Commercial Integrator October 2022 - 24

COVER STORY
'We can't get to every job this
year. So, which ones can we
do, at the budget customers
are wanting to do it in,
and how can we allocate
resources accordingly?'
- Mat Hennings, formerly
vice president of finance
with Communications
Engineering Company
to be fully responsible for our subcontractors
we bring onto the job site. " But assuming
your firm checks those boxes, this can be an
avenue to meaningfully boost revenue.
" Our philosophy here is supplementing
our existing workforce with subcontractors
will help us widen the pipe, so to speak,
so we can recognize more revenue in any
given month and burn through more of that
backlog, " Habben declared. Just as importantly,
subcontractors can bring unique skill
sets that genuinely bolster an organization's
abilities. " In many cases, " he acknowledged,
" depending on their specialty, subcontractors
can perform work more efficiently and
more profitably than we can. "
Hennings echoed, " I think that is a very
good avenue, where you can continue to
drive [revenue]. And, again, if you don't
have the work or can't get to the work,
you don't have to continue to pay those
folks. " Another option, Hennings said, is
temp labor. He rhetorically asked webinar
attendees if the staffers they've invested
in and coached up can lead a crew of
temp laborers. If so, he added, going that
route can almost be akin to instituting a
technical internship program. As Hennings
described it, " If you've got some of those
temp laborers who have proven themselves,
well, now, you don't have to go out,
interview folks and take a guess. "
All that being said, however, the panelists
sounded a note of caution for integrators
considering downsizing their in-house
workforce during these difficult times.
Cashflow remains top of mind, and, yes,
some integrators have contracted in recent
24
months. But, according to Habben, " My
fear is, when the supply chain repairs itself,
resizing - or getting those employees back
- is going to be very difficult, and they're
going to be much more expensive down
the road. " Thus, it might make more sense
to view subcontracted and temp labor as
additive resources to drive revenue, as
opposed to substitutionary resources. Wilson
closed with another word of warning,
urging integrators to closely read the terms
and conditions of client contracts. Some of
them explicitly disallow temporary labor.
Protective Contract Language
Continuing on the topic of contracts,
Wilson offered essential advice to allow
integrators to protect themselves in these
challenging times. He started by referencing
force majeure language that NSCA has
crafted in consultation with other experts.
" It gives you some protection about the
availability of products that are outside of
your control, " he said. What's more, NSCA
has developed language for a waiver of
delivery and a waiver of usage of the technology
in a permanent, completed state.
If the GC or owner accepts that language,
Wilson explained, it would alleviate problems
stemming from liquidated damages
clauses. That, therefore, would protect
integration businesses if materials are not
delivered in the timeframe within which
your firm pledged the system would be up
and running. " We've helped significantly
with that type of language, " Wilson noted.
It's essential to ensure quotes, proposals
and contracts are not undercutting your
firm's potential for profitability. That's
why, Wilson said, " We're starting to see
more and more of our members that are
pulling old quotes off the street. " In fact, he
remarked, a large member company pulled
back 400 proposals. One change being
made across the board is dramatically
decreasing the validity period for quotes.
" We've backed ours down to 30 days,
and we're toying with the idea of taking
that down to 14 or 15 days to protect our
business, " Habben said frankly. A quote
with a 90-day lifespan can be a recipe for
disaster because, he emphasized, " Your
costs are going to go up. " This aligns with
Wilson's exhortation for integrators to be
" ...protecting ourselves from the uncertainty
of the surcharges and the price increases
and all that. "
It's not just force majeure language
and expiration dates, though; protective
language can extend far beyond those.
According to Habben, his firm has added
a chip-shortage clause. Moreover, he's
sought to insert contract language to
'Listen to your own code of
ethics and your business
best practices - your core
values. Listen to that,
rather than people just
trying to make an easy
sale.'
- Chuck Wilson,
CEO of NSCA
Commercial Integrator OCTOBER 2022
commercialintegrator.com
http://www.commercialintegrator.com
Commercial Integrator October 2022

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