CIVIL · CIVIL AND EARTHWORK · FIXED BY STEP 08

Trench dips appear inside the bond window

The parking lot settled over your sewer line eighteen months after acceptance, and who pays comes down to whether the density test for that station and that lift is in a file.

WHY IT'S A CIVIL PROBLEM

Most trades see their defects turn up during the punch walk while somebody is still on the job. Civil's are buried, latent, and seasonal: the trench and the pond don't fail until a wet season works on them, long after closeout and long after the cost codes closed. The proof is in a stack of third-party density tests taken months before anyone knew there would be an argument.

WHAT IT COSTS

The size of it

A saw-cut, excavate, recompact, and repave callback on a settled trench crossing a drive aisle runs $8k to $25k, performed by a crew pulled off billable work. The job closed out a year and a half ago and has no cost code left open to receive the charge.

OVERHEAD AT $1M–$5M

14%

CFOS target 13% for civil.

GROSS MARGIN AT $1M–$5M

21%

CFOS target 23.5% for civil.

NET PROFIT AT $1M–$5M

CFOS target 10.5% for civil.

File density reports by station, lift, and date, because that record is your entire defense a year and a half from now. Backfill over a utility trench consolidates after the first heavy wet cycle, so the dip or the cracked pavement panel appears 6 to 18 months after acceptance, comfortably inside the standard 1 to 2 year maintenance bond on public and municipal work. Pond slopes rill in the same window, and permanent stabilization has to be re-established on your dime. If the test reports were never filed by location, you can't prove the lift passed, and you pay for the repair whether or not your compaction had anything to do with it.

WHAT TO DO

Three moves, in order

STEP 01

Require the testing lab to report by station, lift, and elevation with a date, and file those reports to the job the week you receive them, not at closeout.

STEP 02

Keep one warranty cost code open per closed job so callback hours, equipment, stone, and asphalt post somewhere you can see them, and review the total every quarter.

STEP 03

Walk your trench crossings and pond slopes after the first heavy wet season and fix small dips on your own schedule, while the bond period still has room in it.

THE FIX

Step 08: Standards and accountability

Five hours a month of owner time, spent projecting the work.

CFOS-08 · CHAPTER 8

Five hours a month, spent projecting the work

What this step changes, what it depends on, and how to tell it's installed.

BENCHMARKS

Civil by revenue band

All 7 bands are published. The CFOS target is beside the figure up to $10M to $25M, and the 4 bands above that are labelled modeled.

ACROSS EVERY TRADE

PMs aren't accountable for margin

Your PMs are measured on schedule and on the client being happy. No role in the company is measured on the number at the bottom.

SAME TRADE

What else costs civil contractors money

CIVIL · CFOS-04

You bid cubic yards and pay by the ton

You bid 40,000 yards of import and every scale ticket comes back in tons. The biggest cost line on the job is measured in a unit your contract never defined.

CIVIL · CFOS-01

Four mobilizations, one mob line item

You clear and grub in month one, come back for wet utilities, come back again for paving subgrade at closeout, and the contract still has one mobilization line.

CIVIL · CFOS-06

Your retainage is waiting on 70 percent grass

You finished grading in month three and utilities in month six, and the last 5 to 10 percent of your contract is locked behind a seed bed that has to hit 70 percent cover.

CIVIL · CFOS-06

The grading permit clock isn't on your schedule

Third resubmittal on the grading permit, the power pole relocation is six months out, and your crew and iron cost money while no party in your contract chain is at fault.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

DEMOLITION

They Found A Tank A Year After You Demobilized

An old UST turns up under the pad twelve months after your last load left, and every finger points at the contractor who isn't on site anymore.

DRYWALL

The eleven-month callback hits this year's payroll

It's March, two of your best guys are in a truck all month fixing houses you finished last spring, and none of those hours bill.

FIRE PROTECTION

A Freeze Event Hits A Year After Final Payment

Ten grand of pipe froze over a long weekend and turned into a claim, and the crew that went to fix it came off a billable job to do it.

QUESTIONS

What civil owners ask

The parking lot settled over my sewer line and they called my maintenance bond?

The parking lot settled over your sewer line eighteen months after acceptance, and who pays comes down to whether the density test for that station and that lift is in a file.

What does it cost?

What do I do first?

Require the testing lab to report by station, lift, and elevation with a date, and file those reports to the job the week you receive them, not at closeout.

What are civil contractors supposed to be making?

Civil runs 21% gross margin, 14% overhead and 7% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is right on it. The CFOS target is 10.5%.

Which part of the system fixes it?

The step is number 08, standards and accountability. Five hours a month of owner time, spent projecting the work. It comes from chapter 8 of CONTROL: The Construction Financial Operating System.

OR HAVE IT HANDLED

Everything on this page is something you can install yourself, andCONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for civil contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.

What a fractional CFO does for civil contractors

AUTHOR

JOSH LUEBKER

MASTER ELECTRICIAN · 150+ PROJECTS · $2.1B+ MANAGED

Wrote CONTROL, the 8 step system behind these figures. More about the author.