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Consider the irony that contractors like to bring up when they talk about the current state of production home building: Builders, they say, are pressuring them to compress their stages of construction. But cycle times keep stretching out, partly because builders' scheduling is unrealistic, given today's labor and materials availability and the complexity of the homes being built. A domino effect ensues, as one crew after another falls behind. Haste makes waste, leading to time-consuming callbacks to fix mistakes. Closings get stalled. Buyers get frustrated. Guess who gets blamed?

In this scenario, contractors are obedient servants at the beck and call of builders whose construction schedules are slaves to their escalating sales quotas. “Builders have come into this market with brute force and act like you should be happy that you have work from them,” says the president of one large Arizona-based contracting company.

Contractors also question whether builders care a whit about cycle time delays when they hire lowest-cost installers. “There are certain contractors we just don't want to work behind due to problems we inherit from them,” says Timothy Davey, CEO of Irvine, Calif.–based DRI Services, the support company of DRI Residential, which has 650 roofing installers and generated $80 million in revenue in 2005. This might explain why more contractors and pro dealers are bundling related trades—such as drywall and painting—to gain control over consecutive stages of the construction process (see “Package Deal,” page 128).

Cycle time may be a function of buyer demand, but delays are exacerbated by many factors. Certain building products are perennially on allocation, inspectors take their sweet time getting to a jobsite, and home designs are increasingly more complex, to say nothing of environmental regulations.

Bob Ritchie, president of Riverside, Calif.–based RCR Cos., with 2,400 employees—one of the largest plumbing contractors on the West Coast—says his daughter recently purchased a house from KB Home and was presented with 85 pages of options. This plethora of preferences can extend the construction cycle, Ritchie says, if for no other reason than because the paperwork often flows more slowly into the field.

John Wiseman, president of Naples, Fla.–based Core Construction, a production management company, notes that weather-resistant building codes in his market call for high-impact windows that can weigh 500 pounds each and require two crewmen 2½ days to install, versus one man and one day for a normal window.

All of these problems could be minimized, say contractors, were it not for the gaping void in experienced management that exists at many jobsites. And any objective appraisal of cycle time delays would find fault with contractors that take on more work than their volatile workforces can handle, and then insist that quality control is solely the builder's responsibility.

Contractors begrudgingly acknowledge this contradiction, and some aren't scheduling work as far out as they once did. “If you look at our progress board, you'd see that there's nothing [scheduled] more than a week in advance,” says Dan Bollin, president of Toledo, Ohio–based Transtar Electric, whose 40 union installers work on around 150 homes per year, generating $3 million in revenue for the company.

Giuseppe DeGaetano, president of Hammonton, N.J.–based DeGaetano's Concrete, has seen his business expand by 25 percent to 33 percent annually for the past five years, to $4 million in 2005. He says the trick to keeping up with demand without imploding is to resist taking on a lot more work than the previous year. In 2005, DeGaetano's crews worked on 200 homes, and he's convinced they could handle another 50 or 60, “but not 100—we'd be running around like chickens with our heads cut off.”

There is broad consensus that the smooth handoff of construction stages between trades, as well as the monitoring of quality at each stage, depends largely on the ability and attention to detail of jobsite managers (see “Curbing Callbacks,” page 130). Pyramid Framing Contractors, a Fort Worth, Texas–based production management firm that builds 50 entry-level homes per year, works on five houses at a time and completes them all in 45 days. Pyramid's secret weapon, says owner Skeeter Wells, is its experienced jobsite superintendent, Roy Kljajic. “Staying on schedule is critical. We have no down time,” says Wells.

Quite a few contractors also link their workers' compensation to productivity. Tucson Plumbing in Arizona, which expects to increase the number of homes it works on in 2006 by 11 percent, to 4,000, empowers its 150 field technicians—more than half of whom have been with the company at least five years—to manage their own productivity and control what they earn per project. Chris McGinnis, Tucson Plumbing's president, explains that his company gives its technicians a certain amount of time to complete a stage of installation. If, say, they go 10 percent over that time limit, the company pays them 10 percent less per hour through the next evaluation period (usually a month). But if they do the job in, say, 20 percent less time, they receive 20 percent more per hour.

Ninety days after initiating this program, Tucson Plumbing realized a 20 percent increase in its “return on man hours,” or its billable hours against each day's work. McGinnis says that this has since leveled off to 14 percent, but he'd be happy if it stayed in the 15 percent range. In addition, while 50 percent of Tucson's technicians still take more than their budgeted time to complete their work, McGinnis says that measurement is deceiving because it includes techs being trained. “If you looked at our qualified, trained technicians, that number is only around 25 percent.” He adds that more than 30 percent of his installers do their work in under their allotted time.

Most of the dozen contractors interviewed for this story pay the installers by the piece to get them to work faster and smarter. Piecework without oversight, though, can be mistake-prone, which is why Core Construction, with 90 employees and $120 million in annual sales, depends on its quality assurance coordinators—“my hitting coaches,” says Wiseman—to make sure its installers don't sacrifice workmanship for speed.

