Construction in Australia

Construction in Australia For every dollar spent getting the paperwork right one hundred dollars on site costs are saved.

Shout out to my newest followers! Excited to have you onboard! Fuad Abdullayev, Fritzlet Christopher, Sore Serge Henri O...
10/10/2024

Shout out to my newest followers! Excited to have you onboard! Fuad Abdullayev, Fritzlet Christopher, Sore Serge Henri Oubda, Afsal Pothuvachere, Yao Kpoto, Tiaya Brislin, Danil Le Volcan, Suresh Prajapati, Engr Muhammed Saheed, Aboubacar Mohamed Camara, Maison Technique Ebonde, Raphaël Barsinga, Aïssata Kaba, Эдил Усенбаев, Okori Samuel

Shout out to my newest followers! Excited to have you onboard! Ive just uploaded some information with a slightly differ...
08/10/2024

Shout out to my newest followers! Excited to have you onboard!
Ive just uploaded some information with a slightly different way at looking at the construction company.
Im happy sharing my experiences in both the office and site sides of construction.
Any questions, ask away

Keith
Fuad Abdullayev, Fritzlet Christopher, Sore Serge Henri Oubda, Afsal Pothuvachere, Yao Kpoto, Tiaya Brislin, Danil Le Volcan, Suresh Prajapati, Engr Muhammed Saheed, Aboubacar Mohamed Camara, Maison Technique Ebonde, Raphaël Barsinga, Aïssata Kaba, Эдил Усенбаев, Okori Samuel

THE HEART OF THE BUILDING COMPANY8. All too often the cry goes out from the company owner. We are doing fine. It is a bi...
05/10/2024

THE HEART OF THE BUILDING COMPANY
8. All too often the cry goes out from the company owner. We are doing fine. It is a bit tight right now. Cash flow is tight, but we have plenty of work ahead of us.
This is another sign of trouble because a well-run business has forecasted and allowed for cash flow. Also, it is worth noting if you lost money or mishandled the management of the previous work then doing nothing to increase the education and management of further work will simply delay, some very serious problems

THE HEART OF THE BUILDING COMPANY7. The working environment is tough at this stage. We reviewed the situation and increa...
05/10/2024

THE HEART OF THE BUILDING COMPANY
7. The working environment is tough at this stage. We reviewed the situation and increased the loan on the director’s personal assets (usually their personal house) and invested more money into the company to give it better cash flow.
This is a sure sign of big trouble. It is a sign to the manager/director that within the company things need fixing. I cannot stress enough that by investing more funds and not completely looking at structure, pricing, and the manager/director’s education and ability to control the business, moving forward will do nothing but expose the manager/director to more personal losses.

THE HEART OF THE BUILDING COMPANY6. We are taking advice from our accountant in running our company so we are getting go...
05/10/2024

THE HEART OF THE BUILDING COMPANY
6. We are taking advice from our accountant in running our company so we are getting good advice.
In general term the accounts do an ok job at the skill set that they have been taught, that is to report on the historical bookwork numbers of a company. This is done in general by taking all the historical banking information, wage records and tax information from the previous financial year.
In general, I strongly question the capacity for an accountant to understand the construction industry pricing, job quoting system, assembling the progress claims, forecasting claim dates and the sub contactors claim dates. They are also not aware of construction law as it pertains to our work. Then there is no understanding of the documents surrounding the formal contracts required for a customer contract, there is a long list of these and the manager/director needs to have a good general knowledge of them. Also, the reading of the tender documents, including all the terms and conditions of contract, and the reading and understanding of the sub-contractor’s quotation and exclusions. The effect of the sub-contractor’s payment terms will have a direct impact on cash flow including some that now want amounts up to to 100% before they start work on site.
They have very little (if any) knowledge in the back costing of construction stages and ensuring the information has been correctly supplied.
In short, the accountants rely totally on the manager/director to supply information to make decisions on, their training is historical not forecasting.
Its also worth noting that accounting as a profession is one of 10 professions that is expected to be phased out in Australia in the next 10 years. The moves to this are already well underway with the personal online tax returns and reimbursement being completed within a couple of working days.

