After reading a Bloomberg article on Wednesday, Feb. 9, on Construction Defects, and preparing a presentation for the 2011 IRMI Construction Risk Conference, it has been deemed necessary to blog on the ongoing topic of Construction Defects. We’ll be blogging weekly on Wednesdays starting next week, and encourage your comments, questions, and readership.
First of all I would recommend that everyone read the article (here) released on Feb. 9 by Bloomberg, discussing the financial implications of flaws in construction specifically during the housing boom from 2000 to 2005. The article focuses on flaws increasing because construction increased and that we are just now seeing the financial implications of said flaws. We would argue that while this may be true, the problem of construction defects is still alive and well today. Let’s break down a few points from the article:
“Horton, the second-largest homebuilder, put its net liabilities for construction defects and other claims at $319.8 million on Sept. 30, more than double the $137.2 million on Sept. 30, 2003. The increase was due to the number of homes built, not any decline in quality, said Horton spokeswoman Jessica Hansen.”
So there is no “decline in quality” but $319 million in defects or other claims? I’m confused. I guess we need to define “quality” as either “good quality” or “poor quality”. If, as the article states, payouts for defective construction are built into the finances of major homebuilding companies, why wouldn’t you rather “build-in” a Quality Assurance Observation program? Shoot, even take half of what you’re “building into the finances” for defects and dedicate that to a QAO CertifiedTM program.
“Our homes have been built to the same consistent quality standards for years,” and the construction boom didn’t change that, he said.
The company offered to make sheetrock repairs to the 443 houses in the subdivision and 221 homeowners accepted, Ames said by e-mail. The accusations in the lawsuits are unfounded, he said.
443 homes in need of repair would lead me to believe the “quality standard” should be addressed. And knowing the reputation of these folks and their dedication to “improving the quality…and delivering the best home”, I’m sure that it is being addressed – we would just ask why not look at a QAO CertifiedTM program with a proven record.
The “same consistent quality standard” begs the question: Does this mean “consistently good” or “consistently poor”? I also wonder to myself, do these big builders “consistently” have this many claims? If so, how about trying our QAO CertifiedTM program? It certainly couldn’t hurt, and what the heck, what if it saved you a mere $50 million.
The article seems to lean toward these defects being the result of the increase in construction during the boom rather than the true cause of these defects being lack of quality construction verification.
“There’s a whole list of ways you can screw up the exterior of a building, even something as simple as the vent for a clothes dryer,” said Alan Mooney, president of Criterium Engineers, a home inspector in Portland, Maine.
We have found this statement to be all together true and have developed a program that mitigates construction defects throughout the course of a construction project. Quality Assurance Observation (QAO CertifiedTM) can be implemented on any construction project. The beauty of QAO CertifiedTM project lies in the fact that we verify through observation, at pre-determined incremental stages, that particular assemblies are constructed according to the plans, specifications and manufacturers product requirements. This is our way of ensuring that all the ways the building exterior could have been screwed up, are not in fact screwed up. When we find issues such as clothes dryer vents not correctly installed or waterproofed correctly, it becomes an Action Item that must be formally cured quickly – not left until the end to be caught in a Punch List. The QAO process takes place throughout the entire project and becomes part of the culture of the project. Getting a building “QAO CertifiedTM” is one part of the process in creating a structure with true “Sustainable Quality” and we call it “Beyond Green”.
“A lot of construction flaws slipped through the cracks,” he said. “We’re just on the cusp of it now.”
Defective construction continues to “slip through the cracks” even today. This problem does not disappear when construction booms end, it merely becomes less prominent. Programs such as “QAO CertifiedTM” are the only way to truly know that your structure is being built exactly as specified and reduce your project’s risk of suffering from costly construction defects – not to mention preserving your brand. For more information on how to get your project “QAO Certified” contact OAC Management Incorporated today.
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