The economists definition of 'recession' does not always sit kindly with the commercial realities of the construction industry, and within the industry some sectors react far quicker to external factors than others.
At DGA we recognise that many of our clients are finding business difficult, and we have responded by packaging together services that can be offered on a retainer basis over a specified period, addressing specific issues associated with operating in a challenging business climate. These themes are:
Mitigating Risk
Relieving Distressed Projects
Managing Insolvency
Applying Recession Management techniques is a case of tweaking standard commercial processes just that little bit further. For example, running models to examine the impact of potential supplier disruption, or subcontractor failure; checking your levels of contractual protection through bonds and warranties etc, and costing alternative sources and options to recover loss through 'project engineering'. Examining contract details with regard copyright, materials ownership and insurances if any of such clause needs to be implemented may have unintended consequences that require review.
The impact of distressed projects on your business can be mitigated if the early warning signs are observed. Losses may be unavoidable, but business crises frequently can, with prompt positive action. We offer detailed costing of options whilst options still exist; fully understanding the costs to completion, the consequences of breach, suspending works, re-mobilising, acknowledging damages, terminating subcontracts, re-negotiating sub-contractors, changing suppliers and any combination thereof may or may not help, but cannot be rationally considered without proper cost comparisons.
Where distress is terminal, the consequences of insolvency have to be faced. Many of the above options still have to be considered, albeit from a different perspective, but in addition we can also help clients with the management of the insolvency process from helping to ensure the effective security of the site, advising on obligations and entitlements under bonds and guarantees, to the negotiations with Insolvency Practioners and Administrators.