THE HEART OF THE BUILDING COMPANY5. What are the estimators doing? They have priced ten jobs and we have not got any of ...
05/10/2024

THE HEART OF THE BUILDING COMPANY
5. What are the estimators doing? They have priced ten jobs and we have not got any of them?
The manager/director carry the responsibility for this directly. It is nothing to do with the estimator.
To be very clear the estimator uses their knowledge and experience along with the companies supplied check lists to obtain a list of quantities for materials and labour, then put the company supplied rates against them. They also obtain subcontractors quotations to enable them to assemble the main quotation. Next the company profit margin is added and the quotation is made ready. Now this should be checked and confirmed by the manager/director before the quotation is supplied to the customer.
Now the issues here are the prices you pay for your materials are directly related to the company’s purchasing history. That is the quantity of goods purchased and more importantly how long it took for the company to pay its account.
If you do not purchase a lot from a supplier and you do not pay on time you can be 10 to 20% worse off. Of special harm is the sub-contractors. It is better to operate a company obtaining a minimum of 3 subcontractors’ quotations to compare and make your selections from. A lot of time it can be a struggle getting even one quotation back. What happens if the one you get back has added a 30% bad payer tax to your quote.
Another big problem is balancing the estimated labour times with the what is going to happen with the actual times taken onsite. If the estimator allowed for all that time, you will certainly struggle to win any work. Only by education and communication between estimating, purchasing, site construction and the manager/director can the company align its pricing.
It may even be the manager/director needs to talk to the sales and marketing team to find the right market to price work on.

THE HEART OF THE BUILDING COMPANY4. The site managers favorite one is the estimators got it wrong again. They just do no...
05/10/2024

THE HEART OF THE BUILDING COMPANY
4. The site managers favorite one is the estimators got it wrong again. They just do not know what they are doing.
Well educate them and do not ever simply mark an item with “Estimator Error”.
My First challenge was heading up an estimating department on a company constructing about 200 homes a year, I started off as requested by checking the Bill OF Materials for each house type, being a stick build house, I ran a full new framing formula list.
While one of house types had been built twice before, on the third house, I received a report saying there was not enough studs. Then the next house same thing. There are not enough studs. The alarm bell goes off. The thing in common is the site manager and the framing carpentry team. Time for me to do a site visit. Firstly, all the temporary bracing was done using studs, to me extremely bad workmanship as it means the top of the brace is no more than one third of the way up towards the top plate. 30 to 40 studs were used. Then in the corners instead of using blocks every corner had an extra full-length stud, another 30 to 40 studs used up. To then to make matters worse where there should have cut short nogs in places, he had used up to 5 studs nailed side by side. It is also worth noting the 70 x 45 merchant grade pine supplied for the temporary bracing was still strapped up in its banding.
Apart from the estimator error being changed to supervisors’ error. I documented the expected construction method of our framing (as per code) and it became part of handing a job over between the estimating and construction team.
Normally the estimating department does not get to investigate in full or even get told that there is a problem, the site manager simply stamps the invoice estimators’ error and passes it for payment.
By structuring a company and working together anything that does not balance between the purchase order and site requirements needs to checked and the item/s explained and added to the estimators check list if required.

Shout out to my newest followers! Excited to have you onboard! Welcome im here to help feel free to ask construction que...
03/10/2024

Shout out to my newest followers! Excited to have you onboard!
Welcome im here to help feel free to ask construction questions
Saheed Alade, Jalal Khel, Nkagzino Sando's, Ahmed LE Bourgeois, Ashiru Hauwa, Renaud Le Renaud

Shout out to my newest followers! Excited to have you onboard! Please make contact and if you have any general questions...
28/09/2024

Shout out to my newest followers! Excited to have you onboard! Please make contact and if you have any general questions ill do my best to answer you.
Olivier Jirourd, Stevene John, Abdoul Aziz Issoufou, Sidiki Aboubakar, Charles Labista Sonon, Palanisamy Gounder, Subhash Bansode, Matin Matin, Boubié Dominique Nébié, MD Faysal Ovi, Afzal Husain, Cyrille Makiese, Konyi Konyi

