This evening, a general contractor approached me at an association event to discuss a problem he has experienced with a major institutional client.
He’s done much business with the organization over the years, but recently a change order claim went totally wrong.
The contractor says he understands in some cases change orders can occur for reasons where responsibility may be murky or caused by the contractor’s own actions. But not in this case, he says. It was a straightforward situation where the owner changed things mid-stream, and the contractor needed to incur extra costs to comply with the revisions.
So he filed the change order claim.
He says he was called into the office of the owner’s representative. “If you pursue this claim, you’ll never be qualified to work for us again,” he says he was told. And, subsequent to that event, as he completed work on current projects, he received a notice that he would be disqualified for another project at the bid stage.
He says he has talked with others, who report similar intimidation tactics, and said the others continue to do business with the organization but remain fearful.
“Would I write a story about this matter?” he asked.
I told him if he had taped the conversation with the owner’s representative, I might be able to do something, but I cannot go in the direction of naming names without more hard evidence. After all, if the owner would intimidate the contractor over a change order, the organization presumably would have no trouble hiring lawyers to file libel claims against the publisher who dared to expose the story. In any case, I haven’t verified anything here — that is why no names will be mentioned in this posting.
The construction industry has good moments, and bad; ethical players and not-so-ethical ones; truth can be clouded within interpretations, there can be “one person’s word against another” arguments, and most of the time the less-than-honorable stuff is buried underground or communicated through whispers and innuendo.
I know that change orders have always been one of the most contentious and challenging aspects of the construction industry. Some owners think contractors abuse them to pad their numbers and turn money-losing projects into profitable jobs. Contractors, meanwhile, fume that they cannot be paid properly for changes for which they should be reimbursed.
There are no easy answers to the questions raised here. In the end, I suppose the right approach is to generally trust others, live by your principles, and be willing to stand your ground when you need to defend your rightful business practices.
But what would you do when a major owner decides to play heavy with you — effectively destroying all the work and reputation you’ve achieved, and burning bridges that no marketing dollars can recover? ?I do not have a good answer to this question. Do you?
