Doing the Next Right Thing No Matter What!

What is the next right thing in construction?
  • Does your contractor answer your questions promptly and in a way you can understand (without expecting payment for answering questions)?
  • Does your contractor explain the entire procedure to you before you commit funds?
  • Are you fully aware of the detours and roadblocks that may occur from Design to Certificate of Occupancy?
  • Does your contractor tell you how much something might cost before it is fully designed? (Beware if they do)
  • Do you know the various contracts available before you agree on a project delivery method?
  • If your contractor “missed’ something in his estimate, does he try and charge you for his mistake?
  • Did you ever hear your contractor or their subcontractors say, “that’s good enough”? If you have, beware!
  • Do you receive “bad news” as fast as “good news” about your project?
  • Do you hear “that’s not my problem”? Or “Let’s find a solution.”
  • Does your contractor take responsibility for his errors if they appear after completing the project?
  • Does your contractor communicate discrepancies in plans that may cost you money later?

The above questions are some of the questions that we think constitute “doing the right thing.” It is not always easy to do any of the above, especially when it may be at the expense of profit or sometimes prevents the project from moving forward. At Tri-Bay Construction, we strive to ALWAYS do the right thing for our partners and clients, and not doing that compromises our core values.

Our most valuable assets are our professional consultants, designers, subcontractors, suppliers, and, equally important, our clients. Without any one of these components, we would not exist. Our partners, employees, families, and former and current clients allow us to persevere, rise again and transform Tri-Bay into a better and stronger firm. Some of our professional consultants who have guided us through the pandemic and afterward are integral components of our foundation.

While often unnamed and unseen, they provide expertise and perspective that sometimes forges the path forward. I would be remiss if I left out what is perhaps the most essential component and the basis of our core values, family. While the Tri-Bay “family” is vast, the Bay family is the heart of what makes this company thrive. Our extended Tri-Bay family members and our clients are the benefactors of the values ingrained in us for numerous generations.

We are the benefactors of the same values found in our extended family.

The New Reality

We previously talked about the brothers, trust, and integrity. This article focuses on the following:
  • Renewal
  • Transformation
  • Ingenuity
  • Creativity

Let’s face the reality that higher costs are here to stay. While we all battle inflation and setbacks that began in 2020 with the onset of the pandemic and continue today, we still have choices in business and our personal lives. For many, 2021 resulted in catastrophic losses in our fight to overcome the many restrictions we incurred during and after the pandemic.

For some, the challenges were too numerous and overwhelming to overcome, and many small businesses could not go on and had to close permanently. For others, there were increased profits and minimal effects. And perhaps for many small business owners, the challenges resulted in fewer employees, significantly reduced revenue, and a period of just holding on long enough to keep our dreams alive.

For those fortunate enough to hold on, maintain and struggle through 2022, the turning point came in acceptance of the new reality; a changing marketplace where nothing seemed to be the same pre-pandemic. How business is conducted has become entirely new for consumers and businesses alike. In commercial construction, a schedule-driven industry, the supply chain and labor issues have become particularly challenging. Society’s work ethic seems to have been lost for many. Many hoped it would “return to normal.”

Those who realized that what once was, is a thing of the past and that changes had to happen to succeed. Tried and true sequences of building were no longer providing the expected. Creativity and increased cooperation have become a necessity. Because now E comes before D sometimes, new interactions and relationships had to be formed. Those who rarely crossed paths during a project find themselves working alongside trades they never did before. More foresight and increased earlier planning are the new norms.

The phrase “your lack of planning does not constitute an emergency for me” has become more apropos. Doing things the way they used to be done throughout a project will likely result in a very rough road, unhappy clients, and reduced profits.

Isolation, job loss, health issues, more societal angst, personal loss, political unrest, and so many other changes since the pandemic has forced us to look at how we interact with one another. Pressures from the pandemic and its results for each of us have led some to make decisions they ordinarily might not have made. Some of these decisions, intentionally or unintended, were hurtful. Some of these decisions have even allowed some to set aside their core values, no matter the consequence to others. Those on the wrong side of these decisions also have a choice. We can become victims and quit or lament our condition causing further negative consequences for ourselves, or we can recognize where we are, how we arrived there, and most importantly, what we are going to do about it.

