What Are General Conditions In A Construction Budget?

Read 4 min

When embarking on a construction project, establishing a robust budget is crucial for ensuring financial stability and project success. In this blog, we’ll explore how to create a detailed construction budget, highlighting key considerations and offering practical advice to ensure you can sleep well at night, knowing your project is financially sound.

Important Factors to Consider Before Starting a Construction Project

Before diving into budget creation, it’s essential to have a comprehensive pre-construction plan. For me, this means ensuring that we have a complete design, conduct constructability reviews, have a workable plan, and a realistic schedule. Crucially, it also involves developing a budget that aligns with these elements and devising a profitability strategy. This preparation is not about being complacent but about having a clear path forward.

Key Reminders for Project Managers

Project managers need to be vigilant throughout the budgeting process. Ensure every cost bucket is accounted for and that the budget is transparent and understandable to all stakeholders. For those not fully immersed in professional estimation, budgeting can seem daunting. The goal is to demystify the process by creating a clear Basis of Estimate, making accurate assumptions, and involving the entire team. Project managers should facilitate team reviews, check numbers, and ensure proper documentation.

Important Reminders for Superintendents

Superintendents play a critical role in understanding and managing the budget. They need to be well-versed in the schedule and budget, especially in areas such as general conditions and requirements. Communication with the estimating team is vital to ensure that all indirect costs and necessary elements are included in the budget. For example, in a Tucson, Arizona project, we needed to account for additional costs associated with a canopy over a loading dock. Identifying and quantifying such costs early on is essential to avoid surprises later.

How to Create a Construction Budget

Creating a budget involves a systematic process that incorporates various factors to ensure financial accuracy and control. Here’s a step-by-step guide:

  1. Define the Project Scope

Start by clearly defining and breaking down the project scope. Ensure that everyone involved understands the design intent, drawings, and planning documents. This includes preparing a Basis of Estimate and Schedule, including logistics maps, zoning maps, and other relevant information.

  1. Gather Project Information

Collecting the right project information is crucial. This includes project documents, specifications, soils reports, and any relevant data from surrounding sites. Leverage experience and consult with experts if necessary to gather comprehensive information. Accurate data is key for reliable estimation.

  1. Identify Project Phases

Understand and identify different phases of the project. This helps in estimating labor, materials, equipment, and timelines for each phase. Whether the project is phased by completion or geographical area, accurate phase identification is crucial for precise budgeting.

  1. Estimate Costs for Each Phase

Develop detailed estimates for each project phase. Don’t rely solely on trade partner estimates without validating them through control estimates. Ensure that your budget includes labor, materials, equipment, subcontractor costs, allowances, and contingencies. Consider inflation and escalation factors and ensure transparency in your budget format.

  1. Review and Refine the Budget

Regularly review and refine the budget. Engage the project team, including project managers and superintendents, to scrutinize and validate the budget. Ensure that the budget is realistic and covers all necessary aspects. If there are risks of going over budget, communicate this to the company and consider drawing from contingency funds.

  1. Monitor and Update

Budget management doesn’t stop once it’s set. Regularly monitor and update the budget throughout the project. I recommend monthly reviews by the project manager and superintendent to ensure adherence to budgetary practices and to address any emerging issues promptly.

Conclusion

A well-prepared budget is a cornerstone of a successful construction project. By following these steps—defining the project scope, gathering accurate information, identifying phases, estimating costs, and continuously monitoring—the project team can maintain financial control and ensure project success.

If you want to learn more we have:

-Takt Virtual Training: (Click here)
-Check out our Youtube channel for more info: (Click here) 
-Listen to the Elevate Construction podcast: (Click here) 
-Check out our training programs and certifications: (Click here)
-The Takt Book: (Click here)

Discover Jason’s Expertise:

Meet Jason Schroeder, the driving force behind Elevate Construction IST. As the company’s owner and principal consultant, he’s dedicated to taking construction to new heights. With a wealth of industry experience, he’s crafted the Field Engineer Boot Camp and Superintendent Boot Camp – intensive training programs engineered to cultivate top-tier leaders capable of steering their teams towards success. Jason’s vision? To expand his training initiatives across the nation, empowering construction firms to soar to unprecedented levels of excellence.

On we go!

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How To Mitigate Financial Risk In Construction

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Mitigating financial risks in construction is a lot like playing Monopoly. And if you’re like me, you love Monopoly. So, how do you approach financial projections and make them as fun as possible? Let me take you through my approach and explain what to look out for.

Embracing Financial Responsibility in Construction

To start, I’ll be honest—much of my career was spent avoiding the financial aspects of construction. I used to think, “Let the PM worry about that, I’ll focus on building.” However, I soon realized that this mindset wasn’t accurate. It’s crucial for superintendents and project managers (PMs) to collaborate and strategize about finances together, using key tactics to ensure that profit targets are met. In this blog, I’ll outline my general approach. If your company has a system that allows you to track financial data clearly, you can make it not just manageable, but also engaging.

