So you’ve gone and scored that first big project. Congratulations are in order … assuming you’ve done it right. What’s that? What do I mean by, “done it right?” Let me explain. If you are new to the large project community (isn’t everything today related as a ‘community’ of some type?) you might want to take a deep breath here, check your ego at the door and do some review.
First and foremost, how solid is your bid? Did you do a detailed material take off? Did you pore over every page of the plans looking for “gotcha” notes that don’t appear on the plumbing or HVAC plans? Did you get current pricing for material, including availability, any shipping charges and like items? Will your supplier honor that pricing over the course of the project? Did you make allowance for any special insurance and/or bonding requirements? How about on-site storage for drop shipped materials, and security fencing rental?
How accurate is your labor figure? Did you include all overhead expenses? Do you have the people with the skills to man the project and keep the construction schedule? What about sub-subcontract such as excavation, traffic plates, trench jacks, insulation, lifts, certified testing and such? If you didn’t answer “yes” to those questions, or had others of your own that can be answered in the affirmative, then you are taking a giant leap of faith in entering into a contract for a large project.
The reality is that when you enter into the realm of this type of work, the contract is king. You may have a great relationship with the general contractor. You may play golf with the superintendent or know the owner personally, but the bottom line is that everyone from the project owner on down is bound by the provisions of the contract.
What does that mean? Well in this country, as in most other industrialized countries, contract law is almost inviolate. Every aspect of the project is controlled, ultimately, by the contract provisions and disputes are always settled “per the contract documents.” When you enter into a contract for a project, you are agreeing to all the provisions contained in the contract documents. So you had better make sure that you read every single line of every document that you are agreeing to. It is your right to disagree with some of the contract verbiage and you can strike out those things with which you do not agree or which you have specifically excluded from your bid. If the general contractor is straightforward, he will expect this type of parsing and work with you in resolving any disagreements before affixing his signature to the documents. Even the so-called ‘boiler plate’ contract verbiage is fair game regardless of how much the general squawks.
Lawyers produce the boiler plate provisions to cover the general contractor’s butt, not yours. You are the one who is vulnerable if you do not insist upon a fair representation of actual job conditions and expectations. Do not be disrespectful, but do not capitulate to provisions with which you do not agree. This means walking away from the project if the particular verbiage could potentially be damaging enough that you’d lose not only your profit, but possibly your business if it were enforced.
Keep in mind that this all occurs before you set foot on the project. Never, under any circumstances, begin work on a project without having a fully executed contract. If you do, you are leaving yourself open to, at best, working for nothing, and at worse, being liable for anything that might occur on that project which can even remotely be blamed on you. Most importantly, make sure that you understand the pay schedule and that the owner, architect and general contractor understand that you expect them to adhere to that schedule.
If you think this column represents an overly paranoid approach to contracting, I can assure you that it does not. Every scenario expressed herein is one which, at one time or another, has caused a new, inexperienced or unsuspecting subcontractor to either lose their shirt, go out of business or worse. The contracting business is one that can be lucrative, but constant vigilance the price of success.
While it is true that friendships and relationships are an important and integral part of the construction contracting industry, it is equally true that strict adherence to the contracts, ruthlessness and outright dishonesty are just as much in play. They say some days you are the windshield and some days you are the bug. It is incumbent upon you, as a tradesman, craftsman and/or businessman to know as much about the industry, contracts and contract negotiations as possible so that you do not become the bug. Protect yourself at all times.
The Brooklyn, N.Y.-born author is a retired third generation master plumber. He founded Sunflower Plumbing & Heating in Shirley, N.Y., in 1975 and A Professional Commercial Plumbing Inc. in Phoenix in 1980. He holds residential, commercial, industrial and solar plumbing licenses and is certified in welding, clean rooms, polypropylene gas fusion and medical gas piping. He can be reached at[email protected].