22:26
Faizan
(January 11, 1918 - July 17, 1990) was an American aerospace engineer who worked on safety-critical systems for the U.S. Air Force. He is best known for his namesake Murphy's law, which states, "Anything that can go wrong will go wrong." Murphy regarded the law as crystallizing a key principle of defensive design, in which one should always assume worst-case scenarios.
Keeping Major Murphy's principle in mind, what are the critical steps contractors can take to get their projects off on the right foot, and bring them to a successful conclusion - keeping Murphy's Law out of the equation?
The first key to having a successful contract is to have a contract. It sounds obvious, but contractors are often induced to start the work, or perform change orders / additions to the contract, without an executed document in hand. Maybe the project owner is in a rush, "We need for you to start right away so we can be completed on time."
The contractor wants to maintain good will. They proceed in the hope that their responsiveness will pay off - and sometimes it does. There are also times when the contractor incurs costs and they are never reimbursed because the contract is never ultimately signed. There could be engineering problems, government interference or lack of funding. There are any number of reasons for things to go wrong (as our hero indicated.) And for the contractor, they are all bad.
Now let's say, there is no problem with the contract. The paperwork is signed, the work proceeds, is paid for, and the contractor is completed with a profit in hand. So is that it?
No not quite. Just like there is paperwork to get into the project, there is more to get out of it. The contractor should obtain a written acceptance of the work by the job owner (obligee).
This important document establishes a completion date for the contract and concludes a portion of the liability that is attached to all open contracts.
It will close the Performance and Payment bond if there was one. Closing the file restores the contractors unused bond capacity.
It may also be beneficial with lenders.
If nothing else, a written acceptance may be a defense when the project owner attempts to call back the contractor at a later date.
These simple procedures are basic good business practices. Contractors who win work competitively, and are paid under a lump sum contract, already face significant risks. Why invite Major Murphy to visit your project? Let him rest in peace!
Steve Golia is an experienced provider of bid and performance bonds for contractors. For more than 30 years he has specialized in solving bond problems for contractors, and helping them when others failed.
Keeping Major Murphy's principle in mind, what are the critical steps contractors can take to get their projects off on the right foot, and bring them to a successful conclusion - keeping Murphy's Law out of the equation?
The first key to having a successful contract is to have a contract. It sounds obvious, but contractors are often induced to start the work, or perform change orders / additions to the contract, without an executed document in hand. Maybe the project owner is in a rush, "We need for you to start right away so we can be completed on time."
The contractor wants to maintain good will. They proceed in the hope that their responsiveness will pay off - and sometimes it does. There are also times when the contractor incurs costs and they are never reimbursed because the contract is never ultimately signed. There could be engineering problems, government interference or lack of funding. There are any number of reasons for things to go wrong (as our hero indicated.) And for the contractor, they are all bad.
Now let's say, there is no problem with the contract. The paperwork is signed, the work proceeds, is paid for, and the contractor is completed with a profit in hand. So is that it?
No not quite. Just like there is paperwork to get into the project, there is more to get out of it. The contractor should obtain a written acceptance of the work by the job owner (obligee).
This important document establishes a completion date for the contract and concludes a portion of the liability that is attached to all open contracts.
It will close the Performance and Payment bond if there was one. Closing the file restores the contractors unused bond capacity.
It may also be beneficial with lenders.
If nothing else, a written acceptance may be a defense when the project owner attempts to call back the contractor at a later date.
These simple procedures are basic good business practices. Contractors who win work competitively, and are paid under a lump sum contract, already face significant risks. Why invite Major Murphy to visit your project? Let him rest in peace!
Steve Golia is an experienced provider of bid and performance bonds for contractors. For more than 30 years he has specialized in solving bond problems for contractors, and helping them when others failed.
Posted in: business
