Technical Services for the Surety Company:
With increased competition in the construction industry many contractors are being forced to submit lower and lower bid numbers in an effort to secure work. To further compound the situation, more and more owners and generals are electing to bid-shop as a way to cut their cost and make their numbers more competitive. As a result contractors are taking deeper labor discounts, over estimating their material & equipment “buy-out”, under staffing projects, working to more compressed schedules and entering into new markets as a way of coping with the economic environment. Contractor’s are now at a greater risk of severe financial loss, potential default and business failure than ever before.
Paramount Associates, LLC can assist Surety companies in managing their contracting clients in a number of pre-default and post default ways.
Pre-default Services
- Pre-construction Evaluation – One of the most important aspects of a successful project is the project setup. This includes critical areas such as effective on-site office setup, administrative staffing and procedures, actual field policies & procedures, home office to field communications, performance evaluation and much more. Paramount staff can review all of the above and recommend and/or implement corrections and improvements that allow the contractor a greater chance of project success. In addition, Paramount offers the Surety other key services such as estimate analysis & overview, vendor/supplier pricing review etc.
- Periodic Evaluation – At arranged intervals, during the life of the project (weekly, monthly, quarterly, bi-annually or yearly), Paramount staff will review job progress and report to the surety the current “Actual” status of the project. This status report will provide the Surety with an unbiased opinion of ultimate project success and include recommendations to improve performance.
- Troubled Project – Should the Surety believe that the project has run afoul, Paramount can provide the Surety with a comprehensive analysis of the problem. This analysis would reflect not only the contractor’s technical & schedule issues, but also assess intangible project factors that often lead to project failure, such as site atmosphere, personal and relationship conflict, and project participant motivation. With this information Paramount will then recommend proven time-tested solutions for getting the project back on track. Paramount staff is also available to assist the contractor in this endeavor.
Default Services
Default Analysis – Should a contractor default on a project Paramount staff will descend on the site and begin a comprehensive analysis of the project to determine the following:
- Actual percentage of completion verses project billing
- Estimate and describe in detail the amount of work yet to be completed
- Audit all tools, equipment & materials on-site and in possession of the contractor & his sub-tier contractors
- Develop a material list of the same to complete the project with cost estimate
- Evaluate the labor required to complete the project
- Examine all outstanding change orders and review the project records for any additional issues that could assist the Surety in recovery of completion expenses
- Many other project related issues
Default Assistance – Paramount is also available to assist the Surety with selection of contractor & subs replacement, negotiation and resolution of outstanding and on-going change orders, provide project management oversight and assist with project closeout. Paramount is also equipped to help the Surety in the identification of the critical issues leading to the default and prepared to assist in any legal attempts to recover losses associated with the project. (See “Litigation Support Services” contained in the site)