Grading and Excavation Contractor

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We need to be in control of our projects—before, during, and after.

By Paul Hull

Time is an essential element in any excavation or grading project, or in any work that involves those areas of expertise. We win a contract; we are offered a job … and then? To be thoroughly professional and profitable, our work begins before we win the contract, doesn’t it? We must know, before we give the potential customer our quotation, how we will make money at that price. We need to know what could go wrong, especially once the work has begun. Before the work starts, we need to know what could cause delays or make the job unprofitable, so that we are ready for any setbacks. It could be late delivery of equipment or materials, machine breakdown, employees not showing up, perhaps another contractor failing to meet the schedule in some way, or an unexpected increase in the cost of essential materials. If we know beforehand what aspects could go wrong, we will be better prepared to take corrective action if they do go wrong. It isn’t practical to rely on our (often inaccurate) memories of similar projects or to accept that ... well, things are bound to go wrong at some time, aren’t they?

There are good, proven ways to stay on top of real (and possible) problems. “There’s an algorithm known as the critical path method (CPM),” advises Dann Kroeger, chief executive officer of HeadsUp Technologies in Overland Park, KS, a company whose commercial contractor software puts estimating, bidding, scheduling, document management, project management, field data capture, and financial information into one integrated, easy-to-use Web-based system. With it, contractors can access their projects from anywhere at any time with a Web browser. “This critical path method will rely on the relationships between activities and durations to identify the critical path for your project. It will identify activities that, if not completed on time, will extend the project completion date.”

We all know what time extension could mean: loss of profit. CPM, developed about 50 years ago by DuPont to manage the maintenance of its chemical plants, will provide a graphical view of the project, predict the time required to complete it, and show which activities are critical to maintaining the schedule and which activities are not so critical. The real significance of the critical path is that any activities that lie on it cannot be delayed without delaying the whole project.

Most construction jobs are done by contractors with few employees, even those projects that are listed and publicized as organized by Huge & Hefty Contracting Inc. In practice, the work is often done by several (or many) subcontractors, and they may not know each other or know the details of the entire project. Your construction site can be an assembly of people who don’t know each other, and they have no foolproof way to communicate with each other. Industrial observers have said that the construction industry could be much better organized, more efficient, more cost-effective (for both owners and contractors) if it would just climb away from its medieval practices. No, we don’t like being criticized as the dinosaur of American industry, but recent events (in Boston, Oakland, and Minneapolis) have shown that there must be better ways to achieve the owners’ goals than traditional, never-changing methods.

Some project management for grading and excavation contractors can, indeed, be planned and monitored with a ballpoint pen and paper on a clipboard. If your project is simple, if you simply have to grade that piece of ground on Washington Street or the residential lot out on Buckingham to certain specifications, there should not be many obstacles that interfere with your success … except delays caused by other contractors. You’ve done similar work many times and you know what to look for. You may use laser systems for machine guidance already, and they could be perfect for completing your grading job successfully. (You would be amazed what huge percentage of contractors trying to squeeze the maximum profit from each job do not use such proven assistance.) When you look at the site for potential problems, you are, in fact, checking on the critical path.

Could This Apply to Me?
“Sticky notes on folders and whiteboards get lost, file folders end up on the wrong desks, and whiteboards can get erased,” we are reminded by Harry Hollander, president of Moraware, a maker of scheduling and job management software for subcontractors. JobTracker is one of the company’s well-used programs. “Job management software gives instant access to up-to-date job information for everyone who needs it,” he says. “If you’re the only person in your business, it’s possible you may keep everything in your head. But, as soon as there are multiple people in your company, it’s really hard or impossible without software.” Hollander points out that companies using computers to automate their operations have a way of doing things that can grow with their business, become more efficient without too many employees, and make sure that no one person can hold back growth. “No matter the size of your business, all the benefits of having a great process and automating it make sense for you to stay competitive, for your employees and customers to be happy. You may even take a few weeks of vacation without coming back to a giant mess. Scheduling and job management software lets you delegate work and helps you have a sane business that can grow at the pace you choose.”

Let’s repeat it: Most construction-related work is done by small contractors. There are about 700,000 construction companies and 7,000,000 construction workers. They cannot afford delays; they tend to do projects one at a time; and they have no room for mistakes. If they are held up at the current project, they may have nothing to do for several days, and that means no source of income.

The concepts of project management can be described in everyday terms, but don’t imagine that programs and software designed to make that management quicker and more reliable are just newfangled, expensive methods that will not be appropriate to your work. If your projects are simple, uncomplicated actions, you may not need sophisticated software to manage them. It does not make sense to struggle with technologies that can take more time than you care to spare, cover more than you require, just because your company thinks it should or just because you met somebody who works that way. If, however, there are complications possible—those items on the critical path—you should consider using project management software to smooth the way. It’s most likely that you will need perfect project knowledge if your company is part of a bigger project, if you are a subcontractor dependent on the efficiency and proper communications of other contractors.

