TECHNICAL SKILLS

INTRODUCTION

Safety is a topic of fundamental importance to the construction supervisor. There are numerous reasons for this. Among the most important is that most supervisors feel a moral obligation to keep their workers safe. There are also reasons tied to costs, schedule, production, quality, and company reputation, all of which can be enhanced by a strong safety record, or significantly damaged by a poor safety record.

Safety is a broad topic around which many courses are designed, certifications provided, and entire degree programs structured. Safety in the workplace is a major concern of government agencies at all levels: federal, state, and local. Safety is also a major concern of sophisticated owners, whether in the public or private sector, as well as the various entities that participate in the construction process.

All individuals that contribute to construction, from the project owner to the laborer working in the field, have a stake in safety. All participants in the construction process have a part to play in establishing and maintaining a safe work environment. Contributors to the construction process, such as material suppliers, equipment providers, lawyers, accountants, and sureties also have a keen interest in .

This chapter provides an overview of construction safety, focusing on a few key areas. Since safety plays such an important part in construction, any supervisor should have significantly more training and education in safety than it is possible to provide in this book; however, any book on construction supervision would be

155

156 TECHNICAL SKILLS

deficient if it did not recognize safety as an important component of construction supervision.

The chapter begins by addressing why it is important to have an effective construction safety program. This is followed by discussion of the supervisor’s responsibilities and activities in support of safety. The chapter will then look at the two major factors that lead to work site incidents: unsafe job site conditions and unsafe behaviors. The chapter considers creating a safe work environment, followed by a discussion of developing a mentality of safety that is a powerful tool in combating unsafe behavior. Finally, the chapter closes with a review of how to deal with a safety incident or accident when it arises.

ACCIDENTS, INCIDENTS, AND SAFETY RISK

An accident is an unwanted, unplanned event that results in injury, illness and/or property damage. An incident is an unwanted, unplanned event that has the potential to cause injuries, illnesses, and/or property damage. Since an incident focuses on potential, many incidents do not cause injury, illness, or property damage and, hence, could be considered a near miss. Incidents are an indication of safety risk.

Chapter 8 provided a broad overview of risk associated with construction. It identified the risk posed by incidents and accidents on the job site as one of the primary areas of risk. Although this was only one of six areas of risk reviewed, it is one of the most critical, and it is directly in the area of interest of the supervisor.

Construction work is very risky. The supervisor has a twofold responsibility with respect to safety. The first part is to keep her area of the construction site safe for all workers in that area and for anyone else entering the area. The second part is to ensure that her workers work safely. The discharge of these responsibilities should be supported by a well-designed construction safety program.

THE IMPORTANCE OF A CONSTRUCTION SAFETY PROGRAM

A construction safety program provides many benefits for the workers, the job, and the company. Following are some of the benefits to such a program. It will:


Allow workers to go home safely at the end of the work day

Increase productivity

Provide higher profit margin for the company


Provide lower insurance costs

SAFETY 157
Enhance the company reputation

Offer better personnel policy

Support compliance with the law

In the rest of this section, we will focus upon one of the key reasons, from a company standpoint, why a safety program is important. That reason is cost.

According to the Occupational Safety and Health Administration (OSHA), “Safety is good business. An effective safety and health program can save $4 to $6 for every $1 invested. It’s the right thing to do, and doing it right pays off in lower costs, increased productivity, and higher employee morale.”

Many factors contribute to the cost of an accident. These factors can generally be grouped into direct costs, indirect costs, and intangible costs. Direct costs include such items as medical treatments for injured workers, temporary wage replacement, and awards for permanent impairment. Indirect costs, those generally not covered by insurance, include such items as lost time by injured workers or other workers affected by the accident, training new or temporary substitute workers, and efficiency costs associated with breaking up and reforming crews. Intangible costs include such things as worker morale and company reputation.

Direct costs are those that are normally associated with accidents and are relatively easy to evaluate. Indirect costs are more difficult to calculate but are considered to be significantly higher than the direct costs. By nature, intangible costs are very difficult to measure.

Accidents are very costly to the project and to the company. There is a line item in the project budget to account for the cost of safety prevention, but there is no line item in the budget to account for the cost of accidents. If a cost item is not accounted for somewhere in the budget, then the only place to account for that cost is from the profit. Figure 9.1 gives an analysis of the estimated total cost of an accident and the sales required to pay for accident costs.

Sales Required to Pay for Accidents

Accident Hidden Total

If your company margin is:

Costs Costs* Costs

1%

3%

5%

$ 1,000

$ 6,000

$ 7,000

$ 700,000

$ 233,333

$ 140,000

$ 5,000

$ 20,000

$ 25,000

$ 2,500,000

$ 833,333

$ 500,000

$ 10,000

$ 30,000

$ 40,000

$ 4,000,000

$ 1,333,333

$ 800,000

$ 25,000

$ 50,000

$ 75,000

$ 7,500,000

$ 2,500,000

$ 1,500,000

$ 100,000

$ 150,000

$ 250,000

$ 25,000,000

$ 8,333,333

$ 5,000,000

* Hidden costs vary from about 1.5 to 6.0 times accident costs
Figure 9.1 Sales Required to Pay for Accident Costs
158 TECHNICAL SKILLS
The Cost of an Accident to the Company

In Figure 9.1, consider an accident whose direct costs amount to $10,000. The hidden costs are estimated to be about three times the direct costs, so the total cost of the accident, excluding intangible costs, amounts to $40,000. If the company profit is on the order of 3%, which is about the average for a U.S. construction company in good times, the amount of work that must be completed to offset that $10,000 accident is $1.3 million. This would be significant for any construction company, and a disaster for most small construction companies.

One key cost factor for construction companies is the cost of insurance. Not only does the cost of an accident, as illustrated above, have a significant impact on company profitability, but company insurance rates are also linked to the company’s safety record. Insurance costs increase significantly when an accident occurs. A measure of a company’s safety record, developed years ago by the insurance industry, is the Experience Modification Ratio (EMR). This is calculated by a complex formula, and is expressed by a single number with 1 as the average across the industry. Since the EMR is a multiplier applied to the base insurance rate, an EMR above 1 increases the insurance rate above the industry average and if the EMR is below 1, the result is an insurance rate that is below the industry average. It is not uncommon for safe companies to have EMRs in the area of 0.7, while companies that have had recent accidents score well above 1.

Two important factors associated with the EMR should be noted. First, the EMR is based upon a rolling average, considering the company’s safety record for the three years prior to the current year. Thus, an accident will affect the EMR not only this year but for three years into the future. Second, since the EMR has become a respected measure of a company’s safety record, many owners of construction are using the EMR as a prequalification factor for those who want to compete for their construction work. So not only does a high EMR directly impact the cost of operation of a construction company, but it also has a profound impact on which jobs the company is allowed to bid.

The conclusion is that just from a purely financial point of view, safety is very important to a construction company. This imposes on the supervisor a very strong responsibility to make sure that his jobs are safe by implementing a strong safety program within his sector of responsibility.

