top of page

The Importance of Continuous Monitoring in Construction

Thomas Kellogg


In the construction industry, we have traditionally embraced a “one-and-done” mindset when it comes to Subcontractor due diligence, making “prequalification” a buzzword. While this approach may provide a convenient starting point, it leaves us vulnerable by relying on outdated snapshots of risk. Construction projects are dynamic by nature, influenced by numerous businesses, fluctuating markets, and evolving project circumstances. Much like driving a car requires constant vigilance to navigate detours, changing speed limits, and unforeseen obstacles, managing a construction project demands continuous risk assessment to stay on course.

 

The Rapid Evolution of Businesses

Businesses, especially smaller ones, can experience dramatic changes in a short period of time. A sudden influx of work might overwhelm a Subcontractor’s resources, while an economic slowdown could suffocate them under fixed expenses. Leadership transitions, staffing fluctuations, and shifting economic factors—such as office lease costs or rising interest rates—can materially impact a Subcontractor’s ability to deliver. Construction work is not an assembly line; it relies on effective teams, problem-solving, and skilled leadership. So, the departure of a key leader or the scarcity of skilled labor can ripple through a project and create vulnerabilities. A one-time prequalification process assumes that none of these variables will change during the project’s lifespan. Without regular reassessment, we risk being blindsided by evolving conditions that could jeopardize project success.

 

The Impact of Market Dynamics

Markets, both local and global, shape the construction landscape in profound ways. Global supply chains influence material availability, while national and regional markets impact lending conditions and development spending. Local Subcontractor markets vary significantly, with some areas boasting an abundance of qualified bidders while others face severe shortages. Smaller markets, in particular, are highly susceptible to the impact of national economic fluctuations that can exacerbate the risk of default. A single Subcontractor default in a strained market can have cascading effects, disrupting multiple projects, and amplifying risk exposure. Recognizing these dynamic conditions requires constant monitoring, not a one-time review.

 

The Danger of Overloading Subcontractors

Every decision we make today influences the risks we face tomorrow. Awarding more work to a Subcontractor is often seen as a sign of confidence, but it can inadvertently set them up for failure. Imagine a Subcontractor who passes prequalification and wins multiple projects from multiple clients. Can their leadership manage the increased workload? Do they have the resources to procure materials and augment their labor force without sacrificing quality? Overloading a Subcontractor with too much work too quickly can lead to missed deadlines, turnover among skilled tradespeople, and, ultimately, default. Worse, a single default can ripple across multiple projects, jeopardizing timelines and budgets. To support sustainable growth, we must continually evaluate the capacity of our Subcontractors—not just once, but throughout the life of each project.

 

“Prequalification” is not enough. Construction projects are too dynamic, and the stakes are too high to rely on a one-time assessment of risk. Continuous monitoring enables us to identify emerging challenges and adapt to changing conditions, safeguarding both projects and Subcontractors from preventable failures. By embracing ongoing qualification practices, we can build a culture of resilience and sustainability—one where risks are actively managed, opportunities are thoughtfully balanced, and success is shared by all stakeholders. Let us move beyond snapshots and commit to seeing the full picture, every step of the way.

 

 

 


Completely Unrelated Trivia Treasure: According to The Athletic, the Denver Broncos consume about 700 Uncrustables (the Smucker’s PB&J snack) per week, the highest in the NFL. The Seattle Seahawks are in second place, at 320 per week.

 



Maple Insight provides ongoing monitoring of Subcontractor business health and performance throughout the duration of a project to continuously update estimates and default projections.

33 views

Stay in the know!

Thanks for submitting!

Maple Insight

1550 Larimer St, #660

Denver, CO 80202

T. 720-689-8061

E. info@mapleinsight.io

​        LinkedIn

  • LinkedIn

Or contact us here:

Thanks for submitting!

© 2023-2024 All Rights Reserved. DefaultDoc® is a registered trademark of Maple Insight, LLC.

bottom of page