Is Boilerplate Enough?

Think those standard construction contracts you bought are enough to protect you in the event of a legal hubbub? They might not be. Read this cautionary tale to understand why.

One of my friends and fellow contractors recently won a large new construction job for a light commercial facility. This was a big break for him; his part of the country is experiencing a huge slump in construction and his company was running off of fumes and small jobs. He used his standard Prime Contract template for the deal, one that he had bought as part of a construction contract bundle and had used for many other jobs.

My friend has asked me not to go into detail because of pending legal issues, but a loophole in the contract is looking like it might cost him big time. He brought on a lawyer after the legal mess started and he saw the mistake in the contract as clear as day. He said it was a wonder the issue never came up on any of his previous jobs. Now his only hope is to minimize his losses.

The moral of the story?  Have a lawyer read over your most important contracts. It’s a tough call to make; paying a lawyer to review a contract in this competitive of a market doesn’t seem to make sense, but it would have saved my friend a bundle.

I’ve determined that the best compromise is this: ask a lawyer if they have an approved set of construction contracts that you can purchase from them. Those who do will also be better able to modify them and defend you if necessary. This allows for a higher degree of protection than standard form templates while avoiding the very large cost of having a lawyer write a contract from scratch.

Why DO We Build Houses Out of Wood?

My family is hosting a foreign exchange student from Haiti and last night at dinner he posed a question to me: “Why are American homes built from wood?” This was prompted from all of the damage in Alabama caused by tornadoes.

I was perplexed.  “Why wouldn’t they be?” I retorted. He said that in Haiti, residents would see building a home from wood as a waste of an investment—the resulting houses would be  flimsy and would rot away over their lifetime. He told me that the nicest homes in Haiti are built from poured cement, stone or other hard materials.

I rebutted his assumption that wooden houses rot away over their lifetime. Poorly built ones might, but he was amazed to learn that there are houses in the United States that are over one hundred years old and are made out of…you guessed it, wood! With moisture protection and termite pre-treatment, wood is as fine a material as any to frame a house with.

Still, my Haitian friend’s question got me thinking. Why do we frame our houses with wood? I came up with a few answers:

Abundance

Trees are everywhere in the United States; much more abundant than on some island nations like Haiti. It simply makes sense to use the material that you have the most of. I imagine if we had more quarries than forests then we would build houses from stone!

Strong Enough

It’s true that many areas in the United States are at risk of being hit by tornadoes and other inclement weather, but even there we frame houses from wood. The extreme cost of making a storm-proof house out of a material like aluminum is simply not worth it to consumers.

It’s What We Know

The construction industry is one of the few remaining industries where knowledge is still passed down from skill tradesman to novices. Building Science programs are becoming more popular in colleges, but for now most contractors are still learning the trade from a tradesman passing down his knowledge. It makes sense that these tradesman would prefer wood—a familiar and flexible medium—than newer technology like plastic lumber or recycled material.

After explaining all of this to our foreign exchange student he seemed a bit more understanding, but said that he would still want a house made out of a more durable material!

Warzone – The Construction Industry’s Cluttered and Competitive Landscape

I want to use this week’s blog post to analyze the economic habitat that we as contractors exist in today: the construction industry. It, along with finance, has been the most tumultuous, jarred and altered industry in the US over the last decade.  

The resultant landscape is cluttered and confusing. One of the most confusing parts of it to me is the construction technology niche. Many contractors are turning away from technology solutions in favor of legal pads and spreadsheets because of the difficulty in researching and discovering a solution that works for them.

Meteoric Rise

As the housing bubble peaked in 2006, contractors, software vendors and marketers alike feverishly hopped aboard to try and win a share of the profits. Venture capital and investment money flooded into the market, providing start-ups with millions of dollars in funding which they used to grow huge.

Just as in the dot-com bubble, making a profit was as easy as having a business in the construction industry. If your company was around during those days then you probably experienced the massive amount of business and jobs to be had.The rising tide of residential construction lifted all boats. If only it could have lasted, right?

Titanic Fall and Evacuation

The bubble burst in early 2007, leaving businesses scrambling to make money where it once was easy. Those who could evacuate the market did: many construction technology businesses had their funding pulled and were stripped down to skeleton crews while residential contractors became fiercely competitive. 

A Cluttered Landscape

The result of it all? A scarred and cluttered landscape; difficult to navigate and full of pitfalls. The self-organizing ability of the industry was badly damaged during the housing crisis, something you’ve probably realized if you’ve searched for product reviews or other contractors to communicate with online.

If you’ve done any research into construction technology solutions like estimating software or project management, you’ve likely seen the many husks of companies that were founded during the bubble and subsequently abandoned. Their blogs sit inactive or deleted; they’re all but silent except for an occasional press release.

Time as a Solution

As time goes on the industry’s wounds will mend themselves and the construction product space will be clearer and easier to navigate.

 In the short term, tech savvy contractors are doing their part by communicating via blogs, Twitter and Facebook, increasing communication and revealing which solutions work and which don’t. Part of the reason I started this blog was to reach out to my colleagues in the industry and improve the flow of communication.

What are your thoughts on the state of the industry?  What communication hubs do you use, and why are they valuable?