Friday, July 24, 2009
Maximizing owner margins
The ever-rising cost of completing construction projects is making it common place to see the low bid contractor selected for projects which they cannot possible complete.
This may be a dangerous trend.
Too often, owners who believe that even if contractors cannot complete the work, then insurance companies must make good on the final product. This puts insurance companies at a huge disadvantage because it is often too late to salvage a project, both financially and logistically, by the time a less-than-qualified contractor has been declared in default.
Oversight and periodic reviews of contractor performance help provide "insurance" for the insurance companies.