Megaprojects are incredibly profitable ventures for the lawmakers, developers, and construction companies that work on them. And profits are only growing; the average United States megaproject is expected to increase in size from $2 billion to $2.9 billion by 2023. These head-spinning numbers are indicative of an industry that is growing at an astounding rate. In order to get a piece of the megaproject pie, construction companies need to avoid the pitfalls that have bankrupted so many others in the industry.
Below, the Central FL contractor lawyers from Cotney Construction Law discuss three common problems that can threaten the completion of a megaproject and what your company can do to avoid them. These are problems that have delayed projects and bankrupted even the most financially secure businesses. For all of your construction-related legal needs, consult a Central FL contractor attorney from Cotney Construction Law.
The Problem With Megaprojects
Before we discuss how you can deliver a successful megaproject, we must touch upon the numerous issues that can threaten project delivery. These problems are only magnified on megaprojects with numerous cogs — contractors, subcontractors, sub-subcontractors, and material providers — that must operate in time with each other for a megaproject to progress according to plan. Here are three common problems that can present themselves on a megaproject:
Biting Off More Than You Can Chew
On projects of all sizes, there’s a certain level of over-optimism involved. This over-optimism can be a double-edged sword, a positive outlook that creates challenges and simultaneously helps contractors overcome them. However, over-optimism on a megaproject can lead to issues that no company can recover from, and construction companies who bite off more than they can chew are sometimes forced to cut corners in order to keep costs low. This is a short-sighted approach that can only lead to a costly legal dispute.
Too Many Cooks in the Kitchen
If you think communication is difficult on an average project site, imagine trying to communicate with the hundreds of workers active on a megaproject each day. From laborers to investors, all involved parties will have their own views on what needs to be done to see a megaproject through to completion. Construction companies, in general, will be concerned with earning a profit, while those at the top will be looking to spend the least amount of money possible despite having rarely stepped foot on the project site. This friction is where numerous disputes originate. When you take into account that megaprojects regularly involve local and state governments, numerous other private contractors, and hundreds of workers to manage, a breakdown in communication is bound to happen.
Not Enough Manpower
We’ve previously covered the widespread labor shortages that are plaguing construction companies across the nation. Try as they might, construction companies are having a difficult time attracting new workers to the industry. This problem is compounded by the fact that the rising cost of labor is increasing construction costs across the nation. This is one of the many reasons why an incredible nine out of ten megaprojects go over budget.
Avoiding Problems on Megaprojects
Now that we’ve touched on the problems that megaprojects inherently have, it’s time to discuss how your company can overcome these obstacles and reap the rewards of a successful megaproject. Most of these problems can be solved with accurate foresight, while others may require the assistance of a legal professional. If you are caught up in a dispute that you can’t resolve on your own, consult a Hillsborough County construction lawyer from Cotney Construction Law.
Look Before You Leap
Most construction projects that fail allow the companies involved to reflect on mistakes and apply takeaways to future projects. However, the high risk, high reward nature of megaprojects means that companies involved could face bankruptcy unless everything goes according to plan. Therefore, it’s important to get that plan right before breaking ground. You must not overestimate your abilities and underestimate project costs. Always assume that megaprojects will face delays and go over budget, and do your best to estimate the scope before committing to a project of this magnitude.
Data Is King
Take it from our Hillsborough County construction lawyers, an alarming amount of lasting decisions are made without the use of real-time data. Too often, progress is tracked by way of payments as opposed to actual work performed. By the time payments are processed, a myriad of changes and delays could have impacted your project site. You need project-wide metrics that all parties can rely on to ensure that everyone is on the same page. When different parties are using different estimates, it limits their ability to predict delays, solve problems, and highlight innovative approaches.
Build Your Team
As mentioned, there are hundreds of workers that come and go on a megaproject. Without a team of qualified project managers, advisors, and controllers, you run the risk of having your project go off the rails. While you are undoubtedly facing substantial labor costs, your best bet is to invest in skilled team leaders that can be your eyes and ears onsite. At worst, they underperform. At best, they are invaluable pillars of support that save your project from costly delays and unforeseen problems. You will find that the most valuable team members are the ones that stick with you through difficulty and uncertainty.
At Cotney Construction Law, our unwavering team of attorneys has represented construction companies of all sizes in countless cases across the country. With our affordable subscription plan, you can ensure that you have a direct line to a legal team that will defend your company throughout construction and long after. If you are concerned that unforeseen circumstances are threatening the success of your project, consult a Central FL contractor attorney from Cotney Construction Law.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.