You know, we talked about bidding. How do you go about selecting contractors? Typically, you start off with obviously pre-qualifying, and depending on the size of your firm, you can have some really, really aggressive and onerous pre-qualification methods. Because, let's face it, this risk is associated with bringing in contractors or subcontractors are not properly qualified for the work that you're selecting to do. Make sure throughout the entire bidding process. Once you get through the prequalification process, of course, that the documents, the bid, the drawings, the design docks, the sketches, anything that changes throughout the bidding process. Make sure that everybody is aware, and they're all bidding across the same level of design, if you will, for lack of a better term. Because, otherwise, you won't be able to create an intelligent apples to apples comparison between the projects, and let's face it, it doesn't always work as simple as that. We're all aware of the fact that, in some cases, you have a contractor who is at x and you have a contractor who is at 2x, and you're trying to figure out, why? Okay, that why I say minimally three because, if you only have two bidders on a particular project, you could have the contractor who's at x, the contractor who's at 2x, and you're like, okay, who's right? Did z screw up, or did 2x screw up? Some cases a third bidder will give you a pretty good indicator where the real numbers lie. It could be the middle, it could be either one of those two conditions. Make sure there's a clear understanding of scope and the contractual requirements. A few slides back, I talked about project specific requirements, hours of operation, the logic of the schedule. We talked about the access in and out of a site. Make sure that the logistical aspect of the project is well-documented, so people are aware as to how are they gonna get in and out of the building, what are their restrictions in making deliveries and that sort of thing. Again, I just put it there for the sake of repeating myself sometimes. Be fair and honest, make sure that everybody has the same level of information. One of the things to keep in mind is, it's kind of awkward sometimes, and I've done it, I felt guilty as sin. Is the fact that you drive somebody to be the local bidder, and then you don't give them the job, okay? Not a fair and honest thing to do. It's not fair in pushing this contractor to rework the numbers to expose their firm to more risk, to thinking that they're gonna get the project and then you pull the rug from under their feet, to the point where they walk away empty handed. Inspite of the effort, and keep something in mind, when contract is at bidding, okay, it takes a lot of resources to put together intelligent bid. Between the estimater, hopefully the project manager, hopefully the superintended, hopefully the director. The input put in there, it's expensive to bid a project So to drive somebody down to the point where they think they're going to get the job and then pull the rug out from under their feet is obviously wrong. Documentation, documentation, documentation, goes without saying, okay? Verbal agreements are sloppy, unreliable and quite honestly they mean absolutely nothing. If you don't follow up With the proper memo, with the proper meeting minutes whatever the case might be to memorialize what was discussed at a particular conversation or a big walk through whatever the case might be. Certainly, come back and could very well do some serious damage done online, and last but not least, maintain a level of confidentiality. Leaking out the numbers, and I know some people use it as a form of strategy to get lower numbers. Is honestly, it's neither fair nor honest to leak one contractor's numbers out with the hopes of taking of driving another contractor down to go meet those numbers. I think we touched on contractual requirements, we touched on scheduling, we touched on logistics and planning, we touched on bidding. What are some of things to, let me just The back. And going back to my original slide about managing risks, one of your key tools in managing risk is insurance. Okay? Because it can cover a lot of risk and can protect your firm. It can protect the owner. It can protect yourself. It protects the workers on a job site. Okay? We all know what general liability is. Okay. It covers basically screw ups. Faulty installations. Failure to meet certain obligations, damaged throughout the construction process. Workman's comp aids basically to protect your trades. The people out in the field. And not just the field, the people also in your project office. Whether the project manager, system project managers, and so forth and so on. Builders or risk, usually the owners tend to carry that insurance, to protect the building, based on what's been built to date, what's accepted. If you call, for lack of better term. Against major damages, as fire, hurricane, water damage, and so forth and so on. And now for the designers out there in your firm you have to a substantial amount of professional liability. And again, I'm just touching on these particular products of insurance, and I'm gonna do the same thing with bonding cuz this is a whole topic in itself. And even though I know a little more than just a basics of what I'm trying to translate to you right now I'm certainly not an expert in any of this. Because, there's people who are a lot smarter than me, when it comes to insurance and bonding of contractors. Professional liability, to cover errors and omissions for the design professionals. And, Other products of course automobile insurance and pollution liability that would cover an event, the disturbance of hazardous materials such as asbestos, lead and