STRETCHED THIN: Riverside, Calif.–based RCR Cos. is one of the largest plumbing contractors on the West Coast. But president Bob Ritchie says it's getting harder to supply manpower to builders as they expand beyond core population centers. To accommodate clients' growth, RCR has opened offices in Bakersfield, Modesto, and Fresno, Calif. Ritchie says his company also has been asked to provide plumbing installation services near the U.S.-Mexico border.

What irks contractors most, though, is when their efforts are undermined by a builder's crisis of the moment. In October, New Windsor, Md.–based Bruce Combs Drywall—which sheetrocks 700 to 750 homes per year and generates $8.5 million in annual revenue—got “blindsided, with no forewarning,” says Bill Werking, its senior vice president, by a builder that needed 110 homes completed faster so it could close a certain number by the end of its fiscal year. Werking and other contractors claim these kinds of demands are common and point their fingers at builders' jobsite superintendents, who are often either too green, poorly trained, or lack the authority to keep construction on schedule.

“The superintendent has the greatest impact on cycle time, but this position is often an entry-level job for production builders,” observes Larry Helminiak, now-retired founder of Eldersburg, Md.–based Carroll Insulation, a division of the USI Subcontractors network. Helminiak estimates that builders lose at least $1,500 for every day an unfinished house is stranded, and he disparages some builders' superintendents as “schedulers with computer skills. If a sub doesn't show up, his job is to [reschedule] the rest of the subs. Cycle time won't improve until builders pay more respect to the superintendent job.”

Contractors and pro dealers bundle different trades to make their services more attractive to large builders and to gain more control over the construction process.

Sometime in 2006, Glendale, Ariz.–based framing contractor Schuck and Sons Construction Co. plans to expand its installation services into painting and drywall, according to its president, Craig Steele. Last September, his company, with $200 million in annual sales and 700 carpenters, added stucco to its mix of services when it acquired Integrated Stucco, which employs around 400 subs.

Bundling trades is increasingly popular among contractors—and, in some markets, competitively essential. “Some builders won't hire anything else but,” says Bill Werking, senior vice president of Maryland-based Bruce Combs Drywall, about builders that seek contractors that can handle multiple stages of construction. (His company so far has resisted the trend.) Larry Helminiak of Carroll Insulation, who has been in the business since 1958, observes that insulation contractors around the country are installing fireplaces, gutters, even closets.

Outside of a handful of builders, such as Pulte Homes and Centex Corp., that have diversified into materials and labor supply, the biggest proponents of bundling trades are large pro dealers. Dallas-based Builders FirstSource offers installation services for framing, trusses, wall panels, flooring systems, stairs, trim, hardware, windows, doors, and insulation. This consolidation of materials and service appeals to builders, explains Kevin O'Meara, the dealer's COO, because it “reduces the number of vendors to schedule, thus reducing the chances for delays.”

84 Lumber Co.'s installed sales jumped 30 percent in 2005, to an estimated $300 million. The Pennsylvania-based company installs a host of building materials it sells to builders nationwide, including framing, windows, siding, and doors. Most customers ask 84 Lumber to handle the supervision of subs it uses at each construction stage, according to Bret Kelly, the company's director of installed sales.

Building Material Holding Corp.'s BMC Construction division, which specializes primarily in framing and foundation services, took bundling to a new level in 2005 when it acquired two western-area plumbing contractors, Riggs Supply and Campbell Cos.

There are still skeptics, though, who question the very concept of bundling. North Brunswick, N.J.–based Five Star Carpentry, which installs framing, finished carpentry, kitchen cabinets, and tile, stopped installing drywall and doesn't plan to get into other products. “We've found that contractors that claim to be jacks of all trades are masters of none,” says Five Star owner Nathan Levitt.

Builders and contractors spend too much time fixing construction mistakes that might have been caught earlier though systematic supervision and training.

James Glowania thinks there's a simple solution to construction delays: Builders and contractors should subscribe to the NAHB's National Housing Quality (NHQ) Certification program. Glowania is general production manager for Wauconda, Ill.–based Prate Installation, a $25 million business with 200-plus installers, and one of the few roofing contractors nationwide that are NHQ-certified. He says the program calls for pre-production meetings with builders to determine manpower and material needs, which “gives us structure. We know sooner when [a house] will be ready for us.” While declining to quantify Prate's improvements in days, Glowania says that since the company was certified in 2004, its workers take 10 percent to 14 percent less time to complete their stages of a house.

Ed Caldeira, a Maryland-based quality consultant, compares how some builders and contractors address construction problems as they pop up to a game of “whack-a-mole.” As an alternative, Caldeira recommends “saner” jobsite supervision that focuses systematically on “first-time quality” as a way of significantly cutting the days needed for callbacks. (Caldeira claims one client, St. Joe Towns & Resorts, shaved 36 days off its cycle time by using his formula.) Caldeira says every project is susceptible to recurring mistakes—such as hangers that aren't nailed properly—that installers can be trained not to miss. He also reminds clients that first-time quality and on-time delivery are “key factors” in buyer satisfaction. “Builders should expect defect-free work from contractors, just as buyers expect it from builders,” he says. “Otherwise, builders will be left holding the bag.”

Contractors close costly gaps in building stages.

Wheeler's Building Materials, Rome, Ga.

Schuck and Sons Construction Co., Glendale, Ariz.

Prate Installation, Wauconda, Ill.

Carroll Insulation, Eldersburg, Md.