5 Tips for Reducing Risk in Your Commercial Construction Project

Whoever came up with the saying “time is money” must have worked in construction. Without proper planning, it’s easy to waste both time and cash. The earlier you can spot risks and plan for potential problems, the more likely you are to keep your profits.

Greg Duyka, a senior product training specialist at ConstructConnect, knows a thing or two about this. With 27 years at ConstructConnect and 20 years in estimating and project management, Greg has tackled everything from high-rises to historical restorations. Here are five tips he recommends to reduce your risk, based on his years of real-world experience.

1. Location Matters

Picking the right project location isn’t just about the job site—it’s about what’s surrounding it. Greg advises to be thoughtful about investing in projects that can help support your top and bottom line.

“I once had to manage a job that was a good contract but there was no easy way to get to the site. I ended up having to fly,” Duyka says. “Then I had no manpower. When you go far away from home base you’re dealing with inspectors, suppliers, people that don’t know you.”

When exploring projects in other markets, you also need to consider the qualifications of local crews to help you with that job. “I worked a job where I needed over 4,000 feet of curb and gutter poured,” Greg says. “I asked the contractor to meet me on site, and when he got there, he said, ‘I can do this, but I don’t have the tools’.”

Using software like ConstructConnect® Project Intelligence can help you discover construction job leads in the markets where you want to work and connect you with qualified contacts.

2. Know Who You’re Working With

Every project has a team, and every team member—whether they’re owners, architects, or subcontractors—has a reputation. Do your homework on their business practices.

Greg suggests going to events hosted by trade groups like the Associated General Contractors of America (AGC) and the American Institute of Architects (AIA).

Bid management software tools can also help you better evaluate bids from contractors by evaluating the contractors themselves, based on their safety, performance, and financial records.

3. Get Smart About Materials

One of the quickest ways to go over budget is by choosing the wrong materials or using them incorrectly. In an industry where only 31% of construction projects finish within budget, it’s important to keep a close eye on areas where costs can get out of control.

Greg shares some examples to show why doing research is key:

“I was part of a big job that needed these 30-foot-wide rolling doors that had to come a long way by train, from Canada. Then, they needed a special heavy-duty crane just to unload them and a half acre of space to store them.”

Another time, he managed a historical renovation needing custom woodwork, “It was originally done in the 1800s. There aren’t many people alive who know how to do it anymore! There were guys in England who could do it, so we had to arrange to have them come over and get it done.”

Lesson learned? Plan ahead for special tools, equipment, or skills and budget accordingly by getting as much information about a project as you can before you send the bid.

4. Be Realistic About Deadlines

Finishing a project on time is another way to stay within budget, but it can be tough if a developer has unrealistic expectations. Sometimes, developers may want to rush a job, but it’s important to be honest about whether it can be done on time.

“I once had an owner ask me to do a 200-room hotel, which is an eight or nine-month job, in six months,” he says. “They’re paying interest on that loan, so they’re always going to try and bring things in quicker.”

Duyka says there are some warning signs that your project may have inherent risk. For example, owners sometimes include a bonus/penalty clause in their contracts: “An owner may try to take money out of your fee if you don’t meet the deadline, or the reverse, they’ll give you a little extra if you finish ahead of time.’”

It’s best to get a clear view of all the plan documents for a project ahead of time. Using digital takeoff software helps ensure your measurements and counts are correct before creating an estimate. It will also help you have more confidence about delivering to agreed-upon deadlines.

5. Be Careful with Bonding

Strong bonding is vital for growth in commercial construction, but it’s important to manage it carefully.

“First of all, building up strong bonding capacity takes a while. When an agency agrees to bond you, it’s like a job interview. Then, you build up your capacity over time,” Greg says.

He also warns that a company can reach its bonding limit too quickly if they’re not careful “I’ve seen companies reach the limits of their bonding capacity and miss out on being able to bid on the easy in and out projects.”

Strategy is key—balance long-term growth with immediate opportunities.

Final Thoughts

Greg’s tips can help contractors avoid problems and make better decisions on their projects. Using leading tools like ConstructConnect’s project data and takeoff and estimating software can save you time, improve the accuracy of your bids, and be better prepared when you get ready to work on your chosen commercial construction projects.