THE SUPERVISOR’S SAFETY RESPONSIBILITIES AND ACTIVITIES

The supervisor has a number of responsibilities with respect to safety. First, the supervisor must be trained and current in safety, especially as it relates to the specific activities in their work area. They need to have their own safety program

SAFETY 159

and be aware of other safety programs and requirements relevant to their work area, including governmental safety requirements, those of the client, those of their own company, and those of the specific job, if they represent a specialty contractor.

Within the context of their work sector, supervisors are responsible for developing and implementing their own safety program, compatible with all of those in the hierarchy above them, including the ones identified in the previous paragraph. The supervisor is responsible to train their workers continuously, both formally and informally. Formal training might take the form of sending a worker to a class or requiring participation in a periodic safety discussion. Informal training happens when the supervisor identifies an unsafe behavior or condition and discusses it with the worker involved. Finally, the supervisor is responsible for enforcement of the safety program.

Derived from the responsibilities, the supervisor will engage in a number of safety-oriented activities. They will ensure that each worker is properly oriented to safety for their work area when they first arrive in that sector. They will continually develop safety awareness through such activities as regular “toolbox” safety meetings, recognition of safety achievements and innovative safety practices, and taking note of and dealing definitively with any safety infractions.

The supervisor will always be on the lookout for unsafe conditions or behavior and enlist all workers in this vigilance. Not only does the supervisor look for safety issues whenever he or she is walking the site, but from time to time, the supervisor should make a safety inspection, looking specifically for safety concerns.

The supervisor should deal immediately and decisively with safety incidents or accidents. These need to be reported to the appropriate authorities immediately and an investigation undertaken. Falling in the category of risk, near misses should also be identified and investigated. The objective of any safety investigation should be to identify and eliminate the root causes so that problems do not reoccur. This takes precedence over finding someone to blame. Responsibility for a safety incident needs to be assigned, but this is not as important as eliminating the causes so that the situation does not occur again.

Finally, the supervisor should be on the lookout for improvements for his safety program or that of any other entity on the site. No safety program is perfect. Continuous improvement in safety leads to fewer accidents and incidents and ultimately to a lower EMR.

CREATING A SAFE WORK ENVIRONMENT BY REMOVING JOB HAZARDS

Creating a safe work environment is approached in two directions. The first is to enlist the creativity and commitment of all stakeholders to prevent hazards from reaching the job site. The second is to identify hazards that have occurred at the job site and remove or mitigate them.

160 TECHNICAL SKILLS
The Stakeholder’s Responsibility in Preventing Hazards

Creating a safe work environment is the responsibility of all stakeholders in construction. There are three phases involved in creating a safe work environment: design, training, and enforcement.

Designing for safety takes many forms. The supervisor must design a good safety program for his area of work. Other supervisors must do the same for their areas. Each trade contractor must have an effective safety program for the workers in their company. The general contractor or construction manager must have a sound safety program for the project as a whole within which the trade contractor safety programs operate. More sophisticated owners also have safety programs that they impose upon their construction projects. This is particularly true on jobs that are located within an operating industrial complex or an ongoing business operation.

Designing for safety is also the responsibility of the project design team. Project elements can be designed in a fashion that makes them safer or more dangerous. For example, production that can be done in a controlled environment is typically safer than production that must be carried out on an open job site. Thus, an electrical engineer can design in such a way that electrical installation can be modularized with significant prefabrication in a shop environment rather than building the entire system in the field. Work that can be accomplished at grade level is safer than work at elevation. Therefore, if the structural engineer can design steel structural elements that can be easily assembled in the field with a minimum of field welding, risk to welders that do need to work high up and risk to those working below them can be diminished.

Design for safety also involves construction equipment manufacturers that are continually seeking ways to make their equipment safer to use in the field. Equipment safety also depends upon workers respecting the integrity of safety designed into the construction equipment by not altering safety features to try to gain perceived improvements in efficiency of operation.

Training is an ongoing process that also takes many forms. Craft training at the apprentice level should emphasize safe practices from the first day the apprentice enrolls in the craft program. Journeyman training is required any time new materials or equipment are to be used and any time new or particularly dangerous procedures are to be carried out. Retraining in the use of dangerous equipment or handling dangerous materials should be carried out on a routine basis and particularly if the equipment or materials have not been used recently.

Safety awareness is one of the most effective ways to improve the safety record. Training is very important in maintaining awareness of safety practices and procedures. Routine can be very dangerous if it allows workers to become complacent and to forget to be on safety alert. Periodic safety talks (known by many other names, such as tool box talks or tailgate talks) are a required part of any safety program, one of the reasons being to counter the negative effects of routine. Periodic safety talks are a safety tool that the supervisor needs to take full advantage of.

SAFETY 161

Enforcement is a primary responsibility of the supervisor. The best practice is to engage all workers in identification of safety infractions on the site, but primary responsibility for enforcement lies with the supervisors. Supervisors need to be continually cognizant, seeking out any unsafe condition or behavior and then taking corrective action. If one of the workers tells the supervisor of a safety concern about a condition or practice, the supervisor needs to respond quickly and positively to investigate the situation. A positive response will keep the worker involved in bringing safety issues to the attention of the supervisor. Any negative response could well set up a barrier to further involvement of the worker.

Craft workers can be engaged in enforcement by commenting to fellow workers when they see unsafe behavior. If a worker sees a coworker engaging in an unsafe practice, she can give a friendly reminder that “there may be a better way to do that.” Often it is the case that the coworker may not be aware that he is doing something that is unsafe and will appreciate the concern and friendly reminder.

Removing Job Site Hazards

Creating a safe work environment requires the elimination of job site hazards. This can be done in three steps: recognition, evaluation, and control.

Recognition involves identifying hazards in the work area. There are many ways to identify hazards, among which are the following.

Observation to detect hazards in the work area is the responsibility of anyone in the area. The supervisor and all workers should always be on the lookout for hazards. Such hazards might be associated with tools, with equipment, or with the physical environment. Examples of hazards that might be observed include improperly functioning equipment, a messy or congested work area, or temporary structures, such as scaffolds, that are unsafe or not built to code.

Monitoring is an important part of job site hazard detection. There are many devices that can be used to detect the presence of a danger. Air-sensing devices can detect many types of hazardous materials in the air. Decibel meters can detect when sound levels are dangerously high. There are many types of electrical devices that can detect dangerous electrical current or charges.

Discussion is also important in hazard identification. Workers involved in job site activities on a day-to-day basis often see hazards that they do not report or that they do not recognize as potentially dangerous. If the supervisor talks with workers about hazards that they might have seen or hazardous situations that might occur on the job, the supervisor will often gain information about the existence of these hazards that were not previously identified.

Once identified, the hazard must be evaluated. Three questions need to be considered for any hazard. How likely is a problem to develop out of this hazard? If a problem does develop, how destructive might it be? Finally, how imminent is the problem? The response to the hazard will depend upon the answers to these three questions. If the problem that arises is not likely to be destructive, then the hazard becomes low priority. If the problem is likely to cause significant damage but is not likely to occur, response to the hazard rises in priority, but not in urgency.