My Journey in Understanding Construction Finances

There was a turning point in my career when I grabbed the PM and said, “I want to understand everything—gross profit, net profit, contingency calculations, and more.” I expected that everyone else had a handle on this, but as I asked more questions, I started getting responses like, “Oh, we don’t track it that way,” or “We haven’t finalized that number yet.” I quickly realized that we were in a chaotic situation. If you’re not a financial expert, don’t worry! If something doesn’t make sense to you, chances are it doesn’t make sense to the “experts” either. In fact, every company should have financial data that’s so clear, even a teenager could understand it. If your numbers don’t add up in a straightforward way, then you likely don’t have the right data.

Monopoly and Risk Mitigation

One day, I was playing Monopoly with my kids. I have 11 children, all of whom enjoy playing Monopoly with me. While playing, I realized some key insights into the game, which also apply to financial management in construction. The trick lies in organizing your cash and properties. In Monopoly, if you know how much money you have and where your assets are, you can make smarter decisions. The same goes for managing financial risk in construction.

Monitoring Your Financial Health

In construction, as in Monopoly, you need to know three things:
  1. How much money is coming in (from pay applications).
  2. How much money you have on hand.
  3. How much money is at risk of going out.
Understanding these factors allows you to “play the game” and mitigate financial risks effectively. You can’t make informed decisions without seeing the full picture.

The Definition of Mitigating Risk

Mitigating risks means making them less harsh or severe. In construction, this requires identifying and tracking risks and opportunities. Anchoring to historical data can help, but managing the budget and numbers in real time is key.

Managing Subcontractor Budgets

One of the most critical aspects of financial management is keeping an eye on subcontractor budgets. Your financial projections should clearly show:
  • The original target for each subcontract.
  • The current status of these contracts, including any contingency funds.
Monitoring these projections helps you manage risks, especially when you’re working with tight margins.

What to Include in Your Financial Projection Sheet

In your projections, you should be tracking:
  • Subcontractor budgets and contingencies.
  • Labor gains from staff and general requirements.
  • Gains on bonds, insurance, and equipment rentals.
These elements provide a comprehensive view of the project’s financial health. They also allow you to make strategic decisions, such as whether to reduce costs or allocate more resources.

Strategic Decision-Making

Sometimes, managing finances means making tough decisions, like whether to keep additional staff on a project or rent equipment for longer than planned. For instance, I once had to decide whether to extend a crane rental by six weeks. We were renting the crane from ourselves, and while there were no shared savings, keeping the crane simplified our logistics and benefitted us financially.

Final Thoughts

To mitigate financial risks in construction, you need to understand the numbers. Ask the right questions, track your financial projections carefully, and always aim to see the full picture. This blog provides insights into mitigating financial risks in construction. By embracing financial data and using the right strategies, you can ensure your project remains on track and profitable.

If you want to learn more we have:

-Takt Virtual Training: (Click here)
-Check out our Youtube channel for more info: (Click here) 
-Listen to the Elevate Construction podcast: (Click here) 
-Check out our training programs and certifications: (Click here)
-The Takt Book: (Click here)

Discover Jason’s Expertise:

Meet Jason Schroeder, the driving force behind Elevate Construction IST. As the company’s owner and principal consultant, he’s dedicated to taking construction to new heights. With a wealth of industry experience, he’s crafted the Field Engineer Boot Camp and Superintendent Boot Camp – intensive training programs engineered to cultivate top-tier leaders capable of steering their teams towards success. Jason’s vision? To expand his training initiatives across the nation, empowering construction firms to soar to unprecedented levels of excellence.

On we go!

Posted in All

How Do You Demonstrate Leadership To Your Team?

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How do you demonstrate leadership to your team? We often hear the debate about leadership versus management. However, the reality is that you need both. In this blog, we’re going to discuss what leadership is, why management remains important, and how you can use both to uplift your team. So, stay with us as we dive into the core of leadership and management.

Leadership vs. Management: Why Both Are Essential

There’s a common misconception that leadership is good while management is less desirable. People might say, “We need leaders, not managers,” or “Managers are just there to micromanage.” The truth is, neither leadership nor management can work alone. Both are essential for team success. A powerful concept I learned from Lauren Outwell at Petticoat Smith, which he adopted from the EOS system by Gino Wickman, is this: LMA—Leadership + Management = Accountability. This equation perfectly illustrates why you need both leadership and management to hold people accountable. Leadership is about making people better so that, in your absence, they can thrive. On the other hand, management ensures that processes, systems, and resources are properly handled. You need managers to oversee these operational elements. The balance between leadership and management is critical for creating an accountable and high-performing team.

How Leadership and Management Work Together

When you lead, you elevate your people. Leadership is about building, not using people. In contrast, management is essential for running processes, systems, and structures. The key to success is aligning leadership with management to ensure that your team has the resources, guidance, and motivation to succeed. If you don’t lead your people while managing the necessary systems and resources, accountability becomes impossible. You cannot hold someone accountable if you haven’t provided them with clear direction, the right resources, or the motivation to meet expectations. Remember: Leadership + Management = Accountability.

