April 5, 2021

Contain the creep by carefully managing project scope

No one likes a creep. When it comes to construction projects, one kind of creep to avoid is scope creep. This is when the actual work performed on a job gradually expands beyond the contract parameters without compensatory change orders.

Essentially, you end up doing a bunch of extra stuff that you won’t get paid for. To avoid this costly circumstance, you’ve got to contain the creep by carefully managing project scope from the get-go.

Conduct proper preconstruction

From estimating through bid submission, proper scope management brings together your entire staff on Day 1 to get everyone on the same page regarding the project at hand. Some issues to discuss include:

Important assumptions that led to your bid. Many contractors rely on their experience to anticipate how a job will go. This isn’t necessarily a bad thing, but when you assume too much, scope creep can strike. Discuss your assumptions with your project manager and others to ensure you’re not headed for trouble.

Promises you’re making to the owner. In the battle to win a bid, it’s easy to overcommit yourself to extras that don’t show up in the fine print. Review your estimate and be sure that verbal discussions don’t lead to performing things that don’t appear in writing in the contract.

Subcontractors you’ll likely hire for the project. Project scope often expands when subcontractors don’t perform as they are required or expected. Identify the best subs for the job based on a thorough prequalification process.

Potential job problems and opportunities for change orders. Sit down with your project team and go over worst-case scenarios. Then move on to a discussion of situations that may not stop the job but could slow it down considerably.

Last, devise response strategies to these problems — particularly how you may convert alterations to the scope into change orders. Talking about these items often has an additional benefit: It unites everyone on a common vision for the project and encourages them to take ownership of it.

Focus on the contract

During the job, apply a systematic, consistent approach to project management. For instance, to alert you to any developing cost overruns, try to obtain “forward-focused” management and financial reports.

Contractors tend to look at past results in financial reporting. But even if you have a successful history with a certain type of job, each project is different, so you need to manage it responsively to the specific issues in play.

Keeping scope a priority leads to continually evaluating work to ensure you’re staying within the parameters — and price — of the contract. Should a change order arise, you’ll be better prepared to push it through to approval because you’ll be able to quickly and accurately quote the owner a fair price.

Close out in style

The biggest benefit from prioritizing scope comes at the end of a project. That is, when the finish line is in sight, it helps you stay focused by eliminating many of the last-minute distractions that can drag out completion. After all, punch-list time is no time to punch out!

For instance, your preconstruction process should have identified the people responsible for closing out the job. This is important because changing those plans and moving your crew on to the next project too quickly is a mistake. If you do so, you’ll bring in personnel with a learning curve and much less knowledge of the job, which will slow completion and hurt profitability.

Get paid in full

Construction projects are rarely simple. During any job, unexpected events and difficulties occur. In very limited instances, you may want to provide extra services without extra charges to build goodwill. But be careful, because doing so can set the expectation for “freebies.” By and large, you should get paid in full for the work you do.

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