Giesbers Development and Construction stronger out of the crisis through cooperation with the right partners

In an up market, most contractors go out of business. Sounds contradictory, doesn't it? Yet it is. But look at it this way: in times of crisis, many general contractors are forced to take on a project at a competitive price. They rely on subcontractors and suppliers to also be able to buy competitively. However, as soon as the market recovers, subcontractors and suppliers (logically) charge higher prices again. As a result, the contractor risks bankruptcy if he has not covered the risk of price increases, especially when a project is overrunning. He can then no longer offer his customer what he promised. To prevent this, contractor company Giesbers Ontwikkelen en Bouwen made a turnaround during the credit crisis. In the meantime, they have been pursuing a new policy for several years, with legal support from Poelmann van den Broek.

John de Beijer, Development & Commercial Director at Giesbers, says: "When the credit crisis was nearing its end, we knew we had to take measures to anticipate this. We adjusted our policy on a number of points: projects with a shorter lead time, spreading out over different market segments, preferring a few more small projects to a number of large projects, price indexation agreements with clients and our project partners (consultant/subcontractors/suppliers) and we started looking for the right mix between in-house developments and developments commissioned by third parties. There are legal aspects involved in everything, and we have been supported in this by Poelmann van den Broek for many years."

Contracts for the future

Giesbers enters into contracts with various parties for each project: including clients and project partners. "Every contract contains project-specific aspects," says de Beijer. "Of course you have the standard contracts with standard guarantees and clauses, but the challenges are in the project-specific risks and innovative projects. For example, with so-called NOM homes (Zero Mileage Homes, ed.) you run into all kinds of new aspects, uncertainties and risks. That means that you now have to lay down in contracts how to deal with these in the event of future calamities. That's quite a challenge."

The right partners

Poelmann van den Broek has been the regular legal partner of Giesbers Ontwikkelen en Bouwen in Wijchen for years. De Beijer: "Together with our contract manager and project leaders, they flesh out all contracts. These often contain complex aspects. Where we are working on innovation, we look for solutions together to limit risks for the contract parties. But you also have to be able to respond to significant fluctuations in the price of materials to be purchased. The contract then sets out how you enable movement within the market. Poelmann van den Broek reads the risks with all our contracts and advises us how to limit them as much as possible.

We greatly value good cooperation with permanent project partners. It is also a question of awarding a contract: if you have a good cooperation, you will not only go through the peaks together, but also through the troughs of the market. We do that with our suppliers, subcontractors, but also with our consultants, including legal ones. I can't imagine that we would have to explain our way of thinking every week. With Poelmann van den Broek we are on the same wavelength: we understand them, they understand us. They are a partner with whom we can also spar on a strategic level. They think along not only about how something is now, but how something might be in the future. What can happen on the path you're on now? How can we best anchor that in a contract? Precisely advice on those kinds of aspects is very valuable. We now have virtually no delivery problems in this hectic construction market. That is really a consequence of choosing permanent project partners."

Being adaptive

One of the most important aspects within the construction industry is to be adaptive, de Beijer said. "The customer determines what we are going to do tomorrow. You have to be able to respond to that quickly in every possible way. The rate at which our market is changing is high and only getting higher. You have to think every day about how to respond to that tomorrow. In changing our policy, we have deliberately chosen to be close to the market and close to the customer. Our people know what is going on with the customer and approach projects integrally. Every client therefore sits around the table with the same team from the initial concept through to aftercare. We are an initiating, developing contractor and often step in early in the design and construction process. Based on our integral approach, initiating, developing, building and maintaining, we work on ground-level and stacked housing construction, utility construction and social real estate, but also, for example, in sustainable area development and we are involved in transformation and renovation. This means that you need a legal partner who understands the various disciplines in which you work. We have found that in Poelmann van den Broek: one party we can turn to with all our legal issues."