162 TECHNICAL SKILLS

If the problem will be destructive, it is likely to occur and it is likely to occur soon, the priority in responding to the hazard rises to the top and the response to the hazard becomes immediate.

When the decision is made to address the hazard the process is similar to the problem-solving process discussed in Chapter 8. A family of potential solutions is developed. Each is evaluated to determine how effective it would be if applied. The cost of the solution is evaluated. Side effects are identified and evaluated and mitigations explored. Finally, the hazard removal process is implemented.

There are many ways to deal with hazards. Following are listed some common means for mitigating hazards and an example of each.

Engineering controls can be used to constrain or remove the hazard. For example, if the hazard is a hole through which a worker could fall, a guard rail system could be designed and installed. Engineering controls can also be imposed by the design team, as discussed above, when the designer considers the relative safety of various installation processes in the design of the element.

Administrative controls put in place processes and procedures that will protect people from the hazard. An example would be to put in place a rule on the site that any flammable material must be stored in a specific location remote from people and from a potential ignition system, and with firefighting equipment immediately available.

Isolation separates the hazard from people or equipment that might either trigger a problem or be subject to damage or injury should the hazard cause a problem. For example, electricians practice “lockout-tag out” procedures on a switch that has been disconnected to turn off power to an otherwise live electrical line while an electrician works on the line. Lockout physically locks the switch in the off position. A tag out places a notice on the switch that it is not to be turned on until the tag is removed by an authorized person.

Substitution uses a different item that is safer in lieu of one that is a hazard. An example might be using a different, more appropriate piece of equipment to execute a task. A larger crane might be brought in to set a piece of heavy equipment at a considerable distance where the combination of weight and reach would be at the limit of a smaller crane.

Process change devises a different way to execute what would otherwise be a dangerous process. For example, it might be found that in excavating a deep trench by slopping the sides to prevent cave-ins, one of the sloped sides might approach an adjacent heavy structure that puts a surcharge on the soil that could overcome the protection afforded by the sloped trench side. Changing the process in the area of danger to use a temporary retaining structure or a trench box to protect against the surcharge would mitigate the problem.

Work practices ensure that the safest practice is used in all instances. For example, in working on a ladder, a worker might have to stand on the top rung to reach the highest work area. Standing on the top rung of a ladder is a bad work practice. A better work practice would be to ensure that a long enough ladder is available to be able to work from the top allowable rung (generally two below the top).

SAFETY 163

Training should be provided for any procedure that is not routine and commonly performed by the specific worker tasked with an activity. For example, if a worker will be using a type of power tool for the task that is new to her, she must be trained in the proper use of the that tool.

A great variety of personal protective equipment (PPE) is available to protect workers from a large variety or work hazards. The supervisor needs to ensure that the appropriate PPE is not only available, but it is used for a task that requires it. For example, protective goggles must be worn whenever there is any possibility that some contamination might enter the eye.

DEVELOPING A MENTALITY OF SAFETY

The other major cause of accidents on the job site, in addition to unsafe conditions, is unsafe behavior by construction workers. There are many effective tools that can be employed to improve the safety behavior of workers. A positive approach is best. This includes creating and maintaining awareness of unsafe practices and the dangers associated with them. It also involves rewarding safe behavior. However, sometimes enforcement is required in the form of reprimands and punishments, or even removal from the job. Chapter 6 provides some guidance and cautions when a supervisor needs to reprimand or remove a worker from the job.

Habitual Safety Practices

One of the most effective tools used to improve safety in construction is developing an attitude toward safety that is so strong safety becomes second nature. An example of such a habitual practice experienced by most people is buckling a seatbelt when getting into the driver’s seat of an automobile. This practice is taught by parents from a child’s early years both by example and by making sure children’s seatbelts are buckled every time before driving anywhere. Most adults feel so bound by the practice of putting on a seatbelt that not doing so is uncomfortable.

Buckling a seat belt is an example of a habitual safety practice. It is ingrained. It is done without thinking. It is part of life 24 hours a day, 7 days a week. It is encouraged by the individual for everyone else, especially family and loved ones.

One key measure of whether a safety practice has become habitual is if it is practiced at home, when no one else is watching. For example, standing on the top rung of a ladder is recognized as unsafe. New ladders even have notices that the top rung is not to be used for standing. If I have a ladder out working on a home project and decide to reach a little higher by standing on the top rung just this once, being very careful, the practice is not habitual!

Examples of safety practices on the construction work site that should become habitual include the following.

Safety orientation for new workers is so important that it is required by OSHA, and has become a feature of any construction safety plan. The likelihood of accidents is higher for workers who have just come onto the site than for workers who have

164 TECHNICAL SKILLS

been on the site for some time. This is true whether the new worker is an apprentice or a highly experienced journeyman. When first coming to a construction site, a worker should anticipate safety orientation and should look for specific information from the orientation, including:

General rules of conduct expected for safety on that job


Safety procedures for the site, especially emergency procedures

Hazards unique to this site

Periodic safety discussions (“toolbox talks”) have also become standard on construction jobs and should be expected by all workers. These talks maintain awareness of the importance of safety on the site and create awareness of specific dangers now existing on the site or associated with upcoming processes. These discussions should be used as an opportunity by both the supervisor and the workers to discuss current safety issues that workers might have.

Activity safety planning should be built into the planning process for all activities and tasks. Special emphasis on safety is given when an upcoming activity is particularly hazardous, such as the replacement of utility poles on an energized high-voltage power line.

Safety training should become automatic and be expected by workers when preparing to execute any nonroutine task or when preparing to use dangerous equipment.

Continual vigilance should be an engrained habit for any construction worker, both for their own work environment and activities and for those of workers around them.

Safety monitoring should be in place any time a monitoring device is available, or any time a condition might be present that could be detected by a monitor. If the monitoring device is not available, it should be requested by the worker.

Safety reporting is an important supervisory task related to keeping the daily log and developing any periodic job progress reports. Safety reporting should become a routine part of any worker’s daily regimen whenever an unsafe condition or behavior is detected.

Emergency preparedness is a very important part of habitual safety practices. When an emergency occurs, an expedited response is required. This means one must act very quickly in a controlled manner that has been predetermined. There is no time when an emergency occurs to figure out what to do.

There are many ways in which to develop habitual safety practices. Habitual safety practice should be taught starting on the first day a new worker enters the construction workforce. Apprenticeship training, formal or informal, should emphasize safety. Workers should be taught what to expect from the employer, but they also must be taught that safety begins with them. Individual workers must take primary responsibility for their own safety and then take responsibility for the safety of others around them. Safety discussions, safety signage, safe work practices, safe equipment and tools, and a safe working environment all contribute to development and maintenance of habitual safety practices.

SAFETY 165
Recognizing and Correcting Unsafe Behavior

People failure is at the heart of construction accidents. Those accidents that are not caused directly by human beings could have been prevented by human intervention at some point in the chain of events that led up to the accident.