This is where some will stand on their core values and thus stand alone at times. This is where some will remain defeated, and others will dig deep into those values and rise above the haze. Like the Phoenix mentioned earlier, we can renew ourselves, our business, and our relationships by standing by our core values of perseverance, integrity, faith, transparency, and trust. We can transform how we do things, communicate with others, and find new and inventive ways to serve others. What was once important becomes a higher priority. Core values are like the foundation of a building; the stronger they are, the more permanent they are. Removing any core values out of convenience or desperation will crumble a foundation and likely result in burned bridges, lost opportunities, and probably the most detrimental loss of respect.

Looking forward to the end of 2022 and ushering in 2023, we are optimistic and excited. Tri-Bay Construction continues to face the challenges of the past and the new normal in the commercial construction industry.

What has not changed is our core values, and they are permanent! Like the Phoenix, we are renewed and ready to provide whatever it takes to serve our past, current, and future clients.

We begin the fourth quarter of 2022 and the first quarter of 2023 with several new construction projects, including three design-build projects. We have assembled design teams that share our core values and continue to work with our valued subcontractors and suppliers. They continue to work with us to make each project more efficient and the best experience possible for our clients.
No matter what the “new normal” is or becomes, our entire team is committed to adapting, transforming, and persevering to provide the most value and least headache in every project we are given the opportunity to construct. 
Where do you fit in this equation?

Good Enough is Not Enough

As each project progresses, we continue to learn valuable lessons that will make the next experience more efficient in this rapidly changing environment. We will continue to set ourselves apart from other General Contractors and not “do what other GC’s do” because it is “good enough” or because “everyone does it that way.”
If you utter the words “that’s good enough,” you will not work with us for long unless you are willing to change that mindset. Going the extra mile for our clients and subcontractors is our brand. Maintaining integrity will always be our first priority.

The day when we know everything there is to know about construction is the day we hang up our toolbelts. There is always a better, more efficient, cleaner, quieter, more innovative way to do what we have done for many years. We will strive to find ways it will benefit you, the client. Willingness without action is fantasy.

Our current state of society, particularly the construction industry, can be seen as a negative environment, or we can have another perspective and see it as the motivation to work differently and to utilize different tools and methods; to overcome new challenges. We can use it as motivation to be:
  • Creative
  • Imaginative
  • Innovative

Let’s not lose that human trait that many of us have, and that is to help one another. The Tri-Bay difference is to help others’ dreams be achieved and to support- one another through each of those experiences no matter what is happening around us.

As the fourth quarter of 2022 is upon us, ask yourselves, “Am I a component of a strong foundation that is holding together the whole? Or, am I an island that is operating separately from the whole and contributing to its ultimate deterioration. When you take from its strength without giving anything in return you are adding to the weakness of the project.

Where do you fit in this equation?

Developing a Collaborative Team

We would like to continue our discussion about the relationship between the Owner and the General Contractor (GC) and take it a step further. While each individual relationship is equally important:
  • GC/Owner;
  • GC/Subcontractors;
  • GC/Suppliers/Design Team
We hope to develop a collaborative team relationship between all parties involved in a construction project from beginning to end:
  • Owner/GC/Design Team/Plan Review
  • Inspections Jurisdiction/Lenders if applicable/Building Owners in the case of tenant build-out space/subcontractors/suppliers.

While all team members may not have individual contact with each another, it is imperative, for a smooth project, that all members understand that each member plays an equal and timely part in the completion of each project. A successful outcome is accomplished by communicating concerns or needs to the proper entity and getting all to the finish line more efficiently and with less interruption. The more team members understand each other’s roles, the more collaborative the effort becomes. We operate from the standpoint that no one entity in a construction project is an “island.”

Efficiency depends upon the understanding that anything any single entity does will affect all the other subsequent members. Visualize a construction project as a giant wagon wheel with a hub in the center, where the GC’s role in a project is the hub. When information does not go through the hub and multiple spokes do not receive the same information, the wheel is knocked out of balance and begins to wobble. The importance of the hub cannot be overemphasized. The Field or Project Superintendent, who is on the site daily, can be considered the center of that hub. 

What cannot be seen and is so often a source of field issues are the ball bearings (administrative support team) that surround the project superintendent and assist them in keeping the wheel turning smoothly.

