I've got a bad feeling about this

It's a very distressing feeling when you're telling your boss that you understand what he wants you to do and that you have no problem getting it done in the required timeframe while looking him in the eye and getting the feeling that hes disappointed in you.

I had that feeling today and the only thing I can think that he's thinking is that I should've thought to do what he was telling me to do already.

The Deep Beam candid answer is that I had thought of much of what he was saying, but since it involved the Special Permit that we've been working on for months I was hesitant because I wasn't sure what the City wanted to see.

I hate this feeling because while I, and you True Believers, know that I'll do better next time, the next time I get into this kind of situation with this boss is likely to be a long time from now. What do I do in the meantime to let him know that I'm learning from my mistakes and from his experience?

One way is to simply lead, which is the theme of 2011, but that's not easy for me. I need some backbone building exercises.

I am trying to lead and in some situations I've done so effectively, but me taking the lead on a problem often means that my bosses don't find out there was a problem in the first place. Nice catch 22 huh? In don't really want to be That Guy who goes around telling stories about how awesome he is for handling things.

I guess I keep thanklessly going on trying my best.

Live via satellite.

Normally my postings are written hours or days after the event I'm describing, but today, on a very special installment of Deep Beam, I give you a posting mere minutes after the event.

I just had a phone conversation with a GC that I thought was simply to arrange a time to have a different phone conversation tomorrow with my boss. Instead it led to her almost walking away from the job. I'm stunned not only at the direction the call took, but also at how cool I remained through it.

First off, yes I said that the GC was a she, which many of you may know is rare, and I'll continue to call her that even though she is not actually licensed in this state. It's just convenient; she owns the company that has a licensed GC but so far I speak with her more than him.

The gist of things are that she's the higher of two bids by about $300K, and she knows it. Our internal agenda for tomorrows call was to make sure that the low guy hadn't missed something that she had caught, but we told her it was to better understand her costs (also true). When I picked up the phone I hoped I'd get her to say that we're on for tomorrow and that's that. Instead she went right into talking about her number for the Electrical scope of work and how they priced the drawings and specs and her number was fair. Then she went on to say that it was professionally disrespectful to her that we were having phonecalls and not meetings. That was the first time I was stunned by her call. I tried to explain that we hadn't even gotten to the call yet since we kept having calls to set up the call!

The conversation went on and at a certain point I just decided to let her go and I'd say as little as possible since she was off on a tear and going a mile a minute. Pretty soon it came out that each number in the price had a 15% fee added to it for potential mistakes or other cost overruns. She's also charging about 13% straight overhead and profit on everything, therefore the client is paying 28% of the cost of the job that potentially does not go to any physical thing that will be part of his house when it's done. Amazing. When I told her that the other GC wasn't charging the additional 15% overrun fee because if he made a mistake it would come out of his profit she was floored. Basically she wasn't willing to put her profit at risk in the way that is pretty standard in the industry. That 15% delta is going to lose her this job.

At this point I still hoped to get a time to talk tomorrow, but then she went on. She straight out told me that there was no way she could do the job for the lower GCs price. Effectively she was taking herself out of the running in this competition! I thanked her for being candid and told her that if that's the case it was the clients call. A few minutes later the call was over and there was no need to have the one tomorrow.

I'm proud of myself for keeping cool and not punting the call to my boss, but also because I realize that I couldn't have had that conversation a year ago. Not only am I more confident now, but I also have more experience and know better what to say to people who are older and more/differently experienced than I am. It's amazing to have experiences that allow for such clear self-examination.

Feels good.

Change Orders

As promised last week, here's the post about Change Orders.

So what's a change order?

A change order is the instrument by which the construction cost as stipulated in the contract is either increased or decreased.

When do you need a change order?

When the scope of works is changed, which can happen for any of a number of reasons.  The homeowner can add scope by deciding they want something more than what was in the original scope, like say a jacuzzi, or another bedroom, which would be a straight add.  A client can change from a more expensive to a less expensive building material (value-engineering), for example from a slate roof to an asphalt one.  These are elective change orders that the client initiates and usually aren't that much of a problem.  In the case of an add, the GC is happy because they get a mark-up on the additional work, so their profit increases.  Similarly if the Architect has a design fee that is tied to construction cost, they get an increased fee to cover the additional design work that the change requires.

There are also change orders for "unforeseen circumstances", which are conditions that no one could justifiably have predicted.  There could be rock ledge under the area where the basement is intended to be, termite damage in a wall that was meant to remain untouched, or even the discovery of hazardous materials like lead, mould or asbestos where none was anticipated.  In these cases the team of the GC, Client and Architect come to a conclusion as a group to decide if the situation was truly "unforeseen" and a change in scope, or if the GC should've had a reasonable expectation that the problem was there and provided funds in the contract amount for it.  These change orders can be hard for a Client to swallow, but usually they can be made to understand their necessity.

The worst kind of change order is for omissions in scope.  This could be because the GC failed to understand the project as bid, or that the Architect either described the scope inadequately or omitted something that they Client had requested.  Omissions in scope caused by the Architect are in my mind the worst (I'm biased) because it means that we've (I've) failed or misunderstood the Client in some way.

By the letter of the contract (depending on the form used), if the Architect and Client can show that a disputed area of scope was in fact in the original drawings or specifications then GC is bound to provide the scope without an increase in cost.  It seems cut and dry, but it's actually pretty tough to deal with because it calls into question what else the GC has made mistake on.  Inevitably there are arguments over who's responsible for the cost and it creates a contentious atmosphere at the job site, which leads to aggravation and discord that get in the way of making progress on the project.

The finger pointing can lead to any of the three parties to the contract being responsible for the cost.  We've seen how the Client and the GC can be responsible, but at times (rather perversely) the Architect can be on the hook for the cost (Something that has happened to me quite a bit lately and is really hard).

With this as background I'll be writing future posts about my experiences in being on the butt-end of change orders, and all of the negativity that can go with them.  It'll be good times.