Rules, regulations, and procedures that have been developed over the years to improve safety on construction sites should not cause individuals to lose sight of the fact that they need to take personal responsibility for their own safety. Safe behavior is the result of a safe attitude. With such an attitude, workers will say:

I take responsibility for my safety.

I want to make the workplace safe for everyone.


I appreciate safety comments and suggestions from others and I will learn from them.

We will work together to make our workplace safer.

Unsafe behavior is the result of either deliberate or inadvertent acts. A deliberate act might be based upon an attitude. For example, the worker feels he is not portraying himself as a “rough and ready” construction worker if he puts on PPE or has to get training on a piece of equipment. It also might be the result of not properly assessing the dangers of a situation, thinking, “I can get away with it this time.” An example might be that the worker thinks that he does not need to wear his hardhat in this situation because the situation is not dangerous, and the hardhat is uncomfortable and it gets in the way.

Deliberate unsafe acts cannot be tolerated without at least an informal reprimand. The response to the offense becomes stronger for repeated and more dangerous infractions, rising to the level of suspension or firing for the most egregious and dangerous violations.

Policies, either at the job level or at the company level, should lay out clearly what behaviors are not allowed and the response to such behaviors. All workers should be trained so that they clearly understand what behaviors are not allowed and the responses that misbehavior will draw. In the event such a behavior occurs, the supervisor must take on the role of enforcer and make sure the policies are enforced. Such enforcement must be consistent and carried out each time an infraction occurs. This consistency is important both to reinforce habitual behavior and to protect the supervisor and the company from possible legal action should a reprimand or suspension be issued in an inconsistent manner.

An inadvertent, unsafe act is often the result of the worker not hearing or not understanding what is required. When confronted with the inadmissible behavior, the response might be, “I thought that is the way I was told to do it,” or, “I did not realize this would happen.”

Inadvertent unsafe behavior is a systemic problem. To eliminate inadvertent unsafe acts, policies, and procedures need to be modified. This modification begins with a root cause analysis to determine what allowed the offensive behavior and

166 TECHNICAL SKILLS
then making a change to the system so that such causes are eliminated to prevent future problems.
EFFECTIVELY DEALING WITH SAFETY EVENTS

Supervisors must have a well-defined procedure to provide guidance when accidents happen. Any incident or accident should elicit an immediate response to determine if it constitutes an emergency. If it is an emergency, the emergency response procedure is triggered. If it is not determined to be an emergency, the event requires review. Based upon a determination of the urgency and severity of the event, the response will be different.

Immediate Response to an Accident

If the event is not urgent and does not fall into the category of emergency, any medical issues should be taken care of first. This may involve no more than the application of a simple remedy that can be applied on site so that the worker can return to work. For example, a scrape or minor cut may require nothing more than cleaning the injured area and applying a disinfectant and small bandage. A quick note can be made in the log and nothing more is required.

If there is any question at all about the severity or consequences of the injury, first aid may be required and medical assistance should be engaged. For less severe injuries, this may require a trip to the nearest urgent care facility. As the severity grows, the decision will need to be made to summon medical assistance. The safety plan that is in effect, either at the contractor’s level or at the project owner’s level, should include well-defined procedures for handling injuries and the supervisor should be very familiar with what they are.

In the event that the accident rises to the level of an emergency, the safety plan should have well-defined procedures in place. Emergencies require expedited response, not impulsive response. That is, response to an emergency should be swift and well thought out, not just quick without thought.

As a general rule, the first step in an emergency is to activate the emergency response system. On many jobs, this entails calling 911, but on larger jobs, especially those located on a campus, there might be an onsite emergency response team that is to be contacted in the event of an emergency. If the event involves structural damage or an unsafe work environment, the environment needs to be isolated and stabilized so that responders do not become victims. For example, in the event of a cave-in that has buried a worker, the excavation must be stabilized prior to trying to reach the injured worker so that a further cave-in does not injure rescuers, or further injure the victim. Once the site of the accident is stabilized, trained first aid providers can begin to stabilize and treat the victim.

While the site and injured party are being stabilized, concurrent activities should be carried out by others. Someone should go to an appropriate location to intercept emergency workers and lead them to the accident location. Others onsite should be

SAFETY 167

notified of the accident. Others offsite should also be notified, such as the worker’s home office.

Follow-Up Response to an Accident

If the accident results in a recordable injury, as defined by OSHA, a report must be written. In any event, an investigation should be carried out for any incident or accident with the objective of determining root causes and making adjustments to ensure that such an accident will not happen again. The primary objective is to determine root causes, not to place blame. If there is a person responsible for the accident, it will come out during the investigation and appropriate action can be taken. The objective of an accident investigation is fact finding, not fault finding. The purpose is to learn and make changes so that such safety-related events do not occur in the future.

SUMMARY

In this chapter, the following key points have been presented:

Safety is of fundamental importance to the construction supervisor.

Safety is important to all construction stakeholders for many reasons.

Accidents are very costly.

The supervisor has the dual responsibility to maintain a safe working environment and to eliminate unsafe behavior.


All stakeholders contribute to creating a safe work environment.

Each worker should develop habitual safety practices.

Well-designed and -practiced procedures need to be in place to address a safety-related event.

Learning Activities

1. Effectively using the toolbox talk

Regular toolbox safety meetings are a requirement on most jobs. Yet it is difficult to maintain interest and a sense of urgency in these meetings. They become routine and lose their impact.

Develop a list of means to maintain interest and a sense of urgency in toolbox meetings. Examples of means might include:

Make each talk relevant to the work the crew is currently engaged in.

Pass around responsibility for each meeting to different workers on the crew.

(continued)

168 TECHNICAL SKILLS

The product of this exercise should be a list of means to reinvigorate the periodic toolbox talks. It can be used by the supervisor as a guide in how the supervisor can transform these routine meetings into a vital and effective element of the job site safety program that will support safe behavior and a safe work environment. If provided to the company safety officer, it could become a part of the company safety program, disseminated across the various jobs, and could become a living document that can be continuously improved.

2. Developing an attitude of safety

A key responsibility of the construction supervisor is to cultivate an attitude of safety in the workers. Examples of an attitude of safety include:

I take responsibility for my safety.

I want to make the workplace safe for all.

I appreciate safety comments from others and will learn from them.

We will work together to make our workplace safe for all.

The objective of this exercise is to devise ways in which the supervisor can cultivate an attitude of safety in their workers.

First, expand the list of characteristics of an attitude of safety given above.

Next consider how these might be cultivated in workers. If other supervisors are available, this is a good team exercise.

Finally, develop a report to your company safety officer that summarizes the expanded list and describes how you intend to work on developing an attitude of safety among the workers on your site.

CHAPTER 10

THECONTRACTASA MANAGEMENT TOOL

INTRODUCTION

he contract is a very powerful tool that can be used by supervisors at all levels to more effectively manage their work. There are many misconceptions about contracts, especially held by workers in the field, such as:

It has little to do with field operations.

Legal training is required to understand it.

It is for the use of a higher entity to control my work.