The Skills of a Good Leader

One of the most important skills of a good leader is listening. It may sound cliché, but research consistently shows that effective leadership starts with listening and caring. Classical management often disconnects leaders from the people on the ground, leading to communication gaps and misaligned goals. Good leaders listen to their teams, invest in their success, and make decisions that support their growth.

Setting High Expectations Without Undermining Your Team

Expecting great things from your team is essential, but you must also resource them properly. High expectations combined with poor treatment won’t make you a good leader—it’ll just make you a demanding boss. To truly inspire your team, provide them with training, support, connection, and a strong culture. As a leader, you should focus on creating psychological safety, fostering innovation, and setting collaborative goals. Motivating your team, leading transformations, and helping people develop their careers are just as important as managing processes and resources.

Key Management Tasks

While leadership is crucial for motivating and inspiring, management handles essential operational tasks such as performance oversight, risk management, compliance, and resource allocation. Managing change, ensuring health and safety, and solving problems are all part of management’s role in supporting the team.

Accountability and Support

You cannot expect accountability without offering both leadership and management. Think of it this way: could you hold someone accountable if they lacked the tools, resources, motivation, and leadership to succeed? No. You need to provide both leadership and management for accountability to exist. Throughout my career, I’ve realized the importance of assessing my own leadership and management efforts before pointing fingers at others. Often, a failure to lead or manage effectively lies at the root of team shortcomings. It’s crucial to reflect on your role and ask, “Have I provided the clarity and support my team needs?”

A Final Analogy: The Elephant, the Rider, and the Path

In the book Switch, the authors use an analogy to explain leadership and management: the elephant, the rider, and the path. The rider represents leadership, steering and guiding the elephant (your team), while the path represents the circumstances and resources provided by management. To move forward, you need all three—the leader must direct, the team must be motivated, and the resources must be in place.

Conclusion: Embrace Both Leadership and Management

To become a truly effective leader or manager, you need to balance both roles. Inspire and build your people, but also provide the support structures they need. Only then can you hold them accountable and achieve great results as a team.

If you want to learn more we have:

-Takt Virtual Training: (Click here)
-Check out our Youtube channel for more info: (Click here) 
-Listen to the Elevate Construction podcast: (Click here) 
-Check out our training programs and certifications: (Click here)
-The Takt Book: (Click here)

Discover Jason’s Expertise:

Meet Jason Schroeder, the driving force behind Elevate Construction IST. As the company’s owner and principal consultant, he’s dedicated to taking construction to new heights. With a wealth of industry experience, he’s crafted the Field Engineer Boot Camp and Superintendent Boot Camp – intensive training programs engineered to cultivate top-tier leaders capable of steering their teams towards success. Jason’s vision? To expand his training initiatives across the nation, empowering construction firms to soar to unprecedented levels of excellence.

On we go!

Posted in All

Who Are The Members Of A Construction Team?

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Who Are the Members of a Construction Team? Building a construction team should always be a top priority when starting any project. But who exactly should be part of that team? In this blog, we’ll explore the essential team members, their roles, and how to ensure a balanced, effective mix of skills to create an amazing construction team. Let’s dive in.

Importance of Building Your Team Properly in Construction

The success of any construction project depends on building the right team—not just filling positions but selecting the right people for each role. While some might say that titles and roles don’t matter, I beg to differ. Constructing a cohesive team is essential, and I take it seriously, using all available tools to ensure every project starts on the right foot. Many people overlook the need for a well-defined organizational chart. It’s not just about hierarchy; it’s about accountability. As Gino Wickman outlines in Traction and the Entrepreneurial Operating System, a proper org chart clearly defines accountability within the team. Having each team member understand and articulate what is expected of them is critical to avoid confusion and maximize efficiency.

Importance of Having Structure & Maintaining Accountability

Having a well-structured accountability chart goes beyond assigning roles. It fosters accountability and ensures that everyone on the project understands what they are responsible for. Whether you’re a project manager, engineer, or superintendent, knowing your tasks and responsibilities is key. A well-prepared accountability chart ensures that roles are defined, specific, and clear.

Key People to Have in a Construction Team

To run a successful project, you need to have the right mix of people who work well together. One of the most important roles is that of the master builder, often the superintendent or project manager. A master builder with experience and a loyal team can make or break a project. Building trust and camaraderie within the team is essential for smooth collaboration and project success. In addition to the master builder, it’s important to ensure that everyone on the team is the right fit, both in terms of skill set and company culture. As Jim Collins outlines in his book Good to Great, you need the right people in the right seats on the bus. Merely filling roles won’t cut it; you need to make sure that team members are both qualified and aligned with your project’s culture and values.

Important Reminder When Choosing People for a Construction Team

You can’t just throw people into roles and expect them to work well together. It’s critical to carefully select team members who are not only competent in their field but also have a history of working well together. A core group that has collaborated successfully in the past will be essential to your project’s success.

