The Only Construction Management Video You Need to Watch

Hey, construction legends. So today we're going to talk about construction management, how to do it wrong and how to do it right. My name is Cian Dillon Brennan. I'm CEO of a company called Quantum Contract Solutions. The reason we make these videos is that there's so many construction companies out there and people in the construction industry that don't understand how to contract manage, how to manage their contracts in general, manage your construction projects, and they end up using lots of money, and the construction industry has the highest insolvency rate out of any industry, and we don't want you to be another statistic. So let's get into it. So generally, when you're a contracts manager or you're in construction management or whatever it is, there's kind of two different aspects to the role. Okay, and it's the second aspect that really, really makes a difference as to whether you're going to be very good at construction management and ultimately have a more profitable construction company or run a more profitable construction project. The first part of it is, and where most people tend to focus, is delivery. So if you are good at delivery, as in making sure that the project runs on schedule, making sure that all of the construction activities goes well, that is obviously very valuable. And if you do it right for the company in general, you're going to increase your reputation for being able to deliver on time. And by increasing your reputation of being good at delivering, you're going to get repeated and referred work, which is the part of the game. So referred work and sole sourcing to clients because they know you can complete a job is obviously very valuable. It's way better than having to tender and then that's it. So most companies and most project managers or whoever's running the construction management side of things on your project focus only on this element. Okay, so that is valuable. And if you're in construction, you've got a project manager who can deliver for you, that is valuable. Okay, but what is really valuable is when you have someone who can also manage the commercial aspects of things, right? So it's very difficult to find someone in construction management who can wear both hats. One hat is delivering on site, delivering the project, and the other hat is delivering contractually and commercially. Now, once you're able to deliver contractually and commercially, you do the bottom side of the equation. Okay, so the top side is delivering on site is going to give you a better reputation, which is going to give you repeated work. And hopefully you can be sole source to clients, which is where you want to be, which is where a lot of the larger companies who have been in business for a long time, they have this up and going already, which is fantastic, right? But the bottom side is if you're getting this repeated work and if you're getting a good reputation in the industry, if you can't afford to do the additional work, well then it's no benefit to you. So if your margins are low and you're delivering on site, that's all well and good, but ultimately you're not going to do well as a company. So there was a story of two electrical contractors on a large oil and gas project. There was two areas of the site. Okay. It's exactly the same scope of work. One company was an established company. They knew what they were doing. They've been around for a long time. They were pretty good at delivering on site, but they're also very commercial. There's another company who essentially were first time at the races. There's their first major project, and their sole focus was to do an amazing job. Okay, so my question to you is, who do you think did better? Right? So as it turns out, the company whose sole focus did an amazing job, they really did do an amazing job, right? And they kept doing it and they kept getting additional work and additional work and additional work. And at the end of the project, they almost went under because they didn't comply with the contracts. It looked like they were late on their original scope because they never did all their paperwork for their variations and all of that sort of stuff. So they ended up not getting paid and then they got hit with liquidated damages. The other company did an okay job, right? But contractually and commercially, they were on top of things and they made a hefty profit and obviously still in business and still doing very well. So if you only focus on one side of the equation, which is just delivering on site and not focusing enough on the contractual and commercial side of things, well then you're going to find yourself in a sticky situation similar to that company. So what you want to do from a construction management point of view is generally quite simple. From a high level, you need to be able to deliver on site, deliver the work on time, on budget. That's only one side of the equation. The other side is you got to be able to deliver commercially, okay? Which means you got to be able to negotiate a good contract upfront, which has lower risk, lower downside. So if something goes wrong, the impact to your company is not as bad. Okay? You also want to set yourself up for success that when you have to submit a change order or a variation or an extension of time claim, that the obligations are not too tough and they're not unrealistic for you to be able to do that. So you got to understand that in most cases, the contract that you've been asked to sign is their worst contract and it's a game. They know they're giving you their worst possible contract and they're expecting you to come back and try and negotiate on a few items. Okay? So if you don't, you're leaving yourself at a loss and you're setting yourself up to have to perform absolutely perfectly in post-award or else you're going to lose money essentially. So that's not what we want. Then when you're in the post-award phase, you need to be on top of your paperwork. You need to submit it for all your notices, all your change orders on time, very, very quickly. And if you haven't got a system to be able to do that, then once again, you're leaving yourself at a loss. So very valuable if you are in construction generally, and you're listening to this, if you are a project manager, or construction manager, or contracts manager, and you're looking to see how can I be valuable to my company, it is those two things. Obviously, one, being able to deliver on site, but if you can deliver contractually and commercially, you're going to be far more valuable to your company, than if you can only deliver on site. So if you look around your company, there's plenty of guys who are amazing at going around site, amazing at getting things done, but contractually, the paperwork and stuff turns them off. Right. So if you can be that person that can deal with the paperwork and deal with the contracts, understand the contracts from what clauses mean, what things, how to negotiate and what you're trying to do to reduce your risk, is going to be incredibly valuable to your company. So we've got a website called constructionsecrets.io. If you head over there, there is free trainings, links to more video trainings, links to podcasts, loads of free stuff for you to check out. So go over there to constructionsecrets.io and check it out, and I'll see you in the next one. Bye-bye.