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16 / 3 Rule

February 06, 2008  |  from The Construction Contractor's Digest

Over the years, general contractors have consistently taken small gambles on young or unproven subcontractors. Time and again, the ratio I used to see was 16 / 3. That is, if a GC had 16 subcontractors on a project, he or she was using 3 who were not proven or simply cheap. As you know, this is a rational gamble as the building owner was asking for price first and then asking for speed second.

In my experience, this ratio has changed to 16 / 2 or 16 / 1. It seems since the turn of the millenium, GC's have led the charge for insisting for quality subcontractors and passing on the additional cost. It is to their credit.

Additionally, the drive for speed has risen has been matched by the GC's determination to change the economics of constructing work. Certainly, we all take a gamble. However, proven subs are 90+% of the equation and it is to the credit to the 700,000 builders along with the AGC, HBA and other contractor representatives.

Filed: Project-Management