ClockShark Blog

How clients accidentally sabotage construction projects, and how you can stop it

May 4, 2017

Will your client contribute to your construction projects success, or to its failure?

Regrettably, sometimes projects end badly. They are of poor quality, aren’t fit for purpose, they are completed late, they end over budget, have people injured or killed during construction, or they do not deliver value for money. When construction projects go wrong contractors are usually blamed. If they can’t be found responsible, then the problem must be a result of the designers’ actions. Unfortunately, often the problem is a result of the client, or customer’s, actions – or lack of actions. Clients have certain responsibilities, and some of these start long before the construction process begins. It’s important that contractors ensure that their clients fulfill these obligations, because failures could be devastating for the project, and possibly for the contractor.

The client’s obligations

The client should ensure that they are constructing the best project, in the right place, at the right time which will provide the required outcomes they desire. There are many ‘white elephants’ in the world, projects that are built for the wrong reasons, possibly in the wrong place, or a project that is clearly unsuitable. Clients need to properly research their projects before starting work to ensure the project will be the optimal project that will yield the best value and result.

But even when the client has chosen the most suitable project in the optimal location they have many responsibilities that they need to comply with to ensure the contractor can carry out the project works (some of these may be outlined within the contract documents).

The client’s responsibilities include, amongst others:

  • Ensuring they have the project finance in place to enable payment of the contractor and other parties – including paying for permits, fees, deposits, and insurances, where relevant.
  • Paying all parties on time for services rendered in accordance with the contract.
  • Paying progress invoices in accordance with the contract, without withholding payments for no reason, or for reasons that aren’t in accordance with the contract and reasons which haven’t been adequately and promptly supplied to the contractor.
  • Demarcating property boundaries.
  • Ensuring they have ownership of the property.
  • Putting all approvals in place, such as planning, building, traffic, and environmental, unless obtaining these approvals is specifically included in the designer’s, project manager or the contractor’s scope of work.
  • Appointing an appropriately qualified design and work supervision team (unless this responsibly has been given entirely to the contractor).
  • If there is no managing contractor they should manage the design team, including, but not limited to, ensuring the team produces appropriate information on time, to the correct quality requirements, and in accordance with the project scope, and that the team is responsive to problems and queries.
  • Ensuring there is cooperation amongst all members of the contract team.
  • Ensuring project issues are promptly and effectively dealt with.
  • Promptly assessing and resolving variation claims.
  • Dealing with all parties in a fair and reasonable manner.
  • Compiling contract documentation that:
    • Have no contradictory clauses.
    • Are legally enforceable.
    • Clearly set out the project scope of works and the terms and conditions of the contract.
    • Allocates risk appropriately, (which should be to the party that can best mitigate the risk).
    • Has appropriate dispute resolution mechanisms.
  • Adjudicating all tenders and quotes honestly and fairly, and don’t share other contractor’s prices with their preferred contractor. It should be noted that contractors usually spend substantial time, effort and money into preparing project bids and they expect that their prices will be dealt with in a fair manner.
  • When adjudicating project prices, make inquiries with the contractor if there are any concerns with their price or submission. When a contractor’s price appears to be far lower than other prices, or what the budget is, then it’s pertinent to check that the contractor hasn’t made errors and that they can deliver the project to the required standards for the price they offered. Contractors who have made errors with their price may not be able to complete the project, or they could take shortcuts, which in both cases could jeopardize the project and cause the client delays and additional costs.
  • Appointing the contractor that has the skills, resources, and experience to deliver the project. Clients should not select a contractor simply because they were the cheapest.
  • Ensuring the contractor works safely. In some countries and states, the client could be held accountable for an injury on the project if it’s found that the client didn’t enforce adequate safety practices on the project.
  • Checking that the contractor delivers the correct quality through the course of the project. Where the client doesn’t have the relevant experience to monitor quality they should allocate that oversight responsibility to another suitably qualified party which could be a project manager, designer or specialist quality superintendent.
  • Not engaging in any unethical practices.
  • Fulfilling all their obligations in terms of the contract which could include; providing access to work areas in accordance with the project schedule, providing utilities (such as power and water) in the specified quantities and in accordance with the schedule, and supplying all client supplied items and services in accordance with the schedule.
  • Not removing portions of work from the contractor without due reason, which must be in terms of the contract document.
  • Not withholding approvals of the construction schedule, designs and drawings and construction samples or methods, without due reason and in accordance with the contract.
  • Ensuring that there is a construction schedule in place which allows for the project constraints, which has activities which are linked, takes cognisance of the project milestone dates, which follows the agreed construction methodology and one which is achievable. This schedule should be regularly updated and the contractor should be advised to take action to rectify schedule slippage when it is detected.
  • Ensuring they have appropriate expectations for the project and that the project team and contractor understand these expectations and are capable of meeting them. Sometimes clients have unreasonable expectations, they fail to communicate their expectations properly, or they select a team that isn’t capable of delivering the desired result.
  • Where they delegate their authority, ensuring the delegated person has the power and authority to approve invoices, variations, designs, drawings, methodologies and the standard of work.
  • Not occupy the facility unless all permits, approvals, and permissions have been received.

The contractor should ensure that the client complies with these responsibilities since often the client is inexperienced, or stands back from the project, which can result in the contractor having to undertake responsibilities for which they have not allowed. Unfortunately, sometimes the contractor has to manage the client to ensure the project is a success.

Conclusion

Clients have an important part to play in ensuring the success of their projects. They must understand and fulfill their contractual obligations (which may be explicit or implied). Contractors must ensure that their clients fulfill their obligations. Many of the problems we encounter on projects such as; contractual disputes, poor quality, late completion and inadequate safety are attributable to the client’s actions, or in some cases their lack of action.

The success of construction projects depends on teamwork and open and honest communications and the client can play an important role in fostering these conditions. Often it’s the client’s actions which set the tone of the project, and it’s the client’s actions which the rest of the team follows.

Has one of your projects failed because the client didn’t meet their obligations?

Author: Paul Netscher

Paul Netscher is an experienced construction professional who managed over 120 projects in 6 countries over 28 years. Paul writes for the ClockShark blog and is the author of five books on construction project management.




ClockShark is the #1 time tracking and scheduling app for construction and field service companies! To learn more check out the video below. To get a free 14-day trial visit www.clockshark.com


 

Join ten thousand companies on our insiders list and get our latest content by email before anyone else!

Your email is safe with us. We will never share it with others.