Cutting Costs, Cutting Quality

In our current economic situation, when money is tight, most subcontractors face the same dilemma.  The owners are demanding the least expensive project cost all the while believing that the project will be built "Per Plans & Specs", and "On Time."  Each general contractor has their own set of safety and quality standards.  The sub then has to submit their proposal knowing the material costs are almost the same, the labor hours somewhat comparable, and the equipment similar.  Really, the main variables are overhead and profit.  Now that general construction jobs are limited, the profit is minimized or set at breakeven and overhead has already been cut to the bone, so where does that leave safety and quality?  It takes money for employee training sessions, meetings, and safety equipment. Quality comes from attention to detail and an employee mindset where craftspeople evaluate their own work and ask "would I buy this?"  This level of quality adds cost to a job, creating an unequal playing field when jobs are bid.  Desperate subs may decide that the easiest costs to cut are safety and quality.

Unfortunately, neither the owner nor the general contractor will understand what they have sacrificed until later when they see the job slow down due to accidents, insufficient manpower and poor quality.  You would think they would learn their lesson but this scenario repeats itself over and over.  I still remember a potential customer telling me they would "Manage the Risk" on a sizable job and then hiring the contractor who submitted the lowest bid.  I only wish I could have been around to say "I told you so" when later I found out about the poor performance on that job.

It will be left to those of us who value safety, quality and sustainability to quantify these standards, requiring all subcontractors to submit quality and safety program information as part of their bid.  Until these items can be quantified, I don't believe things will change.