Preparing for Success When New Opportunities Arise
In April 2017, the California State Legislature approved Senate Bill 1, a transportation funding bill. The Road Repair and Accountability Act of 2017 will generate more than $5 billion annually for road repairs and mass transit. The bill addresses a $136 billion backlog of repairs and improvements across California, creating thousands of jobs, an abundance of contract work, and growth opportunities for the construction industry.
While this is great news for eager companies, is your business equipped to handle the influx of work? How can you ensure that your company is set up for success when competing for bids?
A detailed assessment of specific aspects of your operation is the best way to make sure your company is ready. With a strong handle on the following areas, your team will have the best shot at winning and delivering on opportunities created by the transportation bill.
Evaluate Your Capacity
Assess your firm’s bonding and new bid capacity to determine if your current program can support bid opportunities over the next 12–24 months. Begin discussions with your insurance broker and bonding company about pursuing projects under the new legislation and how best to prepare.
Check Your Liquidity
Certain public entities pay faster than others. Keep this is in mind when evaluating liquidity and cash flow needs to support your operation. If you plan on tackling additional work, your company may need to increase its liquidity and lines of credit.
Assess Your Labor
Sufficient manpower will be necessary to successfully execute both new and existing projects. Labor shortages are a common obstacle in California and the situation likely will not improve over the next few years. Be prepared to address this question with your risk management team, surety, and bank when discussing your business plan.
Review Your Policies
Public entities may require businesses to hold specific insurance policies before they can work with them. Review, adjust, and enhance your property & casualty program and safety practices, making certain the following are reviewed:
- Policy Form, Endorsements, Exclusions and Potential Enhancements
- Subcontractor Agreements
- Certificate of Insurance Issuance and Tracking
- Injury & Illness Prevention Plan
- Safety Handbook
- Surety Program & Capacity
Plug In To Your Network!
Utilize local associations like the Association of General Contractors, Construction Financial Managers Association, and American Subcontractors Association to stay up to date on projects, compliance, legislation and industry trends.
Preparing for new work can be exciting and, at the same time, overwhelming. Barney & Barney/Marsh & McLennan Agency’s team of construction experts are here to walk you through this process. Contact us to receive a Risk Management Program Review.