TANK AND VESSEL · SPECIALTY · FIXED BY STEP 06

Late Plate Puts a Certified Crew on the Bench

The plate is six weeks late and there's nothing else on that site your welders are allowed to touch.

WHY IT'S A TANK AND VESSEL PROBLEM

A GC covers a material slip by pulling another trade forward. A tank erector has one to four dedicated crews and holds a single scope on that site, so the mill date moving is the whole job moving. The delay also belongs to the mill, which leaves no GC to file a claim against and no party to bill standby to.

WHAT IT COSTS

The size of it

Six weeks of a five-man welding crew plus a crane on standby is $60K to $120K with zero revenue against it and no delay claim behind it.

OVERHEAD AT $1M to $5M

15%

CFOS target 14% for tank and vessel.

GROSS MARGIN AT $1M to $5M

23%

CFOS target 25.5% for tank and vessel.

NET PROFIT AT $1M to $5M

CFOS target 11.5% for tank and vessel.

Shell plate rolls to grade, width, and thickness in one heat lot so the Mill Test Reports trace back to the API 650 tank they belong to. Mills roll a given grade on a schedule, and missing that window turns a quoted 10 to 16 weeks into 20 or more. Your crew is certified welders, a jacking system, welding rigs, and a crane, and none of that redeploys to a different scope on the same job. There's rarely a second tank ready to start, so the choice is idle payroll or a layoff that sends trained welders to the shop down the road.

WHAT TO DO

Three moves, in order

STEP 01

Before you commit a crew start date, ask the mill for the rolling schedule covering your grade and width, and put the roll date on your schedule, not the promise date.

STEP 02

Post the loaded weekly cost of a welding crew plus crane standby right where the schedule lives, so the number is in front of whoever is moving dates.

STEP 03

Write a slip protocol: at four weeks out with no roll confirmation, you either release the crew to another tank or get a written schedule extension from the GC. Pick one, don't drift.

THE FIX

Step 06: Project management

Billing dates, change orders, and notices, written as standards that work without anyone following up on them.

CFOS-06 · CHAPTER 6

Billing and change orders that hold without follow up

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

BENCHMARKS

Tank and vessel 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

The change orders you did and never billed

The field did the work. The paperwork never caught up. Ninety days later there is no record that proves it happened.

SAME TRADE

What else costs tank and vessel contractors money

TANK AND VESSEL · CFOS-04

The Plate Quote Expired Before You Won the Job

You bid the tank in March, won it in July, and bought the plate in August against a mill quote that expired in April.

TANK AND VESSEL · CFOS-01

You Pay for Coupons Before You Bill a Weld

Four welders spent two weeks cutting and testing coupons, and none of that time had a job number behind it.

TANK AND VESSEL · CFOS-07

You Finish First and You Get Paid Last

The tank has been holding water for eighteen months, the city loves it, and the owner still has your retainage.

TANK AND VESSEL · CFOS-08

Year Two Blisters Come Back to a Closed Job

The liner blistered in year two, the utility will only let you drain that tank in a low-demand window, and the job closed out two fiscal years ago.

TANK AND VESSEL · CFOS-04

You Sell in Gallons and Buy in Pounds

Seismic revisions bumped two shell courses, your plate order grew by 25,000 pounds, and the owner still calls it a 500,000-gallon tank.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CONCRETE

Eight Tons of Rebar Tagged to a Drawing That Changed

The EOR approved the placing drawings, the fab shop cut and bent to the bar list, and then somebody moved a footing. Now you own bundles tagged to grid lines that no longer exist.

DEMOLITION

Your Breaker Uses Up Tool Steel That Overhead Pays For

A hammer chews $9,000 of tool steel on one teardown and the job that used it never sees a dollar of the cost. The margin looks fine and the bank account disagrees.

DRYWALL

Lead-lined board is eight weeks and non-returnable

The imaging room's board is eight weeks out, cut to the shielding drawings, and the deposit is gone the day you release the order.

QUESTIONS

What tank and vessel owners ask

How to cover welding crew cost when mill plate is late?

The plate is six weeks late and there's nothing else on that site your welders are allowed to touch.

What does it cost?

Six weeks of a five-man welding crew plus a crane on standby is $60K to $120K with zero revenue against it and no delay claim behind it.

What do I do first?

Before you commit a crew start date, ask the mill for the rolling schedule covering your grade and width, and put the roll date on your schedule, not the promise date.

What are tank and vessel contractors supposed to be making?

Tank and vessel has 23% gross margin, 15% overhead and 8% net profit after taxes at $1M to $5M. The all-trade average is 7%, so this trade is 1 point above it. The CFOS target is 11.5%.

Which part of the system fixes it?

The step is number 06, project management. Billing dates, change orders, and notices, written as standards that work without anyone following up on them. It comes from chapter 6 of CONTROL: C.F.O.S. Construction Financial Operating System.

OR HAVE IT HANDLED

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

What a fractional CFO does for tank and vessel contractors

AUTHOR

JOSH LUEBKER

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

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