One of the factors that has made project management more complex is that some individuals and companies seem to have changed its definition. In grading and excavation work, we usually agree on the scope of a project. It is a single job. When we talk about project management, we are usually talking about one job. Not everybody sees it that way. For some, project management could include the whole marketing concept of a project, or it could refer to a series of projects (as we know them). For others, project management concerns keeping the running of an office or business on top of appointments, meetings, conferences, or deadlines for promised work, but not for the schedule of a grading or excavation project. Some contractors with whom we have spoken have noted that there are outside advisers and vendors who include far more in the project software than is necessary. That would certainly make the entire management technique more complex (and expensive). In your research for “project management software” you should know what you are looking for, know which aspects of your work you wish to manage better, but be aware that you do not want a cluttered or complicated set of charts with little relevance and considerable time required for their understanding.

Who Is Supposed to Do What?
“Analyze the resources required to complete each activity in the project,” says Kroeger. “In this way you will know who is responsible for successful completion of the activity and who should be told if there are system alerts or warnings.” Workers should know what they are expected to accomplish and in what time frame. You should also know, every day, how it is progressing.

Greg Duyka spent more than 20 years in contracting and now works with OnCenter, a provider of software for contractors. “I was not enthusiastic about using computer-based information at first, because I thought it would be too difficult and too complicated,” admits Duyka. “It took me three days to realize that I was wrong. I learned how to use the program much more quickly than anticipated, and I soon saw how much time and money it would be saving for take-offs. When you think of what you may spend in a year for subscriptions to services, mail, paper handling, delivery, and all those items, you understand how electronic take-offs, for example, can save you a lot of time and a lot of money.”

Other users agree with him. They were apprehensive about the true value of electronic help until they started adding up what they really spent on more traditional methods. Perhaps this is the best place to start when you are considering the use of more sophisticated project management tools: What does it cost me now to keep control?

The main objective of Digital Production Control from OnCenter is to stop labor cost overruns from blowing your profits away. This program compares instantly the estimated labor budget with the work in place to establish color-coded drawings that show exactly where, what and how fast materials are being installed. It will show estimators, owners, and project managers if they are achieving, outperforming, or lagging behind the estimated production rates. The information can be sent, via the Internet, to your office. The automatic display (in red) of failing labor productions helps the project manager identify immediately any snag in production and to see exactly what is happening in the field. The information is, of course, useful for estimating future projects. “Knowing outsells guessing every time,” says Duyka.

In the second paragraph of this article, an “integrated” system was mentioned. Such a system of project management combines (integrates) into a single system the elements that are sometimes presented to contractors as separate (and, often, unrelated) tools. If you were integrating scheduling functions, for example, you would use the CPM algorithm to identify the critical aspects of the job. You would also analyze the resources needed for finishing successfully each activity in the project and note who is responsible for each activity. You would study the budget and be able to forecast what effect late completions would have on the cost. You would be aware of the documented deadlines for activities and be able to adjust them if necessary as the project progresses. In other words, with an integrated system of information, you would be able to compare daily progress with scheduled progress. You would know, every day, how you are doing because you would have all the relevant information in one system, available anywhere, rather than in several systems that may be excellent for their individual areas but are not linked to provide the complete picture for the user. It’s a word worth remembering when you are investigating software: integrated.

An example of the advantages of an integrated system can be seen in its use by Signature Construction LLC, a division of Pedcor Companies that operates in several Midwestern and western states of the US. What Signature discovered was that its traditional client/server project management software was expensive to maintain and did not allow field access to the schedule or documents. The company needed an excellent connection between office and field, along with more practical meeting documentation that could be distributed to the whole project team. With the HeadsUp software, the contracting company received Web-enabled, integrated software that did not require onsite staff or equipment. The field supervisors could capture the relevant construction site activity daily, with all documents and schedules readily (and automatically) available in the field where the work was being done. The remoteness of the job site did not matter; the access was available anywhere and at any time.

As a result, Signature managed 19 projects from home base in Carmel, IN—projects that were in Indiana, Ohio, Nebraska, Tennessee, Missouri, and Michigan. Thirty-nine of Signature’s staff and five project managers have access to the information they need, when they need it, while 10 design team members can communicate efficiently with those in the field.

Contractor Compatibility
“Even if you’ve never used a computer before, you can use PlanSwift,” observes Heber Allred. That is certainly a comforting start for many contractors, especially those of use who were not weaned on computers, software, hardware, bits, bytes, and gigasomethings. PlanSwift comes from Tech Unlimited Inc., in Henderson, NV. It is described as an easy-to-navigate construction take-off and estimating software program that allows users to work on, manage, and share scanned or CAD blueprints right from your computer to generate estimates and takeoffs.

