Category: Staff Memos

The Building industry in Australia is tough. The insolvency rate is over: 20%. Lies, non-paying etc. strikes, cost surges etc. is all de rigger. Builders are stressed. There’s no need to stress them out even more. Variation work is common the industry.

Simply use the forms on our quote app – they are standard template fields which will save you a lotta headaches.

If you need to remind clients about a variation:

1. Ask nicely.
2. Ask the proper way.

DO NOT DO THIS:

• “This is a variation for both of us”.
• “Please approve the variation. So that we will proceed with the changes”.

No: it is not a variation for both of you: the client will decide the variation. You shouldn’t tell him that. If you do, you will simply annoy the client.

No: do not ever say: “please approve so that we will proceed”. This is akin to threatening the client, and holding up the job. Never, ever do this! It’s the worst way. You will annoy the client and he will walk – this has actually happened (yes there were other factors contributing) but it could be avoided.

WHAT SHOULD I DO?

• We want our clients to voice objections. That’s right, we WANT to hear the objections. Everything we do should be clear, fair, transparent, and should have the consent of all parties. The communication should reflect that. So ask like this:

These are all “no-orientated” questions. They are decided to illicit a “no” – to make it easy and welcoming for the client to object. Use the exact wording above.

1. Do you have any objections to this proposed variation request?
2. Do you object?
3. Sounds like you have an issue with this request?

Fixed Price Contracting

• Some clients agree to our contract, knowing full well that we do not do fixed price contracting. If any client rejects variations because they want fixed price contracting – then please feel to contact me directly about this.

Be Honest

• If it takes 1 hour, then write down: 1 hour.
• Do not write down 3 hours. If you get caught, then clients will loose trust in you, in our firm, and so will I. You will get a reputation as a liar, and that reputation is hard to shake.

If you have 20 hours worth of variations: do you think your client will rejoice? Typically, no!

Clients demand transparency! They have every right to know: (i) why you are charging them, and (ii) what they will get in return. It will not do to simply say: variation: 20 hours. Why not? Clients will assume you are pulling the wool over their eyes. If you wanna get paid, you need to justify your pricing and proposed scope of works to them.

Break your costs / hours down!

Where are these 20 hours going? Well, that’s 2 hours per level. And there are 120 panels per level. Which equates to a change of about 1 minute a panel. That seems extraordinarily efficient, now that you state it in those terms.

Your clients will thank you. Remember, they’re going to use your justifications so they can in turn claim costs from their clients. And best of all, it means you’re more likely to get paid for your labour.

This will probably apply wherever you work: don’t send project and firm related correspondence on your private whatsapp chats, or on your private emails etc.

Why not? It’s very hard to track. We have no record. Nothing can be verified.

Protect yourself, your careers, your firm, and your clients: it’s pretty simple: avoid using private channels for firm correspondence.

When traveling overseas, especially India, I often hear the following:

“Where are you?

“I’m almost there”

“When will you arrive?”

“Five minutes!”

They always say: “five minutes”.

Once, I remember waiting, for at least 45 minutes.

Not sure if this is a cultural thing. I’ve heard Indians say:

“Oh, that’s IST – Indian Standard Timing”.

Friends – Indian Standard Timing might work very well for your own personal arrangements, but it will not work well in the USA / UK / Europe / Australia / NZ, on construction projects, where tight deadlines are involved, and where “Liquidated Damages” are at stake.

Why are ETAs important?

Because clients need to order material, organise labour, and equipment. It will not do to organise a crane, and hire labour, only for them to sit idle for a couple of weeks because you were overly optimistic with your delivery times. Cranes alone might cost $5000 – $15,000 per day. What about site crews? If you give the wrong ETA, then it could cost your client a lot of money. Which means it’s gonna cost you a lot of money.

Give real ETA. Not the typical: “5 minutes later” ETA. Update your clients constantly on your Tek1 status reports.

Summary: Give the correct ETA, and make sure you meet it.

Lesson – Keep the statuses short and sweet

ETA – This means Estimated Time of Arrival. Just put the ETA and then the date, the time and the time zone:

e.g. We will issue the Takeoff reports by the end of 02.04.2025

Don’t do that.