The Roles in a Construction Team

  1. Project Director/Executive: The project executive oversees the entire project, ensuring that the right resources are in place. They’re responsible for ensuring a smooth process from pre-construction to closeout and warranty periods. A successful project executive brokers the right resources, training, and consulting for the team.
  2. General Superintendent: Often the master builder, the general superintendent is the boots-on-the-ground leader. They hold the team accountable and ensure the project is carried out with excellence. They are also instrumental in training and guiding the team to success.
  3. Project Manager: The project manager is responsible for managing every aspect of the project, from budget and schedule to quality and safety. They ensure the team has everything it needs to deliver the project on time and within budget.
  4. Project Superintendent: The project superintendent ensures that every phase of the project is planned and executed smoothly. They work with assistant superintendents and foremen to make sure that all aspects of the project are coordinated.
  5. Assistant Project Managers & Superintendents: These team members handle the short-term execution of tasks. They ensure that each phase is ready to be executed, working closely with the project superintendent to maintain safety and quality on the job site.
  6. Project & Field Engineers: Project engineers manage everything related to procurement, technology, and project management. Field engineers work in the field to ensure that everything is in place for the trade partners to perform their tasks. Both roles are vital for the smooth functioning of the project.
  7. Foremen & Workers: Foremen lead the work crews in the field, planning and executing short-term tasks. The expertise of the workers and foremen is what ultimately brings the project to life. Every role on the team exists to support the foremen and workers in their efforts to build the project successfully.

Final Advice for Building a Successful Construction Team

To build a successful construction team, ensure that you have the right people in the right roles. Consider the working dynamics of your team, and be mindful of the different types of working geniuses each person brings to the table. As outlined in The Six Types of Working Genius, matching team members based on their skills and working styles can enhance your team’s performance and cohesion. At the end of the day, if you’ve built a team with strong leaders, cohesive collaboration, and clear roles, you’re well on your way to creating a killer team for your construction project.

If you want to learn more we have:

-Takt Virtual Training: (Click here)
-Check out our Youtube channel for more info: (Click here) 
-Listen to the Elevate Construction podcast: (Click here) 
-Check out our training programs and certifications: (Click here)
-The Takt Book: (Click here)

Discover Jason’s Expertise:

Meet Jason Schroeder, the driving force behind Elevate Construction IST. As the company’s owner and principal consultant, he’s dedicated to taking construction to new heights. With a wealth of industry experience, he’s crafted the Field Engineer Boot Camp and Superintendent Boot Camp – intensive training programs engineered to cultivate top-tier leaders capable of steering their teams towards success. Jason’s vision? To expand his training initiatives across the nation, empowering construction firms to soar to unprecedented levels of excellence.

On we go!

Posted in All

How To Create A Construction Budget

Read 4 min

When embarking on a construction project, establishing a robust budget is crucial for ensuring financial stability and project success. In this blog, we’ll explore how to create a detailed construction budget, highlighting key considerations and offering practical advice to ensure you can sleep well at night, knowing your project is financially sound.

Important Factors to Consider Before Starting a Construction Project

Before diving into budget creation, it’s essential to have a comprehensive pre-construction plan. For me, this means ensuring that we have a complete design, conduct constructability reviews, have a workable plan, and a realistic schedule. Crucially, it also involves developing a budget that aligns with these elements and devising a profitability strategy. This preparation is not about being complacent but about having a clear path forward.

Key Reminders for Project Managers

Project managers need to be vigilant throughout the budgeting process. Ensure every cost bucket is accounted for and that the budget is transparent and understandable to all stakeholders. For those not fully immersed in professional estimation, budgeting can seem daunting. The goal is to demystify the process by creating a clear Basis of Estimate, making accurate assumptions, and involving the entire team. Project managers should facilitate team reviews, check numbers, and ensure proper documentation.

Important Reminders for Superintendents

Superintendents play a critical role in understanding and managing the budget. They need to be well-versed in the schedule and budget, especially in areas such as general conditions and requirements. Communication with the estimating team is vital to ensure that all indirect costs and necessary elements are included in the budget. For example, in a Tucson, Arizona project, we needed to account for additional costs associated with a canopy over a loading dock. Identifying and quantifying such costs early on is essential to avoid surprises later.

How to Create a Construction Budget

Creating a budget involves a systematic process that incorporates various factors to ensure financial accuracy and control. Here’s a step-by-step guide:

  1. Define the Project Scope

Start by clearly defining and breaking down the project scope. Ensure that everyone involved understands the design intent, drawings, and planning documents. This includes preparing a Basis of Estimate and Schedule, including logistics maps, zoning maps, and other relevant information.

  1. Gather Project Information

Collecting the right project information is crucial. This includes project documents, specifications, soils reports, and any relevant data from surrounding sites. Leverage experience and consult with experts if necessary to gather comprehensive information. Accurate data is key for reliable estimation.

