of the flow of materials and equipment to site.

“Scheduling delays actually cost trades money,” said Andrew Wong, a vice-president with Alpha Mechanical Contracting Ltd. in Port Coquitlam and the president-elect of the Mechanical Contractors Association of B.C.

A delay on one job forces trades to rejig their scheduling, potentially having a knock-on effect on other jobs. While trades will typically try to honour their contracts, the cost of accelerating a job adds up when additional labour is required to complete a job in less time than initially scheduled.

“The costs are further compounded when these resources are needed elsewhere, particularly in such a busy construction environment where qualified and available resources are at a premium,” Wong said.

Peter Mitham

Andrew Wong of Alpha Mechanical Contracting Ltd., stands in the mechanical room of the Royal Columbian Hospital in New Westminster, which recently underwent a $1.5-million systems upgrade to support an expansion of the hospital's intensive care unit. Upgrades include a makeover of the medical gas system including vacuum, oxygen and air lines, plumbing, HVAC and fire suppression system. Seismic reinforcements were also conducted.

The cost in lost productivity is more difficult to tabulate.

When the time available to manage jobs drops, Wong said contractors become more reactive and have less time to draft effective work plans. That’s not only inefficient but increases the risk of error on the job site.

“You can certainly put (tradespeople) to work, but how productive are they going to be when you don’t have time to plan?” he asked, noting that delays can also prevent the continuous site access that helps keep jobs moving.

Scheduling delays also force contractors to pay closer attention to ordering and storing supplies and equipment, which can put pressure on cash flows.

Mechanical contractors, for instance, face challenges sourcing, handling and storing sensitive equipment without necessarily having opportunities to recover the costs.

“Trades should be compensated for the extra time and/or risk,” Wong said.

To ensure a steadier flow of projects, MCABC executive vice-president Dana Taylor said some contractors are cutting deals that garner them a premium for reserving themselves for specific jobs. This guarantees them work, while allowing them to avoid other projects with a high hassle factor.

The approach seems to work, Taylor said, especially in a market where labour is in short supply.

“You have to plan a fair bit of time out, just to be sure you have the people,” Taylor said.

It’s not just the average trades worker that’s hard to come by.

When schedules back-up, and several activities begin running simultaneously on site, greater supervision is needed. And supervisors are as hard to find as skilled tradespeople.

“It’s a lot of additional work on the project manager,” Wong said.

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