Each year we invite some of the concrete industry's best minds to come together to discuss the defining issues of the day. We never know where the conversation will end, but it's always interesting getting there. This year we went from contracts and construction team relationships to expectations to differentiating your work. We then moved on to managing risk, increasing profit margins, and change orders.
Palmer: What kind of relationship do you have with the construction team on your jobs? Do you have problems with your contracts?
Zinchiak: We have a pretty good relationship with the partners on our jobs. When it comes to the contract part, I try to get all my contracts and scratch things out when I don't like it, but I'm willing to work with people, and that's been good for our business.
Sweeney: We've seen a distinct change in the boilerplate of contracts. The GCs now have a highly paid guy write their contracts so they come across pretty one-sided. We've found that we really need to get legal advice—we have a lawyer read through it. But once we've worked out the boilerplate with a client, then we have something to work off of for the next job. It depends on how the negotiation goes: there are pay-if-paid clauses, insurance that gets shifted over, and hold harmless agreements that go on forever—a variety of bad issues, but I don't know many of the larger GCs who don't include that stuff.
Palmer: Bud, what about from the testing company's viewpoint—what is your relationship to the construction team?
Werner: Our customer is the construction team, although the person who is paying the bill is quite often the owner. But our job is often not very well defined because we are totally dependent on the contractor's schedule. That's why we have so much trouble with contracts: lump sum contracts don't fit what we do. We like to work on unit rates and work with the owner. The most important thing is to recognize that we provide information for everyone on the team: owner, contractor, subcontractors. We don't build anything, but we serve a valuable function and if our client allows us to do that [provide information to everyone], it works pretty well. Sometimes the client wants the paperwork to go only to them, and we have to abide by their wishes. But a good example is concrete reports. When we test concrete on a jobsite, we send results out to everybody. When I first started in this business, we would often get comments from the customers asking why we were sending to everyone the information that they paid for. But in general we've been able to get everyone to recognize the value of this service.
Nasvik: Do you ever find yourself having to take a position against one of the parties involved in a job?
Werner: I find it necessary to interpret the information and data that we have and in some cases that will favor one party or another. But I do that only from the standpoint of the data that's available. An adversarial relationship can develop, and then everyone is trying to show that it's someone else's fault other than their own. But we do look at ourselves first to see if the testing is at fault. The problem is that in the field we test the concrete, place it in a curing facility, then leave. It's not unusual for the curing facilities to be moved, violated—even disappear.
Schneider: Everyone seems to know how to make the cylinders; it's care of the cylinders after the fact that we see abused. Whose responsibility that is we often don't know, but the best way to avoid these problems is to cover it in the pre-pour meeting. One of our recommendations is that the testing company be a part of that, and if we have a plan to cure the cylinders properly, we tend not to have as many problems. Bud mentioned the test reports—we like to get copies of the test reports, even though we aren't paying the bill, so we can see what's going on. If something goes wrong, the GC will come to us. It's better now with e-mail. Back when test reports came by regular mail, by the time you found out there was a problem you'd already made several more placements. We'd rather find out early so we can address the problem and take whatever corrective action is needed.
Palmer: So you do strive to develop a team approach?
Schneider:Partnering is an overused term, but, yes, we do, and I think it is the best way to do business. We have found that successful contractors have chemistry. The chemistry has to be there: the design team, the GC, the testing company, the ready-mix provider. A chain is only as strong as its weakest link. If you can't get information from the designer or the testing firm, it creates problems. When everyone works together we have successful jobs, but when that breaks down, things get miserable real quick.