Building Industry Negative Productivity Rates: Don’t Blame the Builders

Building Industry Negative Productivity Rates: Bane of the Industry

Constant reminders of building industry negative productivity rates don’t tell the whole story, in fact, they don’t tell any story, forcing anyone outside the industry to use their imagination. The industry  – an easy mark, traditionally absorbs most of the blame in the collective ethos, as well as do builders ill put to make successful delay claims in their defense. When builders are unable to make successful compensable delay claims, they absorb the cost, as well as the blame for delays by default.

Industry muckety-mucks ensure that new talent and new ideas are suppressed because they fear change that threatens their clandestine models of doing business in closed board rooms, with little visibility, and no accountability.

Evidence of builder wrongdoing seems self-evident: they wear their heart on their sleeves in the works they prosecute – building and nonbuilding construction is always visible and easily critiqued.

White-collar construction crime: overcharges, bid-rigging, collusion, etc., add a considerable surcharge to ordinary costs, between 10 and 60% of total costs. In this way was 1 World Trade Center, at $1,200 erected, shattering $GSF records. Indeed, political and fiduciary maneuvering are the biggest drivers undermining the men and women in the field trying to do their job normally, and with some sense of dignity. This is what ultimately determines a project’s fate: even with great builders, they can be hampered by lack of timely decision making and design information. That is what is driving building industry negative productivity rates

Building industry negative productivity rates are a Global phenomenon – not just in the States, as many assume. The political and fiduciary systems will vary by local, state, and federal governments, and the idiosyncrasies of the construction industries: you have to play the local game, or get out of it, and hit another city. Although the feckless construction industry can’t seem to get out of its own way, it does not own all of the blame for negative production. Moreover, it is only a subset of the industry that is most culpable.

Despite chronic inertia, the root of the problems of building industry negative productivity rates have their prominence in the design, planning, and procurement practices of ownership and stake holders. In this way is a project’s fate predestined in the boardroom well before the contracts are let.

Procurement

Private and Public Ownership have different protocols and objectives, and must be treated independently

Public Work

The term ‘Public Work’ seems to me an oxymoron: it implies that the planning and procurement processes are open, with strict checks and balances that are made transparent to the public, including researchers like myself. Even the most casual observer knows that nothing could be further from the truth. Public entities are all over the map in terms of their MOs: they vacillate from utterly incompetent, to utterly dishonest. Nothing they do is held to private sector scrutiny, despite the fact they are stewards of the public’s tax money. If you want any useful public data you’ll want to familiarize yourself with FOIL applications.

Public agencies have nasty reputations for mindless over-fastidiousness. They are tenacious in rejecting submittals, change orders, and delaying approvals, even seeming to delight in rejecting them. A time-extension – much less a compensable one, is virtually unheard of.

Sloth and ineptitude are rampant in executive public agency leadership: sloth, in that leadership are too lazy and embarrassed to admit their ineptitude: that they are clueless in how to make key decisions, and that they invariably delegate such tasks to others as a matter of survival. These ‘others’ are the ones who are held accountable for poor decision making, whether they are the source of it, or not. Suffice it to say, public agencies are notoriously cheapskate – as if the lowest bidder imperative applies to employees, as well, which means they have little or no incentive and motivation beyond their meager salaries.

Then there are those agencies so over bureaucratized and bloated with redundant and mindless micromanagement responsibilities, or ‘by the book,’ that they can’t help but miss the forest for the trees. Impervious to enhancements, they exist in a sort of Kafkaesque cycle of their own torpor and ineptitude.

Stuck-up agencies, such as the infamous and vituperative New York City’s School Construction Authority force builders to needlessly jump through hoops, while at the same time withholding critical design information, access to work areas, or other encumbrances they do not recognize: ‘hurry up and wait’ is anathema to any builder because it means endless mobilize – demobilize cycles, and increased overhead and general conditions for which they never are reimbursed.

Public agency procurement is governed and restricted according to local, state, and federal laws and ordinances – such as Wicks Law and Davis Bacon. As such, it disfavors any (snide) contribution from the private sector.

So, before you tender your public work bid, familiarize yourself with that specific agencies terms, especially as pertains to changes in the work, and no damage for delay clauses. I have Otherwise, if the project goes south, you are vulnerable to be blamed and held responsible for absorbing delays and general condition expense and overhead all by your lonesome.

Written by

Derek Graham is a Primavera 6 scheduler and schedule oversight consultant for public and private sector projects with four decades of construction industry experience. He has been an active construction expert witness in over 30 cases – both nationwide, and Federally, since 2006, when his book Managing Residential Construction Projects, was published by McGraw Hill