Contractor Corner Cutting Question
As most of you are probably aware, the US placement is a little different to what most of you are probably up to on site. I’m not working for a contractor per se, our role as USACE is really one of contract management, i.e. being the client’s representative on site, and making sure the contractor delivers what he’s meant to as per the (unbelievably strict) contract. This (apparently) was relatively easy during the heavy civils stage; what could possibly go wrong with concrete columns and slabs etc.? Anyway, now that the project has progressed to the close-in and fit-out stages the contractor is struggling, and has started cutting as many corners as possible whilst taking as many liberties as he can. Seemingly in an attempt to try and get the job done to the lowest possible acceptable standard (though this is doubtful at the moment).
The suspicion is that the contractor (more used to building hotels and apartments for developers rather than “weapons systems” for the government) has massively underbid on the project, and is now facing a catastrophic loss. They appear to have completely abandoned their QC plan in order to try and pull the plug and get out as quickly and painlessly (for themselves) as possible. Unfortunately the Federal government has rather large pockets (and me working for them) so it’s unlikely they’ll get far. It appears that the contractor simply wasn’t expecting the level of QA and scrutiny into every aspect of the build that USACE are now applying. Also, as a design, bid, build, project the contractor is struggling to some extent with the idea that every single change needs to be approved, rather than having the freedoms afforded by the more ‘traditional’ design and build type contracts.
I’ll break here, unfortunately, due to the sneaky-beaky nature of the site I’m working on I’m not actually allowed to take any pictures of the work I’m doing, which could be interesting with upcoming presentations and reports etc… So to keep you all interested (vaguely) and to prevent this from being just a big block of writing here are some nice architects impressions of how the fancy building I’m working on will look once it’s finish.
The US Government’s new toy
Back to the blog, here are some examples of the kind of corner cutting being taken by the contractor:
- Building block walls to the wrong specifications (including using weak mortar, and failing to install lintels above penetrations), then deliberately painting over and installing services on top of deficiencies to try and cover up the issues in the hope that they won’t be noticed. Or, they might be gambling that our QA checks will take so long to uncover the issues that we wouldn’t then order defective work to be corrected because it will have too much of an adverse impact on the rest of the project?
- Using inadequate stud walling systems, being notified of the errors, then completing the wall anyway and installing doors and services etc.. Basically a continuation of the first point!
- Running out of concrete during the pour of a footing, then instead of creating a construction joint with appropriate dowel-bar and correctly positioned re-bar, just covering it up and hoping to finish the pour the following day without us noticing!
- On a slightly different note: I walked the site with one of the contractor’s representatives in order to agree on the ‘cost of work done to date’ so that payment could be made for the months work. The whole process took about three to four hours; we came to schedule/percentage agreements on site. But when the claim was subsequently submitted the figures in a number of key areas had been adjusted in their favour; which I found quite insulting. I know this isn’t quite the same as producing sub-standard work and trying to cover it up, but it does none-the less seem to be symptomatic and consistent with poor practices at the management level?
Some of the issues are quite innocuous, but others are more serious. If the contractor was allowed to get away with everything he’s tried then a truly sub-standard building would be delivered at the end.
My question (in many parts) to all of you working for contractors is this:
I wouldn’t expect anyone to be working for a company that is quite as blatant as this, and I know the situation is slightly different. But has anyone encountered similar issues on site from the perspective of the contractor? And if so what did you/the company do about it? Also, in this particular instance the (contractor’s) QC manager is in the process of losing his job, and whilst there has undoubtedly been a complete failure of their QC process, I believe he is something of a fall-guy for managerial failures elsewhere in the company. Has anyone encountered any other particular drivers of bad performance on site?
Holdfast Training Services Trial Blog 
Kukie,
Interesting issues. How are these issues being tracked – non conformance reports?
Was the contractor new to USACE, have these sorts of problems occurred before? What plans are in place to ensure the desired level of quality is achieved while adhering to programme timelines? You said the contract was unbelievably strict – was this problem of meeting time, cost and quality requirements always going to occur?