The objective of this chapter is to dispel many of these myths and to enable the supervisor to begin using the contract as the very powerful tool it is to better manage and control their work. This will be accomplished by first providing a practical understanding of the contract, then by describing what the contract can do for the supervisor and finally, by laying out how to begin using the contract to exercise more control over the work.

An example copy of a commonly used agreement: ConsensusDOCS 750: Standard Form of Agreement between Contractor and SubcontractorTM is included as Appendix I and will be referred to extensively throughout this chapter. This example document has been chosen because it represents one of the newer forms of agreement; one that was developed over a considerable period of time by representatives of designers, owners, contractors, and subcontractors (the DOCS part

169

170 TECHNICAL SKILLS

of ConsensusDOCSTM). Being an agreement between the contractor and the subcontractor, it illustrates points relevant to supervisors in both categories.

A PRACTICAL UNDERSTANDING OF THE CONTRACT

A contract is a legal instrument. However, it is also a very useful tool to organize complex work into a manageable form. Although the legal ramifications of a contract cannot be overlooked, the intent of this chapter is to focus on the use of the contract as a management tool. The objective is to enable supervisors to understand enough about contracts so that they can use the contract to better control their job and so that they can recognize when contractual problems are arising that require the help of others more qualified in the use of contracts.

The contract accomplishes many things throughout the project. It establishes a business relationship between, or among entities engaged in the project. It defines the responsibilities of each of those entities and defines the scope of work to be performed by each. It sets forth quality standards for the work, either in terms of the end product itself or in terms of how the end product is to perform. It deals with many process issues, such as when work is to be done and how changes to the work are to be handled. It defines financial processes, including who gets how much money and when, as well as the processes regarding how that money is to be paid. It establishes the ground rules for execution of the project. It is intended to resolve problems, such as determining what happens when something unanticipated comes up and how to proceed when something goes wrong.

Much of what the contract deals with takes place in the field or is impacted by field operations. For example, ConsensusDOCSTM Section 4.5 defines responsibility for assigning lay-down areas. The location and size of lay-down areas is generally negotiated between supervisors in the field and has significant impact on field operations throughout the duration of the job, so it behooves the supervisor to know what the contract says about lay-down areas.

Sometimes the contract contains a number of different references relevant to a field situation. For example, communication protocols in the field are established by at least three references in the ConsensusDOCSTM. Section 3.6 states that the Subcontractor shall direct all communications related to the Project to the Contractor. Section 3.11 defines who the subcontractor’s representative is and states that this representative shall be the only person to whom the Contractor shall issue instructions, orders or directions, except in an emergency. Section 4.1 defines who the contractor’s representative is and states that The Contractor’s representative shall be the only person the Subcontractor shall look to for instructions, orders or directions, except in an emergency. These three, taken together, establish a very clear, strong, and specific line of communication in the field. This is clearly information any supervisor must have to properly manage the work and relate to other entities on the job.

Other important field issues dealt with in the contract include definition of safety requirements for all parties to the contract and establishment of responsibilities for planning and scheduling the work as well as for coordination among the trades, especially when the work site becomes congested.

THE CONTRACT AS A MANAGEMENT TOOL 171
Contract: A binding agreement between two or more persons or parties; especially one legally enforceable.

Merriam-Webster Dictionary

The key points of this definition are very clear: an agreement has been reached and each party will abide by the agreement.

Generally, contracts are in writing, but the basic definition does not require that they be written. Writing the contract helps to make it enforceable. If it is written, there is an expectation that the parties understand and agree to the same thing. Also, if it is written, it will not change over time unless modified by the mutual agreement of the parties. If a dispute arises, a third party could read a written agreement and help resolve the dispute, whereas if it is oral, it becomes a discussion of what one party or the other said or thought they heard.

Thus, written contracts are preferable to oral agreements. Even though oral agreements can still meet the basic requirement of the definition of a contract, an agreement between parties, it becomes very difficult to enforce an oral contract.

Oral contracts are often found in construction, especially in the informal environment of the work site. Since legal enforceability becomes a problem if the agreement is based only on the spoken word, it is advisable that all agreements, other than the most routine, be written out and signed by the parties. If an oral agreement is reached in the field it is good practice to confirm it in writing.

Field Authorization for a Change

Supervisors are often asked by the customer to install work different from what is shown on the drawings. For example, an electrical foreman might be asked by the general contractor’s superintendent to relocate an electrical panel in order to be able to accommodate a new opening in the wall where the panel was supposed to go. In this case, it is a simple task and can be accomplished fairly quickly and easily. The foreman, wanting to avoid confrontation, reassigns a crew to make the change.

Later, it is determined that there was some cost involved, primarily in terms of time to accomplish the work and disturbance to the crew that was already engaged in another activity. When the project manager submits a change order proposal that includes this additional work, the proposal is rejected because there is no documentation.

This is such a common field situation that a very common practice in the field has been developed to accommodate it. When a change to the work is requested, a field authorization form can be filled out and signed by both parties. This form was discussed in Chapter 4 and an example was given as Figure 4.4.The form has blanks to fill in that briefly describe the work requested, the requesting party, and the date and time of the request. Then the work can continue in the field. Later a new written agreement (contract modification) can be used to work out details, like payment for the additional work.

172 TECHNICAL SKILLS
REQUIRED ELEMENTS FOR AN ENFORCEABLE CONTRACT

To expand on the enforceability of the contract, certain elements are required for a contract to be enforceable.

Meeting of the Minds

Meeting of the minds, also referred to as mutual consent, is required to show that the parties actually have agreed on the same thing.

Offer and Acceptance

Offer and acceptance means that one of the parties has made an offer that has been accepted in whole by the other party. A counteroffer is not acceptance. It is a new proposal. In negotiating a contract, offers can go back and forth as many times as required to reach an agreement, but the agreement does not become a binding contract until one party accepts the other’s offer without exception.

Mutual Consideration

Mutual consideration establishes that there has been an exchange of value from each party to the other. The value exchanged does not have to be equal, but there does need to be some value exchanged and received on each side.

Performance

Performance or delivery establishes that the action contemplated by the contract must be completed. If the action(s) defined by the contract is (are) not executed, the contract is broken or invalidated.

Good Faith

Good faith requires that each party be honest and not attempt to deceive the other party. The purchaser of a Mustang believes he is buying a car, not a horse.

No Violation of Public Policy

No violation of public policy is allowable in a legal contract. Laws, whether federal, state, or local, prohibit some types of contracts, and hence, even though the contract has all of the elements enumerated above, it cannot be legal and enforceable if it runs counter to the law. For example, many cities require that construction projects over a certain contract amount be procured through the bidding process. A contract between the city and a contractor to execute a large project with procurement based upon a negotiated, rather than a bid, process would not be a legal contract.

