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Microsoft Project scheduling software helps Paragon General Contractors, a high-end remodeling and home building company in Point Richmond, Calif., hold homeowners, designers and subcontractors to deadlines.
Paragon president Bill Hamilton says the firm undertakes six to eight $1 million-plus projects at a time along with multiple projects from $5,000 to $1 million. The tech-savvy businesspeople who form his client base understand that the remodeling process is difficult to control but are concerned about price on their multimillion-dollar projects. So he arranged a fee structure driven by job duration, not a percentage of construction costs.
“Our clients could see that charging a percentage of total costs was not a motivation to save them money,” Hamilton says. “So we devised an alternative structure where the ability of the owner, architect and consultants to make timely decisions drives our fee and keeps the project on schedule.”
Paragon establishes a thorough critical-path schedule as well as a detailed hard bid for remodeling projects. “The schedule includes at least 10 to 15 decision milestones for everyone involved in the project,” Hamilton says. Paragon then must get the owner and all other parties to buy off on the schedule and the decision-making process it establishes.
“It helps make the schedule equally important to the budget, as it should be,” Hamilton says. If the project goes past 10 months because of circumstances beyond Paragon’s control, the company negotiates additional fees beyond the fixed-price contract, relying on Microsoft Project’s detailed documentation ability.
“This billing process has removed the concern that builders are not motivated to rein in budgets and save money,” Hamilton says. “Designers and consultants realize they will be held to a higher standard of timely performance. It has been a huge benefit with professionally run subcontractors because it helps them be more efficient with their resources.”