Lack of timely project decision-making can amount to big costs later, says Robert Prieto, senior vice president of Fluor Corp., in a new analysis for PM World Journal. While project delays and the resulting cost impacts are generally linked to changed scope, rework or productivity loss, "the cost of a lack of timely decision-making is seldom reflected in project governance processes," says Prieto.
He says that for a contractor, delays are even more "deleterious" when they are of longer duration and at a later stage in the project. "A $4-billion project, not uncommon in the world of large infrastructure and industrial projects, that is subject to a delay of one day in decision-making would increase an owner's cost by up to $10 million," says Prieto. "Was the day lost in decision-making worth it?"
Movers and Shakers
Bechtel Group Inc. has elevated President William N. "Bill" Dudley to CEO. He succeeds Riley P. Bechtel, who remains as chairman. Bechtel had been CEO since mid-1990. Dudley, the company's first non-family CEO, had been president and COO since 2008. Bechtel also promoted Jack Futcher, president of its oil, gas and chemicals unit, to corporate executive vice president and named Brendan Bechtel to replace him.
John Entsminger was promoted to general manager of the Southern Nevada Water Authority and Las Vegas Valley Water District. He had been senior deputy general manager for both agencies. The water authority is building an $817-million third intake at Lake Mead, which supplies water to 90% of southern Nevada. Entsminger succeeds Patricia Mulroy, who retired on Feb. 6.
Continuum Advisory Group, a Raleigh, N.C., management consultant to owners, has named Gretchen Gagel president. She was an assistant business school dean at the University of Denver and a consultant with FMI Corp.
Morley Builders, Santa Monica, Calif., named Jan Karl vice president. She was a vice president at Rudolph & Sletten Construction.
Kaiser Electric, a Fenton, Mo., electrical contractor, has elevated Ken Naumann to president, replacing Steve Glacin, who has left, says the company. He was formerly vice president.
'High' Priority: Firms saying no to pot
Marijuana legalization may be gaining in states, but the message many contractors are giving employees remains: "Just say no." Voters in Colorado and Washington legalized private marijuana use in November 2012, and Colorado began retail sales of pot on Jan. 1. Washington will soon follow suit, with at least five other states—Alaska, Tennessee, Arizona, Kentucky and Florida—reportedly considering legalization. Alaska's OK could come in August. Even so, firms and their attorneys say that even the limited personal use of marijuana, legal or not, runs afoul of the industry's stringent safety and drug-use policies and could result in termination.
Street Scene: Equipment on a roll
Wall Street Analysts are getting more optimistic about equipment market improvement in 2014. Jamie Cook, Credit Suisse lead industry sector analyst, said that for the week ending Feb. 7, stock prices for equipment and machinery companies the firm tracks rose 0.7% compared to a 0.5% overall market drop.
"The truck names pulled the group up," she said, noting that orders for U.S. heavy-duty trucks "posted a huge surprise to the upside." Cook said the result "gives support to signs that the U.S. economy is recovering."
Credit Suisse said Caterpillar's U.S. dealers see markets up between 5% and 7% this year, boosted by expected gains in residential and commercial construction, although "overseas markets remain dismal, and there are no signs mining has improved," said Cook. She predicted more spending linked to growth in North American petrochemical markets.