Shout out to my newest followers! Excited to have you onboard! Olivier Jirourd, Stevene John, Abdoul Aziz Issoufou, Sidi...
24/09/2024

Shout out to my newest followers! Excited to have you onboard! Olivier Jirourd, Stevene John, Abdoul Aziz Issoufou, Sidiki Aboubakar, Charles Labista Sonon, Palanisamy Gounder, Subhash Bansode, Matin Matin, Boubié Dominique Nébié, MD Faysal Ovi, Afzal Husain, Cyrille Makiese, Konyi Konyi

I'm here to answer any question.

THE HEART OF THE BUILDING COMPANY3. The site manager did not build it the same way as the estimator allowed for construc...
29/08/2024

THE HEART OF THE BUILDING COMPANY
3. The site manager did not build it the same way as the estimator allowed for construction.
The main cause of this problem is the lapse in communication that the manager/director is responsible for within a company. It is a very simple thing to fix and it is called team work. I like trying to resolve this from a practical way and it does not involve yelling at each other. The estimator and the site manager need to meet for a day. The morning spent in front of the computer screen allows the estimator to show the number of documents that must be researched for estimating, construction plan, constructions specifications, the client’s quotation, structural engineering, soil report, energy report, colour selections, product specifications, variations, town planning requirements, developers’ guidelines, price files and many more.
Understand and agree on what “marked up paperwork” is required to be supplied to site manager to assist getting it constructed the way it was priced. Document the result by a template naming each item the site manager will be supplied with on all future jobs.
In the afternoon visit the job site together and review how this would have helped on site. The site challenges that may have required changes to construction for example a muddy site that everything had to be lifted by crane or the site was so tight the rear bricks were dropped on site in position even prior to slab being poured. The need to change suppliers because the timeline was not going to be met so a different supplier was used. Some of the materials required may have been that out of stock so another material was used. Review the construction process and timelines to better understand to meet timelines some things change.
Further understand the site manager may be looking after 10 or more jobs and the timeline on each job needs to be met.
Review together the site and the estimating issues, understand the importance of the correct paperwork being made available to the site manager. Remembering the job has been priced by the estimating department and they need to work hard to support the job site requirements

THE HEART OF THE BUILDING COMPANY2. The estimator missed off so many bits from the costings that our quote to the client...
28/08/2024

THE HEART OF THE BUILDING COMPANY
2. The estimator missed off so many bits from the costings that our quote to the client was thousands of dollars wrong. We are going to lose money before we even start.
Firstly, I have personally estimated jobs for a small shed to millions of dollars’ worth of commercial building. I have trained plenty of estimators and overseen teams of commercial estimators.
Not one single job has ever been correct. One could argue something as simple as ordering too many nails is a mistake or the skip bin for the rubbish needed to be a 12m3 bin not a 10m3.

As a manager/director we need to look very carefully before laying blame on the estimator. Every job should have a template developed for it, break down the large jobs into stages. Take for example a Flooring Stage, Stump/bearer/floor Joist/ Flooring floor or concrete strip footing and concrete slab. Usually this will have a cost centre allocated to it allowing the back costings.
The template needs to be checked and confirmed as working. It is only with back costing an actual job that the learning is truly done. Take all items labour and materials right down to the last nail that have been charged against the flooring stage. Check the information to make sure the site labour has been allocated correctly on the time sheets daily and not simply rushed and filled in at the last minute before the timesheets are due at the end of the week. Usually, an unchecked template has less than half the items getting charged back to the cost centre. A common example is when the concrete supply company adds a travel fee per kilometre when the delivery is over 10km.

The question the manager/director needs to ask and have answered is did the company support the Estimator and check the costing?

In answer to loosing thousands of dollars before you even start. Manage the loss. Calculate the cost of the loss, balance that against the possible cost of paying the difference between your quote and the competitor’s quote. Carefully explain to your customer that unfortunately mistakes were made and you need to withdraw your tender.

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