Schedules Are Compressible

The Real Estate Espresso Podcast

Schedules Are Compressible

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Schedules Are Compressible

Welcome to the Real Estate Espresso, a podcast your morning shot at what’s new in the world of real estate investing. I’m your host, Victor Menasce. On today’s show, we’re talking about the role of a general contractor.

On a large project, there’s a lot of moving parts. Several sub-contractors can be working at the same time on different aspects of the project, especially in a campus situation. Typically, the buildings are designed so that the crews move from one building to the next, and then to the next. You might have plumbers in one building, electricians in another, and windows being installed in yet another, all whilst exterior cladding is happening with telescoping lifts. Drywall painting and finishing could be occurring simultaneously in other parts of the project. There’s just a lot going on.

A major part of the general contractor’s job is to monitor progress for the scope of work in each of these areas. They need to track the staffing that the subcontractors bring to the project and set clear expectations with them regarding their staffing level. The subcontractor’s goals, which prioritize managing staffing level, may not align with the project’s goals. If a project falls behind schedule, there could be various causes, such as lower productivity on site, improper scope of work estimation, unreliable construction staff, or material delay.

A situation, on a project we’re handling, sees the drywall crew not making expected progress. The staff are leaving early, complaining that the air is too cold for the compound to dry efficiently. This excuse isn’t valid, as they are absent by two in the afternoon, leaving the job site vacant. The fact is, the drywall company’s staffing is unpredictable and inadequate, resulting in the drywall being behind schedule. This setback impacts the entire project, causing a domino effect that delays painting, flooring, and finishing.

The commercial and residential subcontractor models differ. Residential companies, being smaller, have a fixed number of staff and lack the ability to adjust their workforce according to requirements. Such companies sometimes hire another small residential subcontractor to boost their staff. However, commercial companies are expected to possess a deep labor pool that allows them to mobilize extra resources for lagging projects.

If the project is running behind, the owner should be able to ask the general contractor to find additional help to get back on schedule. While the subcontractor might demand a higher price for added labor, they must remember that contracts are priced based on the scope of work, not workforce size. If workers are leaving early and lagging in progress, the subcontractor and the general contractor have to handle these issues. The general contractor’s role is to ensure proper resourcing and, failing to do so, they’re not providing value.

Certain tasks inevitably require time. Nine workers can’t cut the time it takes one worker to complete a task by nine. However, multiplying the number of drywallers, painters, and carpenters by nine definitely enhances progress. Construction schedules can be compressed significantly, as witnessed when job sites stand idle when they could be productive. Subcontractors giving excuses for slow progress must be challenged.

Reflect upon these insights and have a great day. I look forward to speaking with you tomorrow.

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