  1. Identify Project Phases

Understand and identify different phases of the project. This helps in estimating labor, materials, equipment, and timelines for each phase. Whether the project is phased by completion or geographical area, accurate phase identification is crucial for precise budgeting.

  1. Estimate Costs for Each Phase

Develop detailed estimates for each project phase. Don’t rely solely on trade partner estimates without validating them through control estimates. Ensure that your budget includes labor, materials, equipment, subcontractor costs, allowances, and contingencies. Consider inflation and escalation factors and ensure transparency in your budget format.

  1. Review and Refine the Budget

Regularly review and refine the budget. Engage the project team, including project managers and superintendents, to scrutinize and validate the budget. Ensure that the budget is realistic and covers all necessary aspects. If there are risks of going over budget, communicate this to the company and consider drawing from contingency funds.

  1. Monitor and Update

Budget management doesn’t stop once it’s set. Regularly monitor and update the budget throughout the project. I recommend monthly reviews by the project manager and superintendent to ensure adherence to budgetary practices and to address any emerging issues promptly.

Conclusion

A well-prepared budget is a cornerstone of a successful construction project. By following these steps—defining the project scope, gathering accurate information, identifying phases, estimating costs, and continuously monitoring—the project team can maintain financial control and ensure project success.

If you want to learn more we have:

-Takt Virtual Training: (Click here)
-Check out our Youtube channel for more info: (Click here) 
-Listen to the Elevate Construction podcast: (Click here) 
-Check out our training programs and certifications: (Click here)
-The Takt Book: (Click here)

Discover Jason’s Expertise:

Meet Jason Schroeder, the driving force behind Elevate Construction IST. As the company’s owner and principal consultant, he’s dedicated to taking construction to new heights. With a wealth of industry experience, he’s crafted the Field Engineer Boot Camp and Superintendent Boot Camp – intensive training programs engineered to cultivate top-tier leaders capable of steering their teams towards success. Jason’s vision? To expand his training initiatives across the nation, empowering construction firms to soar to unprecedented levels of excellence.

On we go!

Posted in All

What Is A Time And Materials Contract?

Read 4 min

Time and materials (T&M) contracts are a prevalent approach in construction and various project-based industries, especially when the scope is uncertain and a fixed price is challenging to determine. If you often interact with T&M work authorizations and are looking for insights on managing this process, you’ve come to the right place. In this blog, we will delve into what a T&M contract is, its key features, and practical tips for effective management.

What is a Time and Materials Contract?

A Time and Materials (T&M) contract is a type of agreement where the client pays the contractor based on the hours worked and the materials used for a project. This contract type is typically utilized when the project’s scope is ambiguous or likely to change, making it difficult to establish a fixed price upfront.

Key Features of a T&M Contract

  1. Hourly Rates

In a T&M contract, the contractor will set hourly rates or wage rates at the outset of the project when establishing the agreement. These standard rates apply to various positions, and it’s crucial to adhere to these agreed-upon rates when billing for labor hours.

  1. Material Costs

The client reimburses the contractor for material costs, which can include supplies, equipment, and other tangible items. To ensure transparency and fairness, backup documentation is often required. It’s essential to source materials cost-effectively and provide quotes if necessary to avoid excessive hours spent on procurement.

  1. Flexibility

A significant advantage of T&M contracts is their flexibility. They accommodate changes in project scope and unforeseen conditions, allowing the work to progress despite variations. This flexibility can be particularly beneficial in dynamic project environments.

  1. Risk Allocation

In T&M contracts, the client bears the risk. If the project takes longer or requires more materials than initially anticipated, the client is responsible for covering these additional costs. This risk must be factored into the budget to handle potential overruns effectively.

  1. High Level of Transparency

Transparency is crucial in T&M contracts. Both the client and contractor must maintain clear communication regarding the progress, labor hours, and material usage. Detailed documentation and regular updates are essential to ensure everyone is aligned and aware of the project’s status.

Best Practices for Managing T&M Contracts

  1. Establish Clear Communication

Effective communication channels are vital for the successful management of T&M contracts. Ensure that discussions and updates are handled in real-time, with accurate documentation and prompt problem resolution.

  1. Avoid Wasting Time

Be mindful of time management when tracking hours and materials. Excessive effort spent on obtaining multiple quotes or extensive documentation can detract from actual work. Ensure that documentation requirements are reasonable and do not impede project progress.

  1. Verify Tickets Daily

To avoid disputes and inaccuracies, verify T&M tickets daily. Signing off on tickets promptly ensures that labor hours and material costs are accurate and agreed upon in real-time, reducing the likelihood of discrepancies later.

  1. Address Common Problems

Several issues can arise with T&M contracts, including cost overruns, lack of cost certainty, limited contractor accountability, increased scope, and incentivized inefficiency. Being aware of these potential risks helps in developing strategies to manage them effectively.

