Posted by: Gilad Lev-Shamur | September 13, 2009

Less resources hurt your success chances. Increase you resources pool.

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If you limit your choices only to what seems possible or reasonable, you disconnect yourself from what you truly want, and all that is left is a compromise. 

(Robert Fritz)

A problematic contractor in construction projects (as in any other project) is frustrating thing. I am not talking about someone doing illegal things or clear violations of the contract. The action in these kinds of problems is very clear. I am talking about those contractors who know how your systems work; know exactly where they can push the limit and when they should back up. 

The problem is that you can find yourself choosing again and again from the same pool of resources. You are facing a situation where your standards, purchase organization policy and even the economic environment let you choose between 2 to 3 contractors per discipline and sometimes even bring you to a single source point. 

Do not get me wrong: doing business with someone you have good record with, can make your life easier. He knows your safety standards, you can count on his proposal, he understands the technical environment he needs to work in and so on. Nevertheless, I do not know many project managers who will give up the chance to achieve better agreement by inserting another variable to the equation – add another contractor/vendor to the bid process.

Today global organizations have many reasons why they might want to limit their resources pool (as the number of suppliers will raise, the number of purchase personal and purchase applications need to handle them will increase too. Consolidating few contractors under one firm reduce the supervising headcount in the project team, reduce legal issues and so on), and drive to a more consolidate mode of operation. We can argue whether these action fit all project type (small vs. large, retrofit vs. new building for example), but this is not the target of this post.

So how can you minimize the effect of these trends if we assume we will need to live with them? How can you work in environment where you can choose only from limit options?

  • Avoid the single source – standardization is a good thing. Its keeps the quality in your projects and can speed up your design process. But forcing specific standards without checking all the time other options, can lead you to a single source situation, specifically if you are not large organization that can attract many contractors.
  • Start with small things – it’s easier to insert new contractors for small project tasks. Let them prove themselves. It will be much easier to enlarge their scope after they will work in your organization.  
  • Detail plan – as your contractor know your organization rules, you probably know his mode of operation. You know where his strengths and where you should emphasize your specific demands. As always, better planning reduces costs and surprises even if you work with the same contractors over and over.
  • Do not lose them 1 – if you have small recourse pool, do not reduce it even more… Whenever it ok by the bid results (do not compromise), try to keep work connection with all of them. 

Good judgment comes from experience, and often experience comes from bad judgment.                    

(Rita Mae Brown) 

  • Do not lose them 2– finishing work relationship with contractors is never good thing. If you lose your ability to choose because of that, it can be even worse. Always examine your environment and do your fighting smartly. Remember, the wheel cannot be turnover all the time.
  • Work closely with your purchase rep – keep you purchase rep update with all your projects and limitation on regular basis. It will make the  process of adding new contractor  much easier .

Good luck!

Gilad

 

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