Initiating the Turnaround
Avoiding the Perception of Pre‐Litigation Posturing
During realignment, it becomes necessary to reestablish a new baseline by “cleaning house” and reinstituting the procedures to which the parties agreed. However, when this direction comes from the owner, the contractor may perceive this in one of two ways: (a) the owner or CM is now getting rigid and hard line, and we will also have to escalate our defensive posture; or (b) the owner and CM are finally getting a handle on this project, and we will collaborate with them to achieve a good, healthy outcome for us all. This is a key moment to begin leveraging for realignment.
Increased record keeping might first suggest to a seasoned construction professional that the other party is deliberately adopting a defensive position or, worse yet, a pre‐litigation posture. How an owner and CM team choose to re‐implement lapsed CM procedures (vague inspector’s daily reports, poor minutes, weak or silent correspondence, recognizing extra work, directing extra work in responses to RFIs) is worth considering so that such actions are not solely perceived as punitive in nature. Which of these perceptions becomes dominant in the contractor’s mind and behavior can be determined by intelligent action on the part of the owner’s construction manager. The conversation needs to go something like this:
“This project has gotten out of control, and we need to change that or we all will suffer. Let’s reestablish consistent procedures and follow the contract and good sense. Let’s reestablish viable project controls, starting with the schedule and with the checkbook. We have some outstanding disputed items about which we disagree. Let’s bring in a neutral expert facilitator to help us realign and rebuild this team, to figure out what’s working and what’s not working, and to help us set things straight — together.”
A return to a formal way of doing business on troubled projects is not only in the interests of the owner, but also the general contractor. The contractor benefits from the re‐instituted procedures too, because such processes return expectedness and decisiveness. The contractor appreciates this since he prefers to operate in a predictable environment (just tell me the rules and I’ll follow them).
Ideally, both parties should adopt a culture of fair interpretation of the contract documents. However, the CM team must certainly adopt such a culture — regardless of the contractor’s culture — for the best interests of the owner and the project. But contractors are not Pollyannas, and they’ll believe it when they see it, so the owner’s CM must walk the walk. That means tightening-up the procedures and protocols and moving quickly to get issues resolved and questions answered. And it means paying attention to the human factors.
In the next installments of this series, we continue to strategize realignment actions that Anser may facilitate on the owners-side of the fence, including “Cleaning the Slate.”
This is an 8-part series called Leveraging for Realignment: Best Practices for Troubled Projects, originally presented at CMAA National Conference.
Contributing authors: Shawn Paroline, SAIC; Mike Kenny, San Diego County Water Authority; Dan Fauchier, The Realignment Group; Jim Linthicum, San Diego Association of Governments; Chris Brasco, Watt, Tieder, Hoffar & Fitzgerald, LLP