THE CONTRACT AS A MANAGEMENT TOOL 173
COMPONENTS OF THE CONSTRUCTION CONTRACT

The construction contract is extensive and complex. It starts with the agreement, which is what many call the contract, but which is really only one of several elements of the contract. There are many standard forms of agreement used in the construction industry. Some of the oldest and most recognized are those published by the American Institute of Architects. Others are published by various organizations, like the Associated General Contractors of America, or the Construction Owners Association of America. More recently, forms of agreement for construction have been developed by coalitions of construction-related organizations with the expectation that an agreement developed by a broader cross-section of the industry will be less biased and more widely accepted. One such coalition involving designers, owners, contractors, and subcontractors has produced the ConsensusDOCSTM, already referenced in Appendix I.

In addition to the many general forms of agreement used in the industry, it is not uncommon for owners who engage in a significant amount of construction to develop their own forms of agreement. Many higher-level contractors also craft their own company specific subcontract forms of agreement. Furthermore, most contractors have such forms as purchase orders or field authorizations that become contracts when accepted by the other party, as confirmed by a signature.

Although supervisors are subject to project-level contracts, they rarely get involved in negotiating agreements at that level and often do not see them. On the other hand, they might use purchase orders to buy materials or field authorizations to document a requested change in the work. Thus, more often than not, supervisors do get directly involved with contracts of some kind or another.

Agreements at the project level generally start with a fill in the blank section that enables definition of the parties, the project, the date, and any other information relevant to a specific job.

The next section often defines the contract documents to be included within the contract for the specific job. Among those documents, in addition to the agreement will be:

Conditions of contract

Drawings


Specifications

Addenda

Modifications

In the case of a subcontract, one additional item is typically included in the subcontract documents that is very important to the subcontractor, and that is the prime contract that the contractor has with the owner.

Other common elements brought into the contract by reference in the agreement are codes that may be specific for a certain construction discipline or a general building code that governs overall construction for projects in a given geographic area. Finally, there is typically a place in the agreement that allows identification of other

174 TECHNICAL SKILLS

documents that will become part of this specific contract. All of these documents govern how the project is to be built, and, hence each is important to the supervisor. It is clear that the set of construction contract documents is very extensive and complex. These contract documents tell the supervisor what to construct and how the project will run. It is, therefore, very important that the supervisor has a complete set of contract documents for her/his portion of the project and knows how to read, understand, and use these documents. In the event the supervisor does not want the full contract or the supervisor’s manager does not want to provide the full contract, it becomes very important for the manager to provide the supervisor extensive information from the contract to support the work of the supervisor.

CONTRACT COUPLETS

It can be helpful in understanding an agreement to remember several things that go together. These will be called couplets.

Rights and Responsibilities

A major part of what a contract does is to define the rights, opportunities, and protections; and the responsibilities, obligations, and risks assigned to the parties. To the extent possible, the rights and the responsibilities need to be balanced. That is, if a responsibility is assigned a contractor, that contractor should have the rights that go along with that responsibility. If a risk is allocated to a contractor, the appropriate protections should also be assigned to that contractor.

Construction contracts are hierarchical. That is, there is a prime contract, with the owner, and then a series of subcontracts and sub-subcontracts that assign much of the work to lower-tier, specialty contractors. Often, a higher-tier contractor will write a subcontract such that the protections afforded by their contract remain with the contractor while the subcontract allocates as much risk as possible down the chain to a lower-tier contractor. When negotiating a contract, it is important, to the extent possible, to pass rights, opportunities, and protections in the higher-tier contract that relate to the responsibility assigned to the subcontractor through to the subcontractor.

For example, the contract documents, specifically the drawings and specifications, define the work to be performed by the subcontractor. The subcontractor has the responsibility to develop means and methods to accomplish this work. However, the work is not done in a vacuum. The ConsensusDOCS 750TM Article 5.2 recognizes the primary responsibility of the contractor to develop the project schedule, but it also affords the subcontractor the right to participate in development of the project schedule:

In consultation with the Subcontractor, the Contractor shall prepare the schedule for performance of the Work (the Project Schedule) and shall revise and update such schedule, as necessary, as the Work progresses.

Many contractors prefer to develop the schedule and hand it to the subcontractors. Sophisticated contractors have learned that, not only is it important to the

THE CONTRACT AS A MANAGEMENT TOOL 175

subcontractor to be involved in project scheduling, but it is advantageous to the contractor to maintain this right for the subcontractor.

Written and Unwritten Language

Contracts are long and complex, and there can be many problems buried within the contract. Those experienced in reading construction contracts recognize certain terms and phrases that raise a red flag as a problematic element of the contract. For example, one such term might be indemnification or the associated phrase hold harmless. The supervisor seeing those words might decide to refer this contract element to the project manager and ask for a simple explanation of what it means in the context of the current project.

However, words that are missing may be just as problematic, but much more difficult to detect. A missing word or phrase can significantly change the meaning and impact of a contract clause.

The effect of missing contract language can be illustrated by the following example. ConsensusDOCS 750TM Article 5.2 states that:

The Contractor shall have the right to determine and, if necessary, change the time, order and priority in which the various portions of the Work shall be performed and all other matters relative to the Subcontract Work. To the extent such changes increase Subcontractor’s time and costs, the Subcontract Amount and Subcontract Time shall be equitably adjusted.

The last sentence protects the subcontractor, so that in the event the project schedule is revised or day-to-day coordination is modified in such a way as to be detrimental to the subcontractor, the subcontractor can apply for and expect to be awarded monetary compensation and, if needed, additional time to complete the work without suffering loss. On the other hand, if the last sentence is removed, the contractor can micromanage the subcontractor’s work, causing a substantial increase of cost to the subcontractor without being liable to reimburse the subcontractor.

Helpful and Harmful Language

Some language in a contract is helpful to the party reviewing the contract and other language is potentially harmful. The negotiating process for a contract enables the parties to tailor the agreement, somewhat, to eliminate harmful language and include helpful language.

A typical clause that is debated in negotiating subcontract language is a contingent payment clause that makes payment to the subcontractor contingent upon something other than successful completion of the work. The contingency is often based upon payment received by the contractor. Subcontractors feel that contingent payment clauses are very harmful and they work hard to get them removed from the contract. Contractors feel that the protection of a contingent payment clause is essential to their company and work hard to make sure it is included. The contingent payment clause is a good example of helpful and harmful language,

176 TECHNICAL SKILLS

because it represents helpful language to the general contractor but represents harmful language to the subcontractor.

READING THE CONTRACT

A construction contract can be quite daunting to someone who has never read one before. However, contracts are typically written in plain language and, with some study, much can be gleaned from the contract by construction professionals other than lawyers. Once one becomes reasonably familiar with a commonly used agreement other agreements become less daunting because construction contracts tend to deal with the same issues and have common patterns and use common terms. To illustrate commonly found contract sections, references will be made to ConsensusDOCS 750TM, which will be found in the appendix.

A checklist can provide valuable assistance in reading contracts. An example of a checklist is provided in Figure 10.1. This checklist can be used to provide initial help

Contract Checklist

Who is your contract with?

What type of project delivery system is defined?

What is the pricing basis?

If other contracts are incorporated, which takes precedence?

What lines of communication are established?

