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ConstructionPro Week, Volume: 4 - Issue: 48 - 12/11/2015

Government Contracting: Trends, Challenges and Best Practices

Government construction contracting represents close to 45% of all U.S. non-residential construction spending, according to a recent review of Bureau of Commerce statistics. To learn more about our reader’s experiences and challenges on government contracts, ConstructionPro Network launched a survey this past summer to find out how smoothly government contracts are run, to learn about any activities that involve construction claims and change orders and to see what trends or patterns might emerge that may be worth further study.

 

The survey sought out details on federal, state and local government programs. More than 52% percent of the respondents indicated 33% or more of their work was on federal government projects with another 30% indicating they performed occasional federal work. Among government agencies, the Corps of Engineers (USACE) and the Naval Facilities Command (NAVFAC) were the two main federal customers. 53% of all survey respondents were contractors or subcontractors, the rest representing the other participants in the industry – construction managers, architects, engineers, consultants, suppliers and attorneys.


Overall Findings on Issues and Concerns

The survey focused on five major segments of the typical construction project, asking readers to rate various contract activities within each. The five segments of government construction contracting studied in the survey are:

  • Procurement
  • Startup and mobilization
  • Construction phase
  • Claims and change order management
  • Project close-out

When questioned about the procurement process, the quality of technical specifications, the completeness of drawings, and the responsiveness to request for clarifications ranked as the top three areas of concern among all respondents.

 

Contractor experience with startup and mobilization was generally issue free, with only two items ranked as a frequent issue by more than 25% of respondents: One, availability of partnering opportunities, and two, cooperation and responsiveness in processing start-up documentation.

 

For the construction phase, the level of issues involving the working relationship with the owner or owner’s representative jumped moderately, led by 26% citing response to, and resolution of, RFIs as frequently an issue. Timely review of shop drawings and submittals plus adequacy of the owner’s contract administration procedures and technology were close behind with 23% saying these items were frequently an issue.

 

Claims and change order management: Regarding change order and time extension requests, 30% cited turnaround time was frequently an issue, but otherwise responsiveness and willingness to negotiate was not often an issue.

 

For project close-out, dealing with punch lists, warranties, as-builts and final payment, readers again reported a relatively moderate level of owner issues other than payment. Closing out and processing payments on outstanding change orders as well as processing final payment was cited by 20% of readers as frequently an issue, with 10% of that group saying it was always an issue.

 

Federal Government Work Tells a Different Story

Comparing the federal government respondents with overall findings tells a bit of a different story. Federal contractors clearly have a different issue set on most of the activities of the first four out of five categories chosen for this survey, with generally lower levels of satisfaction. For project close-out, federal contract ratings were not much different than overall public construction.

 

Conclusion

The survey revealed no major revelations. At worst, it highlights some areas that traditionally have been sources of complaints. At best, it provides government procurement officials with data to support efforts to make improvements in the construction contracting process. The full survey report provides details and graphs on the various survey questions and how the respondents rated the questions in each category. Both contractors and government employees should find the comments and best practices in Section 4 of the report quite useful. The complete 28-page report is available free to ConstructionPro Network members and those who took the survey, and is available to purchase for all others. Click here to access the report.

 

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