9 key examples of contractor performance measures

By Samual E. Cicero, Jr.

These behind-the-scenes, non-billable tactics all too often go unnoticed but are necessary for an overall positive renovation experience.

When selecting renovation contractors, many hotel owners and property managers make their decisions based solely on the bottom line.

Others carefully consider the intricacies of the project and whether they feel confident that the selected contractor will finish the renovation on time and on budget. What these hotel owners appreciate are the many value-added, non-financial advantages that a talented contractor brings to the project. For the purposes of this article we will refer to these advantages as “performance measures.”

Performance measures may prove imperative for successful completion of hotel renovations, but it is difficult to put a price tag on them. Key examples are outlined in the following nine points.

Business disruption avoidance
Business disruption avoidance refers to the contractor’s ability to identify and categorize possible risks early on that could throw the project off schedule, resulting in cost overruns and guest dissatisfaction. The contractor should be able to draw up a detailed plan identifying potential risks. Each individual risk should be assigned a high, medium or low percentage of likelihood. At that point, the contractor should create “what-if” scenarios around high-risk items, including a work-around plan.

One of the contractor’s employees should monitor this risk-management plan daily with specific guidelines as to where and when to alert the entire project team, including the hotel owner, should that particular risk occur. A successful risk-management plan greatly minimizes costly overruns and change orders.

Bidder qualification
The success of a project relies greatly upon the general contractor’s vetting of suppliers and subcontractors. It is the contractor’s responsibility to ensure that suppliers and subcontractors alike have the same sense of value and dedication to the completion of a project as the contractor in charge. Professionalism, safety, adequate skill sets, proper communication and access to the right supplies – as well as respect for the owner – are all very important attributes when selections are made.

Another key area of prequalification scrutiny is a subcontractor’s financial data. General contractors may ask for particular details like annual contract volume, sales and net worth, or they may request full financial statements. Another essential prequalification item is safety management history. General contractors should require that a subcontractor’s workers compensation experience modifier be 1.0 or lower, confirming that its loss experience has been on par with others. General contractors also may ask for Occupational Safety & Health Administration (OSHA) data such as illness/injury rates and lost workdays, along with information about a subcontractor’s own safety management programs and procedures. Work history, of course, is important, including the type of work done, jobs completed or in progress, and disputes over previous work. General contractors also should look at a subcontractor’s schedule of upcoming jobs to be sure it is not overextended.

Long-term subcontractor relationships
Subcontractors are valued partners to the general contractor. The general contractor’s ability to maintain long-term relationships with their subcontractors provides a value-added proposition to your project by building efficiencies, increasing quality and upholding a high level of trust. In addition, a general contractor maintaining a deep bench of subcontractors helps keep the bidding process open and transparent, and makes overall pricing more competitive.

Site cleanliness
There is no getting around it – hotel renovations are messy. Having a contractor team that is skilled in their craft, as well as organized, clean and professional, will help ensure an overall positive renovation experience, both for you and your hotel’s guests.

A clean site is an efficient site. A site in good order and clear of debris encourages workers to complete tasks faster with improved quality. Also, because hotel renovations are very detail oriented, it can be easy to lose track of tasks and items if the site is a mess.

A clean site is a safer jobsite. The most cited OSHA safety infraction is ‘housekeeping.’ It’s a very common infraction, because people who tend to leave a mess have a higher chance of tripping or slipping. Messy sites cause accidents, especially with jobs that start early in the morning or late at night when it’s dark outside.

Controlling noise levels
As part of the management process, the general contractor must be aware of peak times of hotel operation, especially in high-occupancy properties. This awareness will help the contractor modify work schedules so that noisy tasks are not performed during peak hours or busy periods of the year, preventing hotel guests and employees from being disrupted as much as possible. Controlling noise and maintaining cleanliness creates an environment where the hotel owner can continue to sell rooms and maintain cash flow throughout the renovation project by closing off just one floor at a time.

Managing guest complaints
In the world of social media, hotels can no longer afford to have online complaints on sites such as TripAdvisor, Fodor’s or Lonely Planet go unanswered. Many hotels now have paid staff whose job is to answer reviews, whether positive or negative. Your renovation contractor should be mindful of social media backlash brought on by excessive noise, messes or rude behavior. This will ensure negative online feedback is kept to a minimum.

Controlling deliveries
An important responsibility for a general contractor is ordering, approving, controlling and handling materials received onsite. For example, how will new carpeting, wall coverings, furniture, fixtures and equipment be delivered so additional costs are not incurred? Will elevators used in day-to-day operations be unavailable due to deliveries not being properly scheduled? Who is the contractor’s “storekeeper” responsible for controlling onsite materials? How are materials registered? What forms are used to record the arrival and distribution of materials? Where will materials be properly and safely stored? A skilled general contractor will be able to answer all these questions.

Open communication
Open communication between stakeholders is key to successful renovations, from the initial stage of scope planning to budgeting, the bidding process, performing the work, completion of the project and beyond. One element of open communication is a daily report identifying manpower levels, deliveries, safety and current areas out of service. Weekly phone calls should also take place to discuss the overall schedule, design and client operations so all parties can work to manage issues as a team. For example, often a hotel renovation will require temporary “laydown” areas to store supplies. Specific dates and times for the space to be available can be negotiated between the renovation contractor and the owner/property manager prior to the start of the project. When the renovation is underway, daily meetings can be held to address delays in delivery of the space or the materials, as well as whether guests are complaining that the space is closed.

A detailed punch process
A complete, detailed punch list is the sign of an experienced contractor. Identifying the punch process procedure at the front end of the renovation sets the bar for expectations of quality. Signing off on punched areas is basically signifying that all parties have reviewed the work and agreed the space is ready to sell or occupy. When properly prepared, it should identify which team members will be included in final punch-out, while allowing the recovery time needed to make a last-minute repair or alteration in the schedule. In many renovations the punch-out is an anxious time, and that anxiety is often due to a lack of clear expectations upfront.

The contractor you choose to renovate your hotel should work diligently to understand your project goals and provide you with all the necessary tools to help ensure a successful project with a high return on investment. These performance measurements can serve as an excellent gauge of the contractor’s professionalism.      ■

Samual E. Cicero, Jr. is president of Cicero’s Development, overseeing the daily operations of the business and is personally involved with each project, troubleshooting potential challenges and their solutions, communicating with project owners and representatives updating them on the progress of their project. To learn more, visit www.cicerosdev.com.

 

9 ways to measure contractor performance
What does it take to get the job done? Hotel owners and managers should examine how contractors fare in regard to the following benchmarks:

1. Business disruption avoidance
2. Bidder qualification
3. Long-term subcontractor relationships
4. Site cleanliness
5. Controlling noise levels
6. Managing guest complaints
7. Controlling deliveries
8. Open communication
9. A detailed punch process