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Love Your Neighbor

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Kenneth Fargnoli, Resident Engineer and Construction Services at GM2 Associates shares with us the importance of good people skills:

I am going to stray my blog away from Contract Administration for a moment to talk about people skills. I was reading Victoria Pancoast’s article about remembering names (something I am not good at and I need to work on) https://www.linkedin.com/pulse/art-remembering-names-victoria-pancoast-leed-green-assoc-cpsm?trk=hp-feed-article-title-like and it brought to mind all the shortcomings people have when interacting on a construction project. Victoria rightly spoke of connecting with people and how important that was. I am going to go one step further and say that you need to get to know people personally. Life is all about relationships and we all tend to want to be liked, we want to like others and we want to be around people we like. It’s pretty basic really but it is so often missing on a project.

One of the positive things to come out of Partnering 20+ years ago, was the workshop where everyone told you a little about themselves. It made you identify with people other than as their adversary. You could find out that you had more in common with a person than you knew and out of that came mutual respect.

All of us in this world are just working to provide for our families and no one leaves for work in the morning saying to them self “let’s see who I can piss off today” ……. well almost no one.

So …Try it. This has always come easy for me because I genuinely like people ….. almost all people. There are very few people I don’t like and it’s not for lack of trying. They fascinate, sadden and inspire me.

C.S. Lewis stated that “Do not waste time bothering whether you “love” your neighbor; act as if you did. As soon as we do this we find one of the great secrets. When you are behaving as if you loved someone, you will presently come to love him. If you injure someone you dislike, you will find yourself disliking him more. If you do him a good turn, you will find yourself disliking him less.”

On your project today or on the next one get to know the people you work with personally. Treat them respectfully and as C.S. Lewis said even if you don’t like them treat them as if you do.

You may find out that, heaven forbid, you actually like them.

(You can also find this post on Linkedin: https://www.linkedin.com/pulse/love-your-neighbor-kenneth-fargnoli?trk=hp-feed-article-title-publish)

Very Low Bids – Are They a Good Thing?

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Kenneth Fargnoli, Resident Engineer and Construction Services at GM2 Associates shares with us his view point low bids:

If you read my blog series The Good, the Bad, and the Ugly (if not read it here: www.linkedin.com/pulse/good-bad-ugly-administering-construction-projects-from-fargnoli?trk=pulse_spock-articles ) you know that contractors bids or more to the point low bids can create havoc for the owner. It can be a low overall bid or just a low bid item but either way it can create an adversarial relationship on the project. While working for the Department of Transportation in the Construction Claims unit I came across many claims which ultimately stemmed from the contractor’s inability to make a profit due to a large part a low price. One project in particular involved a large bridge builder at the time who dominated the Connecticut Bridge landscape. This contractor swooped in on many projects and underbid all his competitors. One of those projects involved a major water crossing in the Hartford area. When this project was estimated by the designers just prior to the bid opening they estimated the cost to be about 100 million dollars. When the bids came in the successful bidder’s low bid was only 2/3rds of that amount or 66 million dollars. The nearest bidder to them was over 100 million and the resultant contract was awarded to the low bidder. Later while I analyzed their bid during an examination of their claims it was apparent that the contractor’s underbid was nothing more than a sharpening of the pencil akin to destroying the pencil and the sharpener. Their chief estimator in fact had estimated the cost well over 100 million. One item in particular, the structural steel item was bid for less than the cost of the steel itself not even including the cost of erection. Any cursory review of the bid documents would have revealed this fact.

Obviously, this resulted in the industry and the owner taking notice and the contractor was asked to come in for a meeting with their bonding company to discuss how they would handle this project with such a low bid. Both firms assured the DOT that they could successfully complete the project and they subsequently awarded the project. Although in the short run they saved the taxpayers of Connecticut large sums of money, the end result was a miserable project for the participants, a replacement contractor after the bankrupt contractor couldn’t complete the project, millions in claims and a ripple effect to all their other ongoing contracts which numbered over 20 at the time.

The lesson learned here is that I believe owners and bonding companies need to scrutinize low bids when it is obvious that the contractor can’t complete the project profitable. Obviously, this is not easy to do in the low bid environment especially when the public trough is involved but it is absolutely essential to a successful project. I still believe the ramifications to the Connecticut construction industry that resulted from this Contractor’s actions are still felt today many years later.

(You can also find this post on Linkedin: https://www.linkedin.com/pulse/very-low-bids-good-thing-kenneth-fargnoli?trk=hp-feed-article-title-comment)

The Good, the Bad, and the Ugly – Part 9 – The “Gray” and the end

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Kenneth Fargnoli, Resident Engineer and Construction Services at GM2 Associates shares with us his view point on Construction Administration:

As I told you in Part 1-8 I am going to demonstrate what I believe it’s the best way to administer construction projects from an owner’s point of view. In the first two parts, I gave you a few pointers on what makes a good and bad project. In part 3 and 4 I discussed ways to keep the project “good” and in part 5 I discussed some things you absolutely must do if you find yourself on a “bad project”. In Part 6 I defined what black, white and gray issues are. In Part 7 through 8 I discussed issue resolution on a “bad” project. Now I conclude this discussion with the Gray.

On a “Bad” project you should NEVER RESOLVE A GRAY ISSUE IN ISOLATION. What I mean by this is that all Gray issues should be combined with other Gray issues along with all denied Black issues and resolved in groups.

Let’s play this out. You are on a “bad” project and the contractor presents an issue to you. Your designee identifies this issue as Gray and it’s the first gray issue on the project. At this point you are given three choices. You could deny the issue because you believe you have the stronger argument, you could negotiate it and resolve it, or you could defer the decision.

Obviously a lot of this is fact intensive but for the sake of discussion let’s assume your argument is better than the contractors and you put the odds of winning that argument to a factfinder at 60% or better. Let’s also assume that up to this point you have already resolved a few White issues and denied a few Black ones. In this situation I would almost always recommend waiting for another Gray issue to pop up before resolving.

How many Gray issues should you wait for? Well if it’s a large “bad” project you won’t have to wait long. In fact, I would bet you would have multiple issues presented at each and every progress meeting. Also, understand that I am only discussing deferring “Gray” issues. Issues that could legitimately and successfully be argued that there is no entitlement or i.e. pass the straight face test. As previously discussed do NOT do this with White issues. Also remember I don’t believe you should identify the issue as Gray to the other side. You could always defend it as denied. Only you need to know that you are deferring it.

Once you have amassed a “bucket” of Gray and Black issues resolve them as a group and get clear written resolution to this by drawing a line in the sand. Do not leave any Black issues on the table. Make sure they are included in your list of resolved issues.

Another great way to resolve issues is when there is legitimate extra work to be added to the project especially when its significant and/or optional. There usually is no greater motivation than when new money can be brought to the table.

If additional funding is out of the question, reducing the scope of the project or making some work easier to perform can also be a great way to find your way to resolution.

The important thing to remember is to resolve your issues as you go deferring the gray issues along the way until the time is ripe to settle a group of issues. Then and only then get clear and complete “line is the sand” releases along the way.

Well that wraps up this version of my blog The Good, the Bad, and the Ugly……………. If you stuck with me this whole time I sincerely appreciate it. I would appreciate any comments and/or questions.

(You can also find this post on Linkedin: https://www.linkedin.com/pulse/good-bad-ugly-part-9-gray-end-kenneth-fargnoli?trk=prof-post)