The Super Wrap-Up Administrator
October 2000
The job of the wrap-up administrator is a
super-human one. This article breaks down the myriad of wrap-up administrative
responsibilities by project phases, explaining what tasks are performed in each.
by Richard
Resnick
Tanenbaum Harber
Co., Inc.
It's a bird! It's a plane! No, it's the super wrap-up administrator!
Here is a position that few aspire to but many fall upon by accident sometime
in their career. It takes a super person to tackle the myriad of responsibilities
performed by this individual. In addition, there are some special personality
traits the administrator must possess to succeed. They really do need to jump
tall buildings at a single bound.
Why do you think that the greatest misconception of wrap-ups by suspicious
owners is the issue of the administrative burden? "You mean I have to do all
that?" the owner asks, referring to the overwhelming administrative tasks. "No
you don't," I usually answer, "Because the brokerage community has professionals
experienced in construction projects and wrap-ups in particular who will take
this burden off your shoulders."
Before we go any further, it might be wise to explain this administrative
concept briefly. Let us go back to that first article in which we discussed
the risk manager being told of the new headquarters project. (Refer to Wrap-Ups and the Issue of Critical Mass.) Assuming
this will be a wrap-up, the individual who makes all the paperwork disappear
on behalf of the owner is also the one person responsible for coordinating all
the administrative functions associated with the wrap-up. More on those actual
functions later.
Administrator Position
Can you imagine what a job description for an administrator would look like?
They must be able to write with both the left and right hand in order to handle
all the paperwork. They must be able to listen to a multitude of problems from
at least six different people at the same time. How about being strong-willed
enough to tell a contractor, "Hey! Get that hard hat on!" while enrolling another
group of contractors and at the same time presiding over a pre-bid meeting.
Sounds onerous, does it not? Well we should pause and really give thanks
to those who tread these rough waters for simply the pride of doing a good job.
They are the glue that keeps it all together for the wrap-up project.
Okay, so I'm painting a somewhat exaggerated picture—but not by that much.
I often tell new clients and wrap-up prospects that the purchase of the "insurance,"
or in other words the transactionary process, takes on a lesser role in wrap-ups
then other types of insurance programs. "Wait, you mean to tell me that the
insurance transaction means little?" I am often asked. Not entirely, but what
I am saying is that the selection of the administrator is as critical an issue
as which insurance company to select.
The administrator's job starts very early in the construction process. Quite
frankly, if I were looking for an administrator, I might look for someone with
construction project experience. A good administrator is really just an extension
of the construction manager's staff—someone who understands the construction
process very well. It certainly does not hurt for that person to possess some
basic insurance knowledge.
Early on, the administrator needs to commence a dialogue with the site personnel
on a wide range of subjects, including bidding procedures, award notifications,
contractor orientation meetings, etc. Oh yes, in case I neglected to mention
it, the administrator also needs to know a little something about claims management
and job site safety.
Administrator Tasks
Let us examine specifically those activities an administrator will be responsible
for. We can place these into four categories: pre-bid, pre-deployment, construction,
and post-construction.
Pre-bid. First of all, the standard subcontractor
insurance language of the contract needs to be amended with a special insurance
addendum. This will include coverage information on the wrap-up, responsibilities
of the subcontractors, and forms that are necessary to complete for proper enrollment
into the wrap-up. The administrator might also attend a pre-bid meeting, at
which time they must instruct the contractors on the implications of the wrap-up
and in particular advise them on the bid deduct process. Just think, at this
point not one shovelful of dirt has yet been turned.
Pre-deployment. This is the period prior to
the contractor actually being on-site. It is not always possible for the enrollment
process to take place prior to this point. In a perfect world, the administrator
would know of a contract award as soon as possible; which is hopefully prior
to the on-site mobilization. Then, there is enough time to have the contractor
properly enrolled. Quite often, however, things just do not seem to work that
way. Has this ever happened to you? "Hello, we need to mobilize tomorrow, can
you do the enrollment at the same time?"
Well, of course, the administrator also plays the role of miracle worker.
There is no task too big or small. How about this one? "We need to report a
claim. We have an injured worker on-site." (Doesn't seem as if it is a big deal.)
The real bad news is that the contractor was never enrolled (oops!). What do
we do now?
So, as is obvious from the above, the enrollment process is quite serious.
A procedure should be established and signed off by everyone on the site with
procurement responsibility. The administrator can only work with the information
they have on hand. That is why on certain projects, such as those under a fast-track
method or those involving a greater number of contractors then usual, it may
actually pay to have the administrator on-site and sitting in the same trailer
as the project management personnel. Also, part of the enrollment process is
issuing of certificates of insurance, providing a field procedure manual, and
monitoring those infamous off-site certificates.
Construction. Did I neglect to mention the
need for the administrator to be a "data input" person? The administrator collects
all the information generated by the wrap-up program and uses the output to
advise the sponsor on a whole assortment of information (i.e., enrollment status,
claims reports, safety issues, etc.). During this phase, workers compensation
policies are being issued for enrolled contractors, claims are being reported,
enrollments are ongoing, payroll reports need to be collected, and contractors
need questions answered when necessary.
Post-Construction. It is imperative to the
entire process that all contractors complete the necessary paperwork once their
work is finished. The administrator needs to work closely with the project people
to coordinate the checklist for contractor demobilization. In particular, this
is when the contractors' final payroll audit should take place and any allowable
adjustments in insurance credits be accounted for.
Conclusion
So, you think it's easy being an administrator. Well, hopefully I have shed
some light on that misconception. It is a demanding but also a very rewarding
task. The administrator can look at the project once completed and know that
they contributed every bit to the overall success of that project without even
lifting a hammer. Or was it just a different type of hammer they wielded?
Opinions expressed in Expert Commentary articles are those of the author and are
not necessarily held by the author’s employer or IRMI. This article does not purport
to provide legal, accounting, or other professional advice or opinion. If such advice
is needed, consult with your attorney, accountant, or other qualified adviser.