“The key for was to create an estimating program that could be used by anyone in the field, regardless of their computer skills,” notes Fred Meade, vice-president of Tech Unlimited, Inc. “We know that people in the field usually don’t have the time to learn complicated software programs, so we put everything we had into making takeoff and estimating simple.” Among the components of PlanSwift is the ability to calculate the cost of labor and materials in seconds, using customizable assemblies and material lists with the program’s built-in Excel-like formulas.

“Online project management has given the construction industry a more efficient method to secure and perform work,” observes Jon Antevy, chief executive officer of e-Builder Inc., headquartered in Plantation, FL. “Companies who want to differentiate themselves on negotiated projects or build repeat business with good customers are getting results from Web-based communication systems. Available communication/management tools make it possible to speed up the time it takes to obtain the necessary approvals, design and construct projects, reduce or eliminate claims brought against the project team, communicate specific progress information to keep the public informed, control cost, and manage those critical project milestones.”

An excellent point made by Mr. Antevy is that it is now the owners of projects who are demanding the use of online project management systems; five years ago it was the contractors leading this development. Today the trend seems to be for contractors to adapt to the owners’ systems. Owners have realized that logging into multiple project Web sites was inefficient and sought remedies.

“Online project management systems now help owners manage their projects earlier in the process,” explains Antevy. “When contractors led the industry in the use of those systems, it made sense that most implementations took place during the construction phase. This is not the case any more, not since owners have taken the lead. During the planning process, there are multiple parties who need to be involved. Users of the facility convey their requirements to the architectural staff, where conceptual designs are produced. Working in parallel are the budget keepers, ensuring that the costs do not exceed a specified amount.” All this means that those who continue to use traditional communications means and outdated management tools will experience missed deadlines and cost overruns. This sector trend to online project management systems should be investigated carefully because, without a role in the system, we could miss contracts, deadlines and jeopardize not only the growth of our businesses but their very existence.

Another leading player in the field of project management is Meridian Systems, based in Folsom, CA. Phoenix 7 Group represents Meridian, and we spoke with their expert, Steve King, in Wyoming. We asked him if he worked with contractors for the use of Prolog WebSite (Meridian’s program) in the northwestern region of the US that he covers. “About 75% of my customers are contractors,” notes King. “Some are very big; some are not all that big. They understand that Prolog WebSite, which complements Prolog Manager as a Web-based collaboration application, will connect project team members to one another and to the images, documents, and database information they need in real time.” Among those thousands of customers for King and Meridian are companies like Skanska USA, Kiewit Construction, Dawson Construction Inc., the University of Washington, Unimark Construction Group, Fisher Companies Inc., and Pri-Met (Portland).

The benefits of working with a system like Prolog WebSite could be listed somewhat like this. You can access accurate, complete project information and reports from anywhere in the world (even if you’re lucky enough to be on that vacation mentioned by Hollander above). By collaborating more effectively with project participants, you can reduce project schedules. You can standardize your company business practices using powerful Web-based collaboration. Perhaps most significantly for many contractors, you can improve document control by streamlining the review process, easily tracking revisions and storing master files.

Considerations for Contractors
In a recent interview with Kristine Fallon, founder of Kristine Fallon Associates Inc. (KFA), which has a successful history of helping construction companies to select and implement project management technology, she said that critical factors for a successful project management system implementation were to do the right thing and to do it right. “Doing the right things means focusing on the system features that will deliver the greatest benefits to you,” observes Fallon. “Doing it right means taking steps to achieve a flawless rollout. These steps include complete and correct configuration of the system modules; two-way communication with stakeholders; thorough testing; a rollout schedule aligned with project schedules; documentation that shows individuals, step by step, how to do their jobs using the system; and a training program that is similarly structured.” How important is the training? “If you are not going to train and support the teams that will be using your PM system, you shouldn’t waste your money buying one,” asserts Fallon. “As much as possible, train project teams just before they start the project, and do not allow untrained staff access to the real project data. We recommend training each person to use the software to perform his or her specific job.” Because it is normal that there are ongoing team mobilizations and project closeouts, as well as individuals joining and leaving project teams, you can anticipate that training will be ongoing, but it can be delivered cost-effectively.

Whenever we discuss new technologies we always come to the question: Will it work for me in my specific projects? With project management programs, the answer is that having up-to-date programs to stay in touch with everything on a project will put us in a position superior to those competitors who are content to keep on doing everything the old way. Consider another big industry in the US, the car industry. Years ago the parts were made in many separate, small shops (like the many subcontractors in a big project?), but Mr. Ford adopted the assembly line and the whole industry advanced dramatically. We have not seen that advance in our industry, not to any significant effect. It is possible, even probable, that methods like online project management systems are our assembly line advance to bigger and better results—even for us small companies, because we are so often part of a bigger plan.

Paul Hull writes on construction topics for several magazines.

GEC - February 2008

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