One of the most challenging times for contractors can be in a rising market. They have fixed price contracts and their input costs can be rising outside their control.
Being aware of good commercial project management techniques and the legal framework you are operating under are the basic fundamentals to surviving in what can be a volatile economy.
The tendering and contracting team within the CIF have been working for the past number of years to provide the best guidance and support for our member companies operating at both specialist, sub-contract and main contract levels.
A healthy relationship where all parties understand the market risks and have good commercial awareness is critical to project success.
Project success for both parties should be a mutual aim. There’s no point in going into a job with an adversarial mindset with other contractors you will be working with.
At the end of the day, if you can’t cooperate then it’s quite possible that you both might not see out the end of the contract and end up in dispute.
Then more time and energy is lost on trying to resolve matters compared with an open constructive relationship – at least in terms of your aims at the beginning.
In the CIF we have regularly provided webinars and training programmes to allow companies to develop practical, expert level competency in commercial project management.
We believe that communication between parties and systematic documentation management are the foundation for any successful project. The need to balance risk – it’s been a long time coming but we need to see an amendment to the price variation clause in Government contracts.
We need something that gives a much more balanced, fair and achievable exposure to risk for contractors.
Meanwhile, the role of standing conciliators in projects over €10million has been very successful, which merits consideration in introducing the concept and principles for smaller projects.
The principles should be the same but simplified for smaller projects, to avoid adding significant costs to the teams. In principle a simplified access and coaching programme could replicate the success of the standing conciliator in smaller projects.
It is worth noting too that the Office of Government Procurement (OGP) is a very effective leadership group on the Government Construction Contracts Committee (GCCC). The OGP and its staff are taking a very progressive approach to modernising procurement.
Unfortunately, the resources given to the OGP are lacking, as a result they can take a very long time to develop guidance and bring in new procedures but when they do, it can be very effective. Know thyself.
Understanding your contract and the construction contracts act legislation that underpins your payment rights are key to maintaining a healthy business.
In the CIF we offer training and telephone support for our member companies to help them understand their risk profile and the options they have when they encounter difficulties on projects.
These supports are available in recorded sessions on the Contractors Resource Hub at www.cif.ie.
My colleagues and I in the tendering and contracting team remain available to guide you on your approach to staying in business.