  1. Refine the Process

Continuously refine the T&M process to ensure it works well for both parties. Regularly review and adapt communication methods, documentation standards, and payment procedures to enhance efficiency and accuracy throughout the project.

  1. Ensure Timely Payments

To maintain a smooth workflow, ensure that payments for T&M work are processed promptly. Avoid accumulating multiple months of tickets before seeking payment, as this can lead to disputes and delays. Implement a streamlined payment process for better financial management.

Conclusion

Managing a Time and Materials contract effectively requires understanding its features, potential risks, and best practices. Clear communication, regular verification, and a structured approach to documentation and payments are key to successful project management.

If you want to learn more we have:

-Takt Virtual Training: (Click here)
-Check out our Youtube channel for more info: (Click here) 
-Listen to the Elevate Construction podcast: (Click here) 
-Check out our training programs and certifications: (Click here)
-The Takt Book: (Click here)

Discover Jason’s Expertise:

Meet Jason Schroeder, the driving force behind Elevate Construction IST. As the company’s owner and principal consultant, he’s dedicated to taking construction to new heights. With a wealth of industry experience, he’s crafted the Field Engineer Boot Camp and Superintendent Boot Camp – intensive training programs engineered to cultivate top-tier leaders capable of steering their teams towards success. Jason’s vision? To expand his training initiatives across the nation, empowering construction firms to soar to unprecedented levels of excellence.

On we go!

Posted in All

What Is A GMP In Construction Management?

Read 5 min

In construction management, The GMP sets a financial ceiling for the project, providing a clear target for the maximum cost that the owner will be responsible for. Understanding and effectively utilizing GMP can be a game-changer in managing construction projects. In this blog, we will delve into what GMP is, how it can be used to your advantage, and why it’s essential for your project’s success.

What Is GMP in Construction Management?

GMP stands for Guaranteed Maximum Price. It’s a contractual arrangement that establishes a cap on the total cost of a construction project. This means the general contractor agrees not to exceed this maximum amount. GMP contracts are commonly used in design-build and Construction Manager at Risk (CMAR) delivery methods to offer owners some level of cost certainty.

While GMP might sound like typical project management jargon, its importance cannot be overstated. It provides a financial target and a framework for cost control throughout the project life cycle. Let’s break down the core elements of GMP and how they impact construction management.

The Purpose of GMP in Construction

  1. Cost Cap: The GMP sets a maximum cost for the project, covering labor, materials, and profit. This cap ensures that the owner will not pay more than this amount, providing a level of cost certainty.
  2. Cost Control: The general contractor is responsible for managing the project budget to stay at or below the GMP. This requires diligent cost monitoring and management to prevent overruns.
  3. Shared Savings and Overruns: Some GMP contracts include a shared savings clause, meaning any savings below the GMP can be shared between the owner and the contractor. Conversely, overruns are typically the contractor’s responsibility.

Advantages of Knowing GMP During Pre-Construction

One of the key benefits of GMP is its impact on the pre-construction phase. Unlike traditional methods where a contractor is selected after the design is complete, a GMP contract allows general contractors and trade partners to be involved from the start. This involvement enables:

  • Design Alignment: Contractors can help shape the design to ensure it aligns with the GMP target, preventing surprises later in the project.
  • Budget Accuracy: Early involvement helps in setting a realistic budget that reflects the actual cost of the project, including all necessary general conditions and requirements.
  • Schedule Coordination: Having a clear GMP target helps in developing a schedule that matches the budget, ensuring that time and cost are in sync.

Handling Change Orders within GMP

Once a GMP is established, any changes to the project scope typically require a change order. This can adjust the GMP to accommodate new requirements or extend the project schedule. However, many contracts include provisions to handle change orders within the existing budget and contingency plans, minimizing the need to amend the GMP.

Key Steps to Establish a Proper GMP

To successfully establish and manage a GMP, consider these six essential steps:

  1. Proposal Phase: During initial proposals or interviews, discuss your conceptual estimating abilities, schedule, and project approach. These early discussions help in setting a realistic GMP.
  2. Build the Team and Set Parameters: Assemble a team comprising the owner, design team, engineering team, and key project personnel. Establish clear parameters and ensure that the budget reflects all project requirements from the start.
  3. Adapt to and Enable the Design Team: Provide real-time feedback on budget and schedule as the design evolves. This helps in maintaining alignment with the GMP target and avoids costly surprises.
  4. Develop a Plan with the Owners and Design Team: Confirm that the project plan, schedule, and budget align with the GMP target. Ensure all key stakeholders are on board with the plan.
  5. Finalize Planning Documents: Complete and communicate all planning documents, including schedules, logistics, and construction drawings. This ensures that the GMP is based on a well-defined and communicated plan.
  6. Monitor and Communicate: Throughout the project, continuously monitor the schedule, constructability, and budget. Maintain clear communication with all parties to stay aligned with the GMP.