Interesting. I echo Damian’s thought that, if it was set up to fail don’t be surprised when it does but do wonder what was expected and how this was intended to be dealt with. With regard to your specific examples: Presumably the requirement to paint the block wall and the location of the services on it was part of the design, so set by others not the contractor trying to hide his work, even if the wall itself is substandard? The stud wall: it is, of course, possible that the material and programming of works had all been set in train before the notification of deficiency could put it on hold. You don’t wait until one thing is complete before initiating the next if you’re working to a tight time frame and trying to clear site… The concrete in the footing is harder to find a plausible excuse for but the ultimate is the deliberate attempt at fraudulent claim of works complete which could only be attempted through an apology and explanation that this was his estimate made prior to agreement and the wrong figures were used honest gov. I suspect reality is that that you have a struggling contractor in a system that doesn’t have much scope for sensible dialogue and compromised solutions rather than silly contractual point scoring and claims. There is an interesting think piece in here about how you achieve the best product that can be delivered for a sensible price in a sustainable manner (i.e. no one goes bankrupt) is it through rigid process and court action or negotiated compromise…
Kukie,
I have had two contractors on site recently, both providing me with a concrete product (retaining wall and bored piles). I have found a dichotomy between the two and will briefly explain how I have dealt with these.
Firstly the bad. Any questions I asked the contractor about concrete seemed to be met with smart-arse remarks and a bit of jeering, however it was quite apparent they didn’t know the difference between concrete and their mother’s cake mix. The more questions I asked, the more worried I got and the more annoyed the Sub-contractor got. As they weren’t satisfying me that they knew their responsibilities for QC/QA and more importantly why they were checking certain things, I or another Engineer on site would stand over them. After making them redo QC/QA and submitting NCRs, they quickly realised they couldn’t skip corners and needed to educate themselves pretty quickly. They now hate it when I pick them up for any failings and the quality they are producing is on the up.
Now the good. I started asking similar questions and was met with sufficient answers and patience on behalf of the sub-contractor. This sub-contractor had also let out their QC/QA to a third party lab, which obviously takes some of the pressure off of them. I conducted a brief assessment of their plans for QC and felt they were sufficient. I still conduct spot checks to keep them honest, but I am always met with a good answer and physical record keeping.
I believe you know when something is going wrong or should be done differently, don’t be afraid of annoying a sub-contractor about their QC because a good one won’t mind as they will already have done it themselves or at least be able to provide you with the time to do it.
Cookie
The QS side of the house really does not surprise me and would be par for the course for all of us. Substantially different payment claims from our sub contractors… To the extent that I have travelled 4 hrs (each way)to Bridlington (in East Yorkshire) to confirm the types and quantities of steel in a sub contractor’s yard.
As for the QA side – maybe not quite as blatant but certainly not unusual. We are having real issues with a reputable contractor BBGE (Balfour Beatty Ground Engineering) who routinely try to pull the wool. When we query a particular issue and post the question generally a non conformity report is issued.
Finally, you are not alone in a more hands off role – looks like we are headed that way. Fred seems to be one of the few really in the thick of it with a Principal Contractor role.
Thanks for your responses, in answer to some of the specific points raised:
There is an extremely robust deficiency reporting process, which should by carried out by the PC in the first instance, then by USACE when/if this fails. So far this has ticked along, but now it’s getting to the point where there are almost too many to realistically manage and we end up reaching some sort of compromise. It appears that the PC’s strategy moving forwards is to ‘gamble’ on what he can get away, whilst pushing the limits and re-doing or paying for what he can’t.
Digging deeper the PC underbid the ‘Independent Government Estimate’ by about $24m or 10%, so it’s no wonder that they are now struggling and looking for the best way out. The client (understandably), still expects a $274m product for the $240m contract price and will not budge on the specification.
With regards to the example of painting over or covering up deficient work. Yes, this work is in the specification and needs to be completed. The issue is that the PC is now regularly breaking the contract by carrying out follow-on work before it can be inspected and approved by USACE. In some cases deficient work is deliberately covered up, and as mentioned earlier it seems that the PC is ‘gambling’ in the hope that eventually the government will get bored or tired and allow the sub-standard work to stand. You are right that the PC is frustrated with the government, and the contract, and the apparent slowness of the process. His position is certainly that the government is being unreasonable and that all would be well if we didn’t check anything and they could just get on and build as they liked. Unfortunately it’s a design, bid, build contract for a reason.
This PC has worked on this site before, but it was as part of a joint bid for a much bigger, but simpler building (a big steel box full or computers), which was procured via a more flexible design & build contract. The contractor performed well on this build, and therefore should be used to the vagaries of working for the government in this environment.
Agreed, it all comes down to obtaining the best possible product within the timeframe without completely grinding the PC into the ground. The relationship has deteriorated recently, so it will be very interesting to see just how far the government are prepared to go in terms of enforcing the contract. As mentioned they see it as a “weapons system” so my instinct is that they won’t compromise much if at all!