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Constructive Candor

Are You Guilty of Construction Management Neglect?


"I don't need construction management, the county is inspecting everything."

As a land development consultant, I have heard this response many timeswhen I have asked a developer what their construction management strategy is now that we've crawled over the hot coals of entitlement and slugged through the gauntlet of construction plan approval. Great and consistently successful developers always have a CM strategy. It's a non-optional business practice. It's insurance they won't fly without.

This is an area of land development practice I am often surprised that some developers neglect. I choose the word "neglect" intentionally because without construction oversight in some manner their project, their “baby” they have such hope for, and their investment is left untended, alone, and cannot fend for itself.

The county or city inspectors are not there to caretake your project. They are there to insure the public improvements that will be dedicated to them meet the spec. They don't care about the cost. They don't care how many times it takes to get it right or how long. They are the agency's advocate not the developer's.

It’s possible that the contractors may have a long-standing relationship with the developer, but their business is delivering the contract commitments they have made and interpretation generally falls to their favor.

The design engineer may or may not visit the project during construction. Unless specifically contracted to monitor construction (which may not be the best choice), the design engineer will usually visit near the completion as they must certify the record drawings or as-builts after the fact. They might only respond to RFIs, or worse, just come out to look at something that is built incorrectly and, as a result, worry about their E&O coverage being tapped.

This can leave some big exposure to your investment and perhaps erode your expected returns. This is not to say all these parties are looking out for themselves at your expense. But unless their sole responsibilities are  to be your representative as well as being skilled and experienced at managing construction, they aren't adequately caring for your vulnerable investment.

If you hire a CM professional, even part time, they can help the county, the city, the contractor, and the engineer harmonize their efforts to your benefit to ensure your “baby” is as safe and healthy as expected when construction is complete. Without this project care-taker, you've left your “baby” on the doorstep and you just have to hope it's okay when you check in once in awhile.

There are many ways to find, hire, and contract with skilled and experienced construction management professionals. You can train yourself and commit personally to fill that role, but most developers are too busy cultivating the next opportunity. You can hire a third party individual such as a retired contractor, retired inspector, or developer. You can ask your design engineer if they have specific CM procedures and employees. You can go to a specialized CM firm. You can ask your banker who their other borrowers use on their projects.

Whatever construction management method you deem best for you, any are better that leaving that “baby” on the porch to fend for itself.

Do you have anything to add? I'd love to hear your thoughts! Reach out to me here:

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Topics: Land Development, Residential Land Development, Commercial/Industrial Land Development

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