For the love of money

July 2010 » Columns » RISKY BUSINESS
John P. Bachner

You’ve maybe heard it said, “Money is the root of all evil.” Not so, for two reasons. First, money is the lifeblood of all economies and, by extension, all civilizations. Second, this is a corruption of the original phrase and the sentiment it expresses. Emanating from 1 Timothy 6:10, a loose translation of the verse is, “The love of money is the root of all evil.”

Love makes all the difference. Love distorts what we see and hear and infects our decision-making faculties, causing us to make poor choices and do stupid things. And when that love manifests itself in business, “stupid things” take the form of bad business decisions. In fact, the love of money probably leavens 90 percent or more of the claims that arise from civil engineering projects gone wrong.

Evil can infect projects at any link in the chain of events that forms a project’s central artery, but let’s assume — from your perspective — it begins at the point of client and client-representative acceptance. Obviously, because client and client-representative acceptance gives you a potentially life-long liability, you want to move with care, unless you love money. Then enter, stage left, the idea that your failure to accept even the worst client with the worst budget and the worst schedule, plus the worst one-sided contract conditions being insisted on by the worst client representative, would mean losing all that forever. Ahhh, love. It’s a many-splendored thing.

What you should do, in every case, is learn about the client and, through discussion, learn about the client representative. What is the client organization’s history? Does it commonly pursue projects with too little funding? Is it a public entity that frequently uses its public status to avail itself of legal favoritism (e.g., no statute of limitations) that can encourage it to use you and your firm as a deep pocket? In short, has it demonstrated a love of money? And what of its representative? Irrespective of what the client has or has not done, what’s the representative’s relationship with money? Are the two (as they say) intimate? You need to talk with the person to learn. Some civil engineers don’t want to be bothered by bad news and avoid such conversations because, when you’re in love, the whole world is beautiful.

And the project is something else you need to learn about. “We’ve never done a tunnel before, but how hard can it be?” you say. “Let’s try!” Yes, love will find a way.

Assuming you have done “it” before, you need to know if the client and client representative have. If not, they need to be educated. And no matter what, you need to know about the budget and schedule — is it reasonable, optimistic, or just plain nuts? If it’s anything other than reasonable, you need to speak up because the apple cart will get upset sooner or later. The question is, do you want to be sitting in it at the time? “It probably wouldn’t hurt that bad,” you say. Love me tender.

So the budget’s a little tight. And the way to stretch it is to speak glowingly of what in reality is a skimpy, insufficient, low-cost scope of service — the kind of scope that history tells us results in more expensive construction and life-cycle costs, and a higher likelihood of assumptions, claims, and disputes.

And how will construction work? Will contractors be selected on the basis of low bid — the system where the client selects the lowest bidder, but the lowest bidder always gets paid more than it bid because it found opportunities for exploitation in the plans, specifications, or contract? Why would experienced owners use a system that is so obviously bogus? Why would a contractor worth its salt participate? Because the system is based on love, and love works in mysterious ways.

Knowing that a system based on love can lead to quality deficits, most sophisticated owners retain construction materials engineering and testing (CoMET) consultants to implement a quality assurance (QA) regimen — a program of periodic observation and testing to assess the degree to which contractors are actually trying to meet specifications. Obviously, the more rigorous the QA regimen, the more reliable the results. But love makes all too many owners select the cheapest CoMET provider they can, justifying their love through the patently absurd assumption that all CoMET consultants that meet the same standard — the least acceptable criteria — are the same. And then the owners cut the scope anyway, assuming that most contractors want to do the work as well as they possibly can. Therefore, the CoMET consultant frequently is prohibited from performing a reasonably thorough, effective service. So love is blind, or makes others so.

You want a risk-management silver bullet? Make signs that read, “The love of money is the root of all evil,” and place one in every office and cubicle whose occupants need to focus on being professionals.

John P. Bachner is the executive vice president of ASFE/The Geoprofessional Business Association, a not-for-profit association of geoprofessional firms — firms that provide geotechnical, geologic, environmental, construction materials engineering and testing (CoMET), and related professional services. ASFE develops programs, services, and materials that its members apply to achieve excellence in their business and professional practices. He can be contacted at john@asfe.org.


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