What procedures are established for:

Requests for Information

Field authorizations

Notifications

On site material storage Who is responsible for scheduling and coordination? What safety requirements are established for this project? Who is responsible for cleanup? Are there liquidated damages?

Figure 10.1 Contract Checklist
THE CONTRACT AS A MANAGEMENT TOOL 177

in reading a contract, but as the supervisor becomes more familiar with contracts, she will want to modify this standard checklist to create a personalized checklist.

The first section of an agreement will typically have a number of blanks that allow the specific project and the parties to the contract to be identified. It also allows for entering other information like the contract date. This is found in Article 1: Agreement in the ConsensusDOCS 750TM.

The next section typically defines what comprises the full set of contract documents (as described in a previous section). In the event of a subcontract, this section will often deal with several issues in the prime contractor/subcontractor relationship. For example, it is highly likely that in merging two complex contracts, there will be instances when they are in conflict with one another. The subcontract will often define which governs: the prime contract or the subcontract in the case of such a discrepancy. Article 2.4: Conflicts in the ConsensusDOCS 750TM has such a statement.

The ConsensusDOCS 750TM addresses another very important aspect of the prime contractor/subcontractor relationship, this time in Article 2.3: Subcontract Documents. It gives the subcontractor the right to obtain a copy of the prime contract, since the prime contract is now incorporated into and becomes a part of the subcontract. This is an essential right to be protected by the subcontract since contractors are very reluctant to give a third party (the subcontractor) a copy of their contract with the owner. A version of this clause is discussed in more detail later in the chapter when dealing with proper use of the contract to better manage the job.

The next sections typically define responsibilities of the parties. For a subcontracting situation, the first section often deals with mutual rights and responsibilities and it will often incorporate a flow-through or pass-through clause that has the purpose of flowing through the rights and obligations that exist between the prime contractor and the owner to the relationship between subcontractor and the prime contractor. This is found in Article 3.1: Obligations in the ConsensusDOCS 750TM. If properly written, this flow-through clause can be of significant benefit to the subcontractor. However, if the subcontract is written by the prime contractor rather than using one of the more general forms, the flow-through clause often flows down to the subcontractor as much risk as possible, retaining as many protections as possible for the prime contractor. This type of flow-through clause is detrimental to the subcontractor.

Again, for a subcontract, there will be a section that defines the responsibilities of the subcontractor with respect to the contractor. This is found in Article 3: Subcontractor’s Responsibilities in the ConsensusDOCS 750TM. This section lays out in detail what the expectations are for the subcontractor. It deals with issues such as safety, coordination, and the responsibility of the subcontractor to supervise and direct the subcontractor’s work.

There is also a section that defines the responsibilities of the contractor. This is found in Article 4: Contractor’s Responsibilities in the ConsensusDOCS 750TM. This is of critical importance to the subcontractor’s supervisor, because it deals with many common field situations, such as lay-down areas, terms of notification in the event of unacceptable work, and project scheduling and coordination.

178 TECHNICAL SKILLS
USING THE CONTRACT

As just seen, a great variety of field situations for which the supervisor is responsible are dealt with by the agreement. Many of the chapters of this book deal with topics that are critical to the supervisor that are also addressed in the contract. Among them are:

Safety


Communication

Planning and scheduling

Cost control


Managing production

It is imperative that the supervisor know and understand what the contract says about these and other field issues. Knowing and using the contract to supervise the job will support success for the project. On the other hand, being unaware of, or unknowledgeable about, the contract will be detrimental to the success of the project and will impair the ability of the supervisor to successfully plan and execute the work.

Proper use of the contract requires action. The contract cannot effectively be executed in a passive way. For example, the contract provides the parties rights, opportunities, and protections; however, it does not impose these upon either party. One must exercise the rights given or they go away. To illustrate, AIA Document 401 – 1997: Standard Form of Agreement between Contractor and Subcontractor developed by the American Institute of Architects protects the right of the subcontractor to have a copy of the prime contract since it is incorporated into the subcontract. On the title page, it states that “A copy of the Prime Contract . . . has been made available to the subcontractor.” In Article 1.4, it states: “The subcontractor shall be furnished copies of the Subcontract Documents upon request.” The subcontractor must “avail herself” of the right to have a copy of the prime contract. The subcontractor must request a copy of the subcontract documents (which include the prime contract) from the contractor. Supervisors must understand that they are required to take action to exercise or protect their rights. They do not automatically happen and can go away if not exercised.

Properly Using the Contract

Proper use of the contract involves several steps. First a copy of the contract or relevant parts of the contract must be available to the supervisor. Lower-level supervisors, those at the foreman level, generally do not have, and do not want to have, a complete copy of the contract. However, if they know what contracts generally deal with, they can ask their supervisor to provide specific information on what the contract for this project says about critical situations that affect their work. On the other hand, it is important for higher-level supervisors and managers to

THE CONTRACT AS A MANAGEMENT TOOL 179

make sure that lower-level supervisors have all of the relevant information provided by the contract and that they understand how to use that information.

Second, the supervisor must be familiar with contract requirements for the specific job and understand what the contract means. Having the contract or specific elements of the contract that are relevant to the foreman’s responsibility does no good if the language is not understood. The supervisor must not only understand what the contract means but also understand how to use the terms and conditions of the contract to better manage and control the work. Part of supervisory training should focus on practical use of the contract in the field.

Third, the supervisor must be able to assert rights provided by the contract. This assertion must be in a nonconfrontational manner. Supervisors must be able to ask for the rights provided and resist requests or directions that are contrary to the contract. This may be through the use of standard company forms and procedures, such as the use of a company field authorization form to document additional work requested by the customer. It might also involve negotiating or bartering. Bartering is of fundamental importance to supervisors and can be demonstrated by the following example.

Bartering to Protect Value Provided by the Contract

In Section 4.5, dealing with storage areas (lay-down areas), the ConsensusDOCS 750TM says: Unless otherwise agreed upon, the Contractor shall reimburse the Subcontractor for the additional costs of having to relocate such storage areas at the direction of the Contractor. When asked to relocate the lay-down area, the supervisor can request a field authorization to provide the documentation for a change order to get the reimbursement provided by the contract. However, contractors often do not like to pay for such things so instead, the subcontractor’s supervisor can refer to section 3.25, which says: The Subcontractor, its agents, employees, subcontractors or suppliers shall use the Contractor’s equipment only with the express written permission of the Contractor’s designated representative and in accordance with the Contractor’s terms and conditions for such use. If the subcontractor’s supervisor responds positively to the request to relocate the lay-down area and then asks to use the contractor’s crane the following week for an hour to offload a heavy piece of equipment, the contractor’s representative would be hard pressed to deny the request after just requesting and receiving something of value from the subcontractor’s superintendent. Such a request will generally be approved, and the supervisor has earned the value provided in the contract for relocation of a lay-down area while avoiding confrontation and also avoiding a great deal of paperwork and further negotiation down the road.