The Key to Successful Construction Project Management

Incorporating GMP into your project management strategy allows for strategic planning, precise budgeting, and effective cost control. It provides a target that helps in validating the project plan and managing it within the set financial parameters. By integrating good communication and partnering with the design team and owners, you can hit the GMP target with minimal surprises.

Onward to successful projects!

If you want to learn more we have:

-Takt Virtual Training: (Click here)
-Check out our Youtube channel for more info: (Click here) 
-Listen to the Elevate Construction podcast: (Click here) 
-Check out our training programs and certifications: (Click here)
-The Takt Book: (Click here)

Discover Jason’s Expertise:

Meet Jason Schroeder, the driving force behind Elevate Construction IST. As the company’s owner and principal consultant, he’s dedicated to taking construction to new heights. With a wealth of industry experience, he’s crafted the Field Engineer Boot Camp and Superintendent Boot Camp – intensive training programs engineered to cultivate top-tier leaders capable of steering their teams towards success. Jason’s vision? To expand his training initiatives across the nation, empowering construction firms to soar to unprecedented levels of excellence.

On we go!

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How To Do Construction Submittals

Read 5 min

Construction submittals can often feel like a monotonous and frustrating part of the construction process. However, when managed effectively, they can be an invaluable tool for ensuring that project plans and materials align with the contract documents. In this blog, I’ll walk you through the best practices for creating, managing, and reviewing submittals, and provide a checklist to make this process as smooth as possible.

What Are Construction Submittals?

Submittals are essentially documents, drawings, mock-ups, or samples prepared by contractors and presented to designers. Their purpose is to demonstrate that the proposed materials and plans meet the requirements outlined in the contract documents. Submittals are typically driven by the specifications set forth in the project documents.

Steps for Effective Submittals

  1. Create a Submittal Schedule

Develop a detailed submittal schedule, often referred to as a submittal register. This schedule should be integrated into your overall procurement log or schedule, which includes fabrication times, delivery times, and material inventory buffers. Align all these dates—from required job dates to review times—to support the ideal flow of work for your trade partners.

  1. Standardize Submittal Forms

Utilize standardized submittal forms to ensure consistency. Include essential details like project name, number, date, and any other relevant information. Consistency helps both the recipients and trade partners become familiar with the format, making the process smoother.

  1. Clearly Define Requirements

Ensure that the entire team understands the submittal requirements. Outline the formatting, content, and supporting documents needed. Make sure your trade partners are well-informed through job information policy brochures or onboarding materials.

  1. Organize the Submittal Log

Maintain a comprehensive submittal log to track each item. This can be a dedicated submittal register or part of a larger procurement log. Choose a project management software that fits your workflow to make tracking as efficient as possible.

  1. Assign Responsibilities

Designate specific teams for creating, reviewing, and approving submittals. Clear communication of these responsibilities ensures that everyone involved understands their roles and tasks.

  1. Prioritize Critical Submittals

Communicate the urgency and due dates of critical submittals clearly. Avoid overwhelming designers by staggering submissions across different scopes of work. Develop a well-structured master schedule to manage the submission flow effectively.

  1. Standardize the Review Process

Create a standardized review process to ensure consistency. Align expectations for submission and approval with both your team and the designers. Clear communication of quality expectations is crucial.

  1. Ensure Timely Reviews

Timely reviews are essential to avoid delays. Monitor all aspects of the procurement process, from the creation of submittals to their review and approval. Implement strategies such as breaking down submittals into parts and providing additional support to ensure quick reviews.

  1. Document Review Comments

Provide clear and actionable feedback on submittals. Address issues immediately if possible, but ensure that all comments are documented. Avoid using submittals to make design changes—such changes should be managed through formal processes like change orders.

  1. Communicate Required Changes Clearly

If a submittal is not approved or needs modifications, communicate the required changes explicitly. Avoid leaving the trade partners guessing about what needs to be corrected.

  1. Verify Compliance

Ensure that all submittals comply with the specifications and contract documents. It’s your responsibility to make sure that non-compliant submittals are not sent to the designers, saving their time and avoiding unnecessary back-and-forth.

Additional Tips for Effective Submittal Management

  1. Get Help When Reviewing Submittals: Learn the patterns of different types of submittals and seek help from subject matter experts if needed. This will help ensure quality reviews and expedite the process.
  2. Know When to Swarm: Understand the urgency of submittals and seek assistance from colleagues or designers if necessary. Collaborating effectively can help manage tight deadlines.
  3. Don’t Be Afraid of Parallel Reviews: Conduct parallel reviews when possible to speed up the process. Tools like Bluebeam can facilitate concurrent reviews with multiple disciplines.
  4. Avoid Designing Through Submittals: Ensure that changes are documented properly through formal processes. Avoid altering designs through the submittal process to maintain project integrity.

Conclusion

Managing construction submittals doesn’t have to be overwhelming. By following these best practices and using the checklist provided, you can streamline the process and ensure that your submittals contribute positively to the project. Remember, submittals are a crucial part of construction that, when handled well, can enhance project efficiency and success.

