quality & the construction contractor

Quality & the Construction Contractor

Damon P. Schneider – Consultant, Loss Control

AGENDA

• Overview of changes within functional area.

• QA / QC: what is the difference?

• Why is quality in work process and product important?

• The role of safety and loss control – providing

guidance to the policyholder.

Southeast Safety & Loss Control

Something seems different…..

• Ongoing evolution to a consultative service model (e.g. LARC meetings, CSAs).

• Continuous review of asset utilization.

• Willing to assist with “desktop assessments”.

• We are a “man down” so keep this in mind if you have time sensitivity.

Is quality work product an issue in construction?

QA…? QC…? WTH?

• Quality Assurance (QA): the continuous proactive management of the construction process designed to reduce rework & increase productivity.

• Quality Control (QC): the review of installed products / workmanship.

• What is the difference?– QA is used to manage quality throughout the

construction process. QC is inspection-based, after the fact….whoops too late!

Bad quality is bad business

• Lack of controls in approach to the project: – Viewed as reflective of overall company culture.

• Culture is the foundation of worker behavior.

• Rework, customer complaints, product recalls & returns, warranty claims, lawsuits & lost revenue represent 5-15% of total business costs (Boston Consulting Group, 2007).

Bad quality is bad business

• The BCG figure does not factor in financial impact of reputation risk:– Bad “rep” in the industry can impact the

sustainability of the company. – “We should not take peace for granted” (Angela

Merkel, Chancellor of Germany).

• Minimizing rework will reduce the use of material resources and the exposure of human resources to injury.

Benefits to having a quality orientation:

• Do the job once: – Increase efficiency.– Reduce variation in outcome.– Reduce the potential for injury.– Reduce the potential for property damage.

• Proper tools used on the proper materials.• Reduce cost associated with rework.

Benefits to having a quality orientation:

• Leverage “quality” as a business development tool.

• Assemble a project portfolio:– Defect free.– Under budget.– Zero accidents / property damage.– GC / Sub references.

Continuous Process Improvement

• Review specifications.• Plan the job.• RFIs? Change orders? Are they tracked?• Need for coordination when on site?• Create QA requirement lists specific to the

trade.• Train your people:

– Don’t assume they have a clue.

Challenges in this class of business

• Many of our PHs are in “survival mode”.• Get the job even if they are losing $$:

– Margins are otherwise in 3%+/- range.

• Safety and QA factors are the first to be cut:– CFO is now the “Safety Director”.

• Our efforts face some headwinds in this environment.

What should we look for?

• Does the PH have a “system”?• Proper specifications? • Member of industry association(s)?• Aware of industry best practice?• Do they pre-plan?• Any planning for the staging of materials?• Use of accepted contract forms for

delineating responsibility (e.g. AIA A401).


• The right person for the right job?

• Is there a reliance on punch lists, architect reports or the county inspector for their “quality control”?

• Do they perform an “after action” report on completed projects?


• Work from plans developed by a licensed architect / engineer?– Not from napkins!

• Maintenance of job files?• Review / assist with QA requirement lists:

– Address items that are “specification-specific”.– Common items from punch lists.– Signed copy for CM / GC / Sub.– Keep it to one page!


• Discontinued products / operations.• Acquired products / operations.• Understand the extent of “design” exposure:

– This includes value engineering!

• Identify emerging risks:– Energy performance & code requirements for

projects funded by federal “stimulus”.– Possibly a “green” construction exposure to

liability.

Off on the horizon ….

• If we seek to target the “middle market”:– We should expect more formal processes.

• These processes can include:– Root cause analysis (which has safety and quality

applications).

– Six Sigma.– ISO-9001.– Lean construction– IPD and BIM.

Southeast Safety and Loss Control

• We are here as a resource to you, our agents and our policyholders…. Please feel free to lean on us for counsel.

• We work cheap! Pizza and tips!– I will accept coffee in lieu of food.

• Our expanded pool of resources includes our leadership team and safety professionals in nine states!

Any questions?

quality & the construction contractor

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