ETA: COB 2025-04-02 (AEST)

Clients care about their time zone, not yours.

Lesson – Clients Pyramid Their ETAs on top of Your ETAs – so add a buffer

Why is a client asking for an ETA? Because they need to:

1. Tell their client the ETA.
2. They need to plan / arrange resources. So does their client. e.g. if they hire workers to come to their factory on date: XYZ to do work – how can they do any work without any drawings to work on? These workers will be sitting on the site twiddling their thumbs, and it is very expensive.
3. If you promise a time and don’t deliver: then you will lose your client.

The Cost of promising ETAs and not meeting them is large – if it does not come on time, and the communication is poorly managed – then we’re hurting our clients

Let’s take this job for example: https://tek1-quotes.herokuapp.com/organisations/2/quotes/12046

It was filled with issues: some from our side, the other from the client, and the other just due to coordination issues.

We need to ensure that our communication on the hold-up points is clear.

I’m not here to lay blame: but to make people understand the cost.

• You promise a time to the client.
• That time gets blown out. The reasons must be clearly communicated. If it is not communicated clearly you will get blamed.
• The client promises a time to his client based on your ETA. If the drawings don’t come on the time, then the client cannot meet his ETA. In this case, the delays became so egregious that our client’s client – was threatening to de-scope him from the job, cancel his contract and go somewhere else.
• This particular job is worth over $100,000 to our client. And our client is about to lose millions of dollars because he will have burned his client – because of the ETA issues and delays. Again not laying blame on anyone.
• Think of the cost: our poor ETA management and poor communication costing our client, but it is also costing our client’s client.
• In addition I had x2 clients who were about to be severely compromised because of LGS delays, and I was delayed in my other projects.
• The cost? My x2 clients potentially burned (they were not), our client potentially burned, and our client’s client also potentially burned.
• The cost is very very high.

Do me a favour: add buffer time, and communicate your hold-ups effectively. Perhaps this might require a technological solution.

Here is a memo we received from one of our clients. Such memos are not infrequent:

I am pushing for stamped drawings, however from the IFAs issued there should be no changes made. I need to begin the steel ordering process tomorrow. There is a lead time on the ordering of the steel, and by that stage we should have the finalised drawings. Anything that gets altered can be held at the processing of steel stage.

Can you please issue the full pack for the Spiral tonight.

Thanks

Question: what should you do?

1. Do whatever the client says, because the client is always right?
2. Stamp with IFC and send to the client?
3. Ask your boss what you should do?
4. Send the drawings without the IFC stamp?
5. Send the drawings with an IFA stamp + a disclaimer on the drawing + another disclaimer in the same email?

To answer this question, you need to first understand the approval work-flow in building and construction projects:

Process in Building and Construction

1. You do the shop drawings.
2. You submit them for approval.
3. The architects and engineers then approve the documents.
4. AFTER they have been approved (not before, but after), then you can mark: “For Construction” and release the drawings.

Please follow this process. It is very important from an insurance and legal liability point of view.

Why is the process important?

In every building and construction job, there is risk. If something goes wrong, then fabricators and builders are likely to start blaming people – lawyers will blame anyone who is not insolvent so they can recover the loss. If people fabricate from IFC drawings without a stamped approval, then we will not be covered by insurance: the entire firm could go under.

When things aren’t approved: the things are likely to be in a rush, and things are likely to be poorly planned and coordinated. When the builder starts blaming you for releasing IFC without stamped approval, even though he demanded it: what are you going to say in response? We want to avoid problems and disputes at all hazards. To keep it simple:

DO NOT MARK AS IFC WITHOUT STAMPED APPROVAL

So what should I do?

1. Release the drawings as IFA with the following annotation:

2. Add in the following disclaimer ON THE DRAWING:

Fabricate at own risk. No stamped approvals? Then no insurance. If anything goes wrong, for whatever reason, you’re carrying the can, not Tek1.

Summary:

DO NOT MARK AS IFC WITHOUT STAMPED APPROVAL

Why? Check the insurance documentation here (internal link):