Functions of the Contract

In discussing use of the contract, it is very important to keep several functions of the contract in mind. One function of the contract is to provide guidance in the event an unanticipated or unknown situation arises, or in the event that something

180 TECHNICAL SKILLS

goes wrong. For example, contracts specifically assign responsibility to keep the project clean. This is normally the responsibility of the specialty contractor for work performed by that specialty contractor. Sometimes, the prime contractor will find that the workplace is not kept clean. The ConsensusDOCS 750TM Article 3.13.2 addresses this, as follows:

If the Subcontractor fails to commence compliance with cleanup duties within two (2) business days after written notification from the Contractor of non-compliance, the Contractor may implement appropriate cleanup measures without further notice and the cost thereof shall be deducted from any amounts due or to become due the Subcontractor in the next payment period.

Such a clause protects the contractor from the situation where the subcontractor does not perform as agreed upon in the contract. However, the notification requirement also protects the subcontractor from the situation where the contractor perceives a deficiency and takes action to make good that deficiency without notification to the subcontractor giving the subcontractor an opportunity to correct the deficiency or explain why he believes it is not a deficiency. This subcontractor protection should protect the subcontractor from blind back charges from the contractor.

Notification is a particularly useful example of protections provided by the contract. The supervisor must be aware of what the various terms of notification are. They relate to such areas as cleanup and nonconforming work. When notified, he must take two actions. First, he needs to immediately begin to deal with the cause of the notification. Second, he must inform the main office that a notice has been received, so that the main office is aware of a potentially damaging situation that might be coming up if not addressed in a timely fashion.

Another function of the contract is to assist the parties in interpreting what the contract itself means, should there be ambiguities. An example of this is found with the flow-through clause that was discussed above. The purpose of a flow-through clause is to tie together two very complex contracts found in the hierarchy of contracts underlying a construction project. It is likely that instances will arise when a subcontract and a prime contract, tied together either by incorporating the prime contract into the subcontract by reference or by use of a flow-through clause, are in conflict.

A common statement found with most flow-through clauses defines which governs in the event of a conflict between subcontract and prime contract. When a conflict arises in the field in which the contractor’s superintendent refers to the prime contract, and the subcontractor’s supervisor refers to the subcontract, it is important to know which governs. The first thing to do is to see what the contracts say. In most cases, they will have a clear statement that resolves the conflict. For example, ConsensusDOCS 750TM Article 2.4 states that:

In the event of a conflict between this Agreement and the other Subcontract Documents, this Agreement shall govern.

Thus, ConsensusDOCS 750TM establishes that the subcontract governs in resolving a discrepancy between it and any other contract on the project.

THE CONTRACT AS A MANAGEMENT TOOL 181

In the event that there is no clear statement, there is legal precedent that holds that the stronger contract is the one that is closest to the situation, or the one that both parties have signed. Hence, if no clear statement occurs in the contract documents, the subcontract takes precedence over the prime contract in the event of a conflict.

It should be noted, however, that even though there is legal precedence, a well-written contract will recognize when a conflict is likely to come up and make a clear statement. It should also be noted that legal precedence can be overturned by a specific statement in a contract. Thus, if the contract says that the prime contract governs, the legal precedent is overruled in this case and the prime contract governs.

Finally, a fundamental purpose of the contract is to avoid and resolve conflicts, not to create and foster conflicts. Supervisors must know what is in their contract (and other related contracts incorporated by reference) and must be able to negotiate based upon that knowledge. However, it is easy for discussions about contracts to become emotional with tempers flaring. It is very important that this does not happen. If supervisors reach a point in the discussion where they wave the contract in the face of the other party and yell, “I will see you in court!” the situation is lost and no party wins. The contract should be used to avoid confrontation and avoid litigation. If supervisor becomes emotionally involved, they must hand the situation off to another and step out of the discussion.

In terms of resolving conflicts, it should be remembered that contracts deal with the strength of a legal position. In evaluating a situation based upon what the contract says, the consideration is who is in the stronger position and who is in the weaker position. Contracts are not about right or wrong. They are not about good and evil. They are about being supported by the contract or not being supported by the contract.

In working to resolve a situation based upon the contract, the question the supervisor needs to consider is: Am I in a stronger legal position or a weaker legal position in this situation? If I am in a stronger legal position, I have the option to exercise my contractual right, or I may decide that it is not worth the time, the money, or the potential damage to the relationship with the other party to pursue my rights. If I am in a weaker position, my option is to cut my losses and not throw good money (or good will) after bad. Drop the discussion. Execute what is required and get on with the job.

SUMMARY

In this chapter, the following key points have been presented.

The contract is a very powerful tool for the supervisor.

The agreement binds together a complex set of construction documents into the construction contract.

182 TECHNICAL SKILLS

Supervisors at all levels can benefit from a working knowledge of the contract governing their work.

Oral agreements need to be followed up in writing.


Using the contract requires action. Rights, opportunities, and protections can be lost if not used.

Contracts determine a stronger or weaker legal position. If you are in a stronger legal position, you have options. If you are in a weaker legal position, the option is to cut your losses.

Contracts are meant to remove conflict, not create conflict.

Learning Activities

1. Using the contract to protect a right

One of the most common abuses of subcontractor rights is for the prime contractor superintendent to provide an unsuitable lay-down area to the subcontractor and then to require the subcontractor to repeatedly move materials to another location. The objective of this exercise is for a specialty contractor supervisor to gain an advantageous lay-down area initially and to recover costs of later moves. The current situation is that the prime contractor superintendent has assigned an inadequate lay-down area initially and then will require you to move your materials to another lay-down area throughout the project.

From the point of view of the specialty contractor, review relevant contract clauses in ConsensusDOCS 750TM that provide the right to a suitable lay-down area and to reimbursement for movement from that area. List characteristics of what you consider a suitable lay-down area. List options available to you to collect the value promised for moving your lay-down area. Finally, prepare a case in two parts as the basis from which to negotiate with the prime contractor for your initial lay-down area and for your right to reimbursement for subsequent moves. Part 1 will cover the negotiation for the initial lay-down area. Part 2 will prepare you for negotiations when asked to relocate your lay-down area.

2. Participation in planning and scheduling work

The supervisor can exert considerable control over tactical (within a limited time frame) work scheduling through active participation in weekly coordination meetings. The objective of this exercise is for a specialty contractor to use your contract rights to give you better control over short-interval planning of your work. The current situation is that the prime contractor unilaterally assigns work based upon his schedule and priorities.

From the standpoint of the specialty contractor, using ConsensusDOCS 750TM contract clauses relating to scheduling and coordinating the work, review the relevant clauses giving you the right to participate in planning and coordination and the

THE CONTRACT AS A MANAGEMENT TOOL 183

responsibility to plan and coordinate your own work. Identify benefits to all participants to jointly plan the work. Identify loss to the job of not jointly coordinating the work. Define what you need in order to be able to effectively plan your own work. Finally, prepare a case from which to negotiate with the prime contractor to secure the right to plan your own work and to participate in planning the coordination of other work activities that have an impact on your work.

 

 

 

 

 

 

 

 

 

 

 

 

 

Share it now!
150 views

Add a Comment

Your email address will not be published. Required fields are marked *