Liquidation in SME Construction

Written by LetsBuild

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On some of the project turnaround roles I’ve walked into I’ve had such late nights that I’ve even missed my evening meal!

My day was spent sorting out the “Lads” and getting their serious input as to how we could drastically accelerate the works. Once most of them had left site, I had to turn to sorting out the paperwork in the site office!

This was often just in great heaps on every horizontal surface! Even the drawings; nobody had a clue where to find the latest issue! If an RFI had been issued nobody had a clue as to whether or not the information had been received!

Confirmation of Verbal Instruction? Well, it was unlikely that one had ever been issued! The lads just got on and built it however they felt was best, just so they could get on with the job!

How suppliers ever got paid, or even continued to supply materials, was a mystery; the Delivery Notes weren’t being checked and submitted to the Office “bean counters” for checking before payment! This situation must have thrown the contractors’ Accounts Departments’ into chaos!

Now how does this situation come about? I had to think about it and eventually came to understand the most likely reason. Many, if not most, Site Managers started out their working lives as tradesmen. I’ve met ex-brickies, – joiners, – sparkies, – plumbers, and all the rest, who had learnt enough about the complexity of construction to eventually gain the experience which allowed them become Site Management. They could wander round the site, looking important in their suits and ties, knowing what they were looking at and having all the subtle skills and experience required to solve the problems that cropped up. The lads respected them. Once they got back into their offices, though, it was a different situation!

These guys were construction experts, but useless as Clerks! They had neither the experience nor the understanding of the importance of the paper trail to be able to stop on top of it all! A quick look at the latest drawing and they understood it. It didn’t matter whether or not the subby got his copy; they would just explain to him what was now required.

Same thing with the non-existent RFI; a word with the engineer or architect and the information was just passed on to the guy doing the job.

The Accounts Department probably never got to know, so someone ended up losing money on the project!

Is that why there is so much liquidation in SME Construction?

The other, perhaps most important, reason the paperwork wasn’t dealt with as it should have been is down to the mind-set of the managers. Skilled and experienced as they were, they just didn’t, couldn’t, see the importance of the paper trail and deal with it properly! They are a great breed of people but they totally lack the clerical mind set and ability to speed-read required for this aspect of the job!

On large projects this isn’t a problem. There are usually clerical staff to look after the bits of paper. But on the projects up to, say, £10 million, there isn’t the profit margin to pay for additional people.