Proven Process to Turn Troubled Restaurant Construction Projects Around
3 Min Read By John Manning, Eric Quinn
Construction projects always begin with success in mind. Of course, owners and developers often have large amounts of money on the line and are focused on maximizing investment, especially in the hospitality and leisure industry. Yet all too often, projects get delayed, bogged down, or even come to a screeching halt for unforeseeable reasons. Recently, the pandemic has caused the most significant challenges, which continues to impact labor markets and supply chains around the globe. Yet even the most complex projects that have experienced delays and issues can be turned around with the proper approach and leadership.
It’s imperative to act quickly if a project needs help. Don’t let time go by if you find your construction project stalled, stuck, or otherwise troubled. If you find yourself in this situation, begin what we call the triage process. When implemented correctly, this proven process is critical to bringing a troubled project that’s gone off the rails back and lead it to success.
Establish the Triage Team
Given your construction project is already delayed, formulating another “team” to handle the triage process might seem like a waste. Still, proper planning and execution are critical in getting your project back on track. First and foremost, you’ll need to hire a Turnaround Project Manager (TPM). Ideally, this is an owner’s representative with experience in effective turnaround project management. Next, employ expert legal counsel, because unfortunately, many troubled projects end up in litigation. A cost estimator should be next on the list to coordinate with the TPM to secure adequate funding for the project.
With the core of this small team assembled, it is essential to address the next steps together.
Identify Owner Priorities
It’s paramount to find out if cost or schedule is more or equally important to the owner. They’re the driving force behind the project and must provide clear direction to the TPM and legal counsel on what they want to prioritize. Without a clear path forward, the project will never regain momentum. Once the priorities are established, the TPM can formulate the foundation needed to get the project moving again.
Additionally, the TPM should conduct a detailed on-site assessment of the quality of the work undertaken to establish what has already taken place and what may need rework.
Coronavirus disrupted everything in 2020, and it’s best to review all contracts and permits for the project. Some contracts might be fulfilled, unsalvageable, or warrant an extension. Permits could be expired or might need renewing. Assuming someone else will handle it without any provocation or direction will lead to failure.
Questions you should ask yourself are: What contracts has the owner entered into the project? What is the status of those contracts? How much has been paid? How does that compare to what has been completed? What permits have been issued for the project? Are those permits still valid? Have code violations been issued? Also, have any safety code violations or incidents been reported?
In conjunction with reviewing the contracts and permits on the project, costs must be reviewed. The supply and labor shortages alone have caused prices to skyrocket, impacting every aspect of your project. Your cost estimator should be asking where does the project stand regarding cost? What was the original project budget? How much do the shortages affect it? Based on the owner’s priorities, what trades must be paid to get work proceeding once again? They should be breaking down every aspect to find adequate funding for what the owner wants to accomplish.
Once the costs are situated, the TPM can hire the correct contractors to get work restarted.
Spearhead Scheduling/Risk Management
Your TPM should be spearheading the scheduling in conjunction with the previous points as they aim to execute the owner’s priorities. This also includes reviewing what risk management strategies are employed. They should be asking themselves the following questions: Where does the project stand regarding the schedule? Which contractors should receive prioritization? Which parties involved have their own insurance, and what do the policies cover? What are the key target dates the owner must meet? Are those dates feasible today? Where does the project stand regarding the quality of the work in place?
Your TPM should put together a triage report covering these points for you and the legal counsel to plan a path forward. Coronavirus dragged 2020 into a quagmire of delays and distractions, but it shouldn’t be the death knell to your project. This isn’t the end of your journey; on the contrary, it is likely the beginning. This triage process is the best way to get your project back on track and headed toward a successful outcome.