The hub members play a two-fold role; one without the other can be disastrous for all the other spokes in the wheel. If the Project Superintendent is not utilizing their support team, what can occur are gaps in deliveries, missing subcontractors, missed inspections, etc., resulting in unnecessary schedule delays. 

If the support team is not up to speed on the projects’s progress, and providing the Superintendent with what they need while anticipating what comes next, similar issues can occur.
Equally important as the communication within the hub is the communication from each spoke of the wheel to the hub. For example, if the Owner desires a change and speaks directly with a worker when it is time to get paid, there will be conflict. When it is time for inspection, there will be conflict. When it is time to move forward, there will be delays. For example, suppose the framers, while performing their portion of the work, do not consider all components and associated subcontractors of the project that come after framing. In that case, their work may have to be removed and built again.
Let’s face it, our world is very distracting, and despite many methods of communication, the interaction between individuals on a personal level is disintegrating. We receive snippets of information from the media via text messaging; unfortunately, many get used to this environment. Snippets of information, incomplete sentences, and non-interaction between all members of the team (spokes of the wheel) on a construction project create expensive and time-consuming problems that are avoidable in almost every case.

These are just some of the more glaring challenges making the construction industry a contentious environment right now. Delayed projects create an atmosphere of frustration and often animosity between all parties involved. Finding a viable solution, somewhat palatable to all parties, is an arduous task at best. Today, signing a contract with a liquidated damages clause for project delay could be suicide for a small company.

We strive to bring each team together, create a collaborative environment from beginning to end by communicating often and precisely, and keep the wheel turning with minimal wobble and the hub well-greased. At the project’s completion, the Inspection team is satisfied that everything was built with public safety in mind and that the following occurred:
  • the owner received what they contracted;
  • the owner is satisfied with the value they received for the money spent;
  • the subcontractors are satisfied and able to put their name to the project and hopefully have established working relationships with other trade members;
  • the GC is satisfied that everyone performed up to expectations and their reputation can be proudly attached to the project;
  • and the most significant and valuable result for all is that, relationships bolstered, no one was hurt in the course of work and money was made. And every team member would be willing to work together again on the next project. The best reward for this GC is to hear, "We can't wait to work with you again on our next project."

Owner and General Contractor Relationship

Our last issue brought together the concept of the close link between collaboration, trust, and integrity. We talked about teamwork and the ability to admit mistakes, integrate each part into the whole, and find collective solutions to the challenges that inevitably arise on a construction project.
In this blog, we would like to focus on the Owner and the General Contractor (or Design-Builder) relationship and how important transparency, trust, and honesty are in that relationship. This relationship is often the foundation on which a successful project is built.

Today’s economic climate demands an acceptance of reality and a willingness to work within that reality and compromise. Until our supply chain issues are resolved or at least brought to some sort of normalcy, knowing when a product or material will actually arrive has become a mystery making finite schedules, definite completion dates, and liquidated damages clauses in contracts a desire ( a wish) more than a possibility or a reality.

This environment is treacherous for both the Owners and the General Contractors/Design-Builder. Owners lease space that must be occupied by a specific time or there are financial consequences; lenders want to know a finite cost and a finite date to structure their loans. General Contractors MUST minimize overhead costs on every project as the profit margins are small in such a competitive industry.

Today, the reality is that subcontractors and suppliers are putting very short limits on their cost proposals, some as little as seven days. Some suppliers are less transparent and will provide a cost proposal, and then when the product arrives, they announce a cost increase and will not deliver until the material is paid in full.
Others include several month lead times for materials, often longer than the project’s duration. These are just some of the challenges we all face in the construction industry and the shortages of skilled labor and rising wages for some of the skilled labor in highest demand; one example is Block Masons.

These are just some of the more glaring challenges making the construction industry a contentious environment right now. Delayed projects create an atmosphere of frustration and often animosity between all parties involved. Finding a viable solution, somewhat palatable to all parties, is an arduous task at best. Today, signing a contract with a liquidated damages clause for project delay could be suicide for a small company.

Especially when there is no way to know:
  • when materials might arrive
  • if the entity supplying the material is telling the truth (they may not even know!)
But giving a contractor an open calendar for completing a project could be suicide for the Owners. The solution must come in:
  • communication
  • mutual understanding,
  • and a very carefully phrased compromise regarding scheduling in the Owner/Builder contract.
Since every construction project is unique, requiring various types and quantities of materials, it is challenging to compose a one size fits all scheduling clause. This is also true of material escalation clauses, and there is no standard escalation clause that can be used for all contracts on all projects.

