18 PERFORMANCE MEASUREMENT

Simple and effective measurement of performance is rarely seen in the construction industry. For example, most construction buyers do not track contractor or designer performance in terms of project metrics such as dollars, time, change order rates, delay rates, causes of change orders and delays, skills sets, and key individuals. If a client holds an opinion of a contractor's capability to perform, it is typically a general perception based upon either past firsthand interaction with that contractor or what the client has “heard” about a contractor's ability, including word-of-mouth and marketing or branding by the contractor. This opinion of performance is the basis for most client-contractor relationships (outside of a specific project setting). These relationships with a client organization are important to a contractor and their ability to secure work, have a confident revenue stream, and attract new business.

A client-contractor relationship is not sustainable over time and alone is not sufficient to be a reliable business practice. The reason for this is that a construction company does not actually have a “relationship” with any client organization. The actual relationship is between individual people in the construction firm and individual people in the client organization. People are not sustainable. They retire, get new jobs, win the lottery, etc. Many contractors have seemingly gone from having a great relationship with a client to having ...

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