If you want to learn more we have:

-Takt Virtual Training: (Click here)
-Check out our Youtube channel for more info: (Click here) 
-Listen to the Elevate Construction podcast: (Click here) 
-Check out our training programs and certifications: (Click here)
-The Takt Book: (Click here)

Discover Jason’s Expertise:

Meet Jason Schroeder, the driving force behind Elevate Construction IST. As the company’s owner and principal consultant, he’s dedicated to taking construction to new heights. With a wealth of industry experience, he’s crafted the Field Engineer Boot Camp and Superintendent Boot Camp – intensive training programs engineered to cultivate top-tier leaders capable of steering their teams towards success. Jason’s vision? To expand his training initiatives across the nation, empowering construction firms to soar to unprecedented levels of excellence.

On we go!

Posted in All

How To Read A Tape Measure For Construction

Read 4 min

Welcome to our blog! Today, we’re diving into a crucial skill that every construction professional needs: reading a tape measure. You might think you’ve got this down pat, but I promise you there are some insights here that even seasoned pros might not know. Stick with me, and I’ll reveal two key tips that will save you time and prevent mistakes on the job site.

Why Tape Measure Skills Matter

Reading a tape measure correctly is fundamental in construction. As my brother Weston Wolsey from Oakland Construction always says, “A good superintendent will always have a tape measure on their person.” This piece of equipment is indispensable, whether you’re a field engineer or a seasoned contractor. To ensure you’re using it effectively, here are seven crucial things to keep in mind:

  1. Choosing the Right Tape Measure

There are various types of tape measures out there. For construction, I prefer the Stanley Fat-Max 35-foot tape measure. It’s sturdy, reliable, and provides a good balance between length and durability. 

While a 30-foot tape might suffice for most jobs, a 35-foot tape is often better for measuring between grid-lines. Remember, the key is to ensure your tape measure is in good repair and suitable for the distances you need to measure.

  1. Understanding Imperial vs. Metric Tape Measures

In the U.S., tape measures typically come in Imperial units (feet and inches). These tapes mark feet and graduated inches, with divisions into sixteenths. Familiarize yourself with these markings: the longest lines represent half inches, slightly shorter lines represent quarter inches, and so on.

 However, if you’re working on projects involving elevations or precise coordinate geometry, you may encounter decimal feet. Decimal feet use tenths, hundredths, and thousandths, and are preferred for calculations.

The U.S. is legally a metric nation, and projects for federal entities often use the metric system. It’s crucial not to mix systems—stick to one measurement system to avoid errors.

  1. Reading the End of the Tape Measure

A common misconception is that the end of the tape measure, which moves slightly, is inaccurate. In reality, it’s designed to account for this movement. The end of the tape compensates for the thickness of the metal, ensuring accurate measurements whether you’re butting the tape up against something or hooking it onto a surface.

  1. Avoiding the “Burn a Foot” Technique

Never, under any circumstances, should you “burn a foot”—a practice where people measure from a foot past the start of the tape to avoid issues with the end of the tape. This method increases the likelihood of errors, as it can lead to measurements that are a foot off. Professional tape measure users never burn a foot; they measure accurately from zero.

  1. Maintaining Your Tape Measure

Keep your tape measure clean and well-maintained. After a day on a muddy or dirty job site, wipe down your tape measure to keep it functioning smoothly. A clean tape measure is essential for accurate measurements and prolongs the life of the tool.

  1. Using the Tape Measure for Longer Distances

While a tape measure is perfect for measurements up to about 35 feet, for longer distances, consider using a measuring chain or tools like total stations and GPS. These are more suitable for distances exceeding 100 feet and offer greater accuracy for large-scale projects.

  1. The Benefits of Mastering Tape Measure Skills

Knowing how to use a tape measure correctly will enhance your ability to estimate locations, check safety requirements, and ensure quality installations. Accurate measurements are vital for the dimensional relationships of project components, from grid-lines to concrete placements.

Conclusion

By understanding these essential tips and mastering the use of your tape measure, you’ll avoid common pitfalls and improve your efficiency on the job site. Remember, the key is in the details—knowing how to read the tape, maintain it, and apply these best practices will make a significant difference in your work.

If you want to learn more we have:

-Takt Virtual Training: (Click here)
-Check out our Youtube channel for more info: (Click here) 
-Listen to the Elevate Construction podcast: (Click here) 
-Check out our training programs and certifications: (Click here)
-The Takt Book: (Click here)

Discover Jason’s Expertise:

Meet Jason Schroeder, the driving force behind Elevate Construction IST. As the company’s owner and principal consultant, he’s dedicated to taking construction to new heights. With a wealth of industry experience, he’s crafted the Field Engineer Boot Camp and Superintendent Boot Camp – intensive training programs engineered to cultivate top-tier leaders capable of steering their teams towards success. Jason’s vision? To expand his training initiatives across the nation, empowering construction firms to soar to unprecedented levels of excellence.

On we go!

Posted in All