mold. So how do you go about to prevent insurance claims, or should I say minimize insurance claims? Pre-qualify the contractors. Make sure that they have a good safety record, make sure they are financially healthy, make sure that they have a minimal amount of insurance claims, and, most important, depending upon the size of the firm that you are working For your working with is if somebody can possibly take a look at their insurance policy. I came across a contractor one time whose bidding work as a roofing contractor. And when they gave us their insurance policy, roofing was an exclusion in their contract. So they were bidding work that they were not properly covered for. So of course, we couldn't give them the process. But luckily, we were able to pick it up early enough and prevent from something serious happening. Serious damage happening down online, and not having the The proper risk mitigation place to cover ourselves. So, I didn't do it, thank god. We have the people who are intelligent enough, knowledgable enough to look at stuff like that. Look at the right place. Without having to read the legal lead sources with every policy. Of course it goes without saying selecting the right contractor for the right reason. Don't pick a roofing contractor to do plumbing work I understand it’s an exaggerated statement but keep that in mind. Don't over pay letting a contractor getting ahead of you. it reduces the funds available to remedy any potential damage that comes down the pike. So make sure that your payments are closely in line with the progress of the project. And make sure you always have some healthy reserves in the form of retainage To cover any potential damage that could arise in the event it's not covered by insurance. Understand the contract language and who is responsible for what. Always, always, always. The contract language is quite specific as to insurance claims, how they are to be handled. Who's responsible for what and so forth and so on. And last, but not least, when you a monitor a project you don't just monitor for the sake of quality control or to push a project through to completion. monitoring a project with regards to safety. monitoring a project with regards the proper installation. Monitoring the project with regards, that the contractors are employing the proper methodology in the performance of their work. Goes back to the experience level we talked about very early of our discussion. Surety bonds. Goes back again my previous statement that I'm not a bonding expert. But these are some of the bonds that, the three most common bonds to come across is bid bonds, performance bonds and opinion bonds. Bid bonds is critical, especially on a publicly bid project. Not only is it critical, it's mandated. What he basically states is that once you've submitted big, that you will live up to the obligation of signing the contract based on the bid documents and the number that you've submitted. The only way you can get out of it is by an event that any changes occur that would change both the scope, the contract, and which will effectively to a revised price in the bid documents. So what the bid bond does is Guarantee the owner in the event you decide to say oops I screwed up, I don't want this project now. To whatever the gap is between you being a low bidder and the second bidder the binding company is on the hook for that delta. So, they take stuff like that very seriously. I've rarely seen a default, but just keep in mind that that's the purpose of a bid bond. The performance bond basically states that you'll complete the project based on the contractual requirements. And the payment bond is, of course, a form of guarantee that once the money that you receive That is required to go out to your subs or your sub's subs that the money will be processed accordingly and fairly, okay. Why are bonds important? And here's something to think about. Whether you use a bond on a project or not It's still important to ask the question, are you bondable and for how much. Okay, because a bond, a contract that is bondable, that usually equates to a properly run and managed operation. Okay. That means that they have both the managerial skills, they have the personnel skills, and that they have the financial skills. Cuz the binding company's going to great detail, in trying to identify, is a contractor, Is a contractor worthy of getting a bond for a particular, project. Okay, so some of the assurances, as I mentioned, as to the qualities of a good bidder, Of a bondable bidder, is the fact that they will manage this on enterprise. They maintain sound business practices, performs applications, that means little to the contractual obligations. Make their payments, and of course, that they have the proper financial strength. Bonds, can Can be a means of eliviating, rescrine the risk of linse and potentially long term financial loss, and last but not least if is any defective material the burning company is responsible. So, there is a safety factor to it, but keep something in mind, it's not Don't make it your security blanket, okay? Because if you fail on all the other aspects which we've talked about, a faulty schedule, not paying people on time, not properly monitoring the projects, not planning the projects through from point A to point B, none of these will protect you. Because bonding companies, one thing you have to keep in mind is that the fact that in the event of a default, they don't just jump in and say, "Okay Lemme take over today and you'll have new contractor or a new trades people coming in tomorrow to start. There's a lapse and there's usually investigation. It could take time. And it's something for you to consider, that that time could absolutely destroy your project.