In the past, a GC was often able to absorb a small percentage increase in one or two items throughout the project’s duration without any impact on the Owner or subcontractors. In our current climate, 10-15% increases have been commonplace in multiple disciplines, from project conception to actual material delivery. A GC cannot absorb all those unexpected costs and remain in business. An owner, however, can recoup those costs over time through the business that will operate in the new facility or from lease income. If a GC absorbs those costs, they will never be recovered, as the GC does not have a stake in future business revenue for that property.

Our hope at Tri-Bay Construction is that our relationships are based on a mutual understanding that we are all in business for a profit and cannot work solely for the benefit of others, receiving nothing for our efforts.

A mutual agreement about realities, compromises on both sides, and open, transparent communication throughout the process are mandatory for a construction project to go smoothly (with the usual bumps in the road) from Owner to GC, to Subcontractors, and to material suppliers.

Subcontractors often bear the brunt of our current climate. Unfortunately, they are usually in the middle, between the suppliers who cannot guarantee cost or delivery dates and the General Contractors who demand production. The ripple effect has amplified what has always existed in construction when a defined scope was not ready for the next trade. Instead of losing two or three days because of rescheduling one subcontractor, the losses are now often two to three weeks.
Doing what you say you will do is even more critical and increasingly valuable. The balance for subcontractors in juggling workers for multiple projects has become ever more complicated and delicate because there is so much work and not enough workers. The tendency is to schedule very tightly, sometimes too tightly, so when there is a delay in one project, it can cause a delay in multiple projects. Established relationships with subcontractors have become even more valuable to General Contractors. In today’s climate, this costs a little bit more.

It is on the onus of Owners and General Contractors to understand each other’s concerns, challenges, and reasons for particular demands or requirements and then try to work together to meet the needs of both parties. In the words of our attorney, there will never be a perfect contract that covers everything, but we do our best to cover as much as possible.

If both parties are more educated about the other’s business needs, the more likely a compromise can be reached. From earlier learning, a written contract exists solely for the event that something goes dreadfully wrong, then each party will know what to do next. If the parties are willing to see the boat from both sides, the contract will never be looked at again after it is signed.

The contract’s purpose becomes the “boundary of integrity” for both sides if the following happens:
  • Reach a compromise,
  • both parties agree to sign the contract
  • and then place their signatures on the paperwork (agreement).
If there is integrity in the individuals who signed the contract, there can be confidence and trust in the relationship.

Trust should be established early in a relationship. The more open and transparent two people are with one another, especially in business, the stronger that relationship grows. While every relationship has inherent risks, the stronger the foundation, the less likely the contract is ever needed after the initial execution.

Today we wonder if our Steel, Aluminum, Copper wire, Windows, or Doors (to name just a few) are coming on a specific date or will they be delayed again for some contrived reason or just an “I don’t know” from the supplier. Today we have no idea how long Plan Review might take in any given jurisdiction, so we are hiring third-party plan reviewers (at a cost to the Owners) in an effort to expedite the process. We do not know if a cost escalation between the time we estimate a project and the issuing of the permit will cause the Owner to cancel the project.
The number of phone calls and emails to assemble a complete estimate has doubled. The time it takes to collect all the proposals required to produce an estimate has also doubled because subcontractors and suppliers are extremely busy. Estimate requests or Requests for Proposals (RFPs) often sit unanswered for weeks unless followed up regularly. These and many other factors have significantly increased Commercial and Residential Construction costs. There are no exceptions to rising costs in our current economy.

The end-user (us) has had to bear the rising costs of food, fuel to get the food to us, Grocery worker’s wages, farmworker shortages, and farmer’s costs to run the farms. GCs also must bear the rising costs of materials, labor, fuel, equipment, and the cost of money itself to run our business.

An Owner should never go to sleep at night wondering how his General Contractor is “getting over on him,” and a Design-Builder/GC should never go to sleep at night wondering if the Owner he signed a contract with is going to pay him according to the agreement.
Are you ready to talk about your next project where we promise a relationship built on mutual respect and transparency? Let’s talk.
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