You’re excited. That dream project you’ve been looking for just showed up, and you can’t wait to get started. Somewhere in the back of your mind, though, there’s a little voice that’s nagging you. Is it really as good as it looks? Here are the signs it could be a project from hell instead of the project of your dreams.
It’s not in your wheelhouse
You’re familiar with certain types of construction, and as you gain more experience, they become your specialty. You excel at them because you understand the materials, methods, labor requirements and risks. You are probably also well-schooled in specific delivery methods like design-bid-build, design-build or construction-manager-at-risk. These areas of expertise make up your core offerings, and they’re important. Straying from your expertise creates more risk, whether it’s management risks, safety risks, quality risks or financial risks.
Straying from your expertise creates more risk, whether it’s management risks, safety risks, quality risks or financial risks.
It’s generally safer to play to your strengths. Taking on projects that don’t line up with your expertise is riskier than sticking with what you know.
It doesn’t line up with your business goals
You’ve done a business plan that you review at least once a year. Like all good plans, yours includes goals for the business. No doubt, you have short-term and long-term goals.
Maybe you’re specializing in commercial construction by focusing on lodging. However, you know the market will have cyclical ups and downs, so you’ve also specialized in the related hospitality segment of restaurants. You decided last year when you reviewed your business plan to focus on getting more corporate restaurant business to help you even out the ups and downs of work in that segment. So far, that’s going well and you’ve added a couple of corporate accounts.
Working outside of your expertise will require some preparation, so be sure you take on something on that lines up with your business goals.
Out of the blue you get asked to bid on an amusement park. It’s in a sector related to hospitality, and it could help fill the calendar in an otherwise slow period. While the structures might be familiar to you, the whole aspect of building the attractions is not. What if you get bogged down in the unfamiliar and end up missing another opportunity in the corporate restaurant sector? Working outside of your expertise will require some preparation, so be sure you’re taking something on that lines up with your business goals.
It’s a long way from home
Project management becomes more difficult the farther you stray from the home office. Besides having to work with unfamiliar contractors and subcontractors, you also have to deal with different vendors, government officials and labor sources. Ideally, you’ll have time to lay the groundwork before ground break, but you’d better be sure. Being the new kid on the block often means you’ll face resistance from local businesses who have a vested interest in keeping the work local.
Being the new kid on the block often means you’ll face resistance from local businesses who have a vested interest in keeping the work local.
You’ll also have to jump more hurdles to handle your banking needs, and without establishing a second office in the new location, administrative support will also suffer. If you have to keep a project on schedule and on budget while you get established in a new location, you face greater risks than just the project risks.
Unclear project scope
All project scopes go through a metamorphosis, changing with new information and new conditions. Some projects aren’t very well thought out before they’re launched, leading to uncertainty right from the start. You can usually detect projects with poor scopes by reviewing the contract documents very carefully. You must pay attention to more than just a cursory plan and contract review because the scope problems are typically found in the deeper layers of the project.
You can usually detect projects with poor scopes by reviewing the contract documents very carefully.
On the plans, look carefully at the callouts. Do they have the same level of detail as the rest of the plans? If the project involves changes to existing structures, how thorough are the previous “as builts”? Do they show aspects that don’t exist, or neglect to show elements that do? And what about the contract? Do you see vague wording in the project description? Is the Scope of Work detailed and representative of the type of requirements needed to deliver the project as described? Do your review from a holistic perspective, taking into account all project documents and how realistically they relate to each other.
Finally, pay attention to the wildcards. Every project includes the possibility of unexpected risk. These surprises are seldom pleasant and frequently lead to scheduling and cost issues. The season work is done carries weather risks. The project size carries bonding risks. Some projects have more unknowns, posing greater risks of all kinds. Make a list of risks particular to the project you’re considering so you clearly see the challenges you face.