You’ve worked hard, become skilled at making things, developed relationships with architects, gotten specified on a commercial project, bid to all of the generals involved and been told the winning bidder is going to go with you. Now what?
If you’re new to the world of working with general contractors, you may be in for a very rude awakening. Odds are you’ve just become a small fish in a big pond. Here are some steps to take to ensure that things proceed more smoothly so you get paid.
It starts with your proposal.
Define what you’re bidding on in as much detail as possible. List the drawing number, revision number and date you received the drawings on your bid. This would typically be written as follows:
Concrete Surfaces Company proposes to furnish (286) vanities with integral sinks in accordance with drawings and specification received on 10/25/2019 dated 8/6/2018 for the Marriott by the Sea project. The pages detailing the vanities are A1 – latest revision 8/8/2018, A7 – latest revision 8/4/2019 etc.
List all of the pages showing your part of the project. Also, list any references to the vanities in the project specification booklet, as well as intended finishes.
Include a realistic project schedule in your proposal:
Concrete Surfaces Company will require 2 weeks from awarding of the subcontract to produce a mockup for the architects’ inspection. Concrete Surfaces Company will require 2 weeks after approval of the mockup to start fabrication of the vanities at a rate of 40 per week etc. until the complete schedule (including install) is listed.
This will show the generals you have put the time and thought into how you are going to complete the project.
Read the contract. Most larger general contractors will require you to sign their subcontract rather than signing yours. Read and understand the contract before signing, and get an attorney if you need one. You can ask for contract modification or for your simple contract to be added to their contract to clarify things. You may be able to get by with a purchase order to keep things simple.
Create a paper trail. It’s OK to talk to someone on the phone about a project — just make sure anything important is followed up in writing. Start an email folder for the project, both a physical (print and save the emails just in case) and a virtual one. Architects and general contractors do this and expect you to as well. Any time you talk with a general contractor, follow it up with an email:
Following up on our phone conversation today; Concrete Surfaces Company tentative schedule for install is 10/26/2019. Concrete Surfaces Company will require 4 weeks from the date of sample approval prior to starting installation of the vanities. Concrete Surfaces Company sample will be ready for submittal 2 weeks after the award of the subcontract to CreteWorks.
Track and bill extras. An extra is anything not listed in the drawings and specifications that causes you to perform extra work. Extras could be more, or they could be a different finish, a fast-track schedule, or even errors or omissions from the architect (imagine that). You may have to argue for some extras, especially if the general contractor cannot pass the added expense onto the owner (who may have to collect from the architect).
Extras are typically negotiated. General contractors are used to seeing cost plus 20 percent: 10 percent overhead plus 10 percent profit. Negotiate from there.
Understand your general contractor’s billing cycle. Everyone involved with a project, from the owner on down, tries to get everyone else to finance it. Unfortunately you’re going to be the last one in line.
Some larger companies may not be responsive to invoices or inquiries. A submitted invoice may appear to enter a black hole with no discernible exit process.
So, try to figure out the procedures ahead of time and get them in writing. Once you submit an invoice, follow it through the process to ensure prompt payment. A courteous phone call inquiring about the status of an overdue invoice goes a lot farther than, “Where’s my money?” You can also lean on the project manager for help once you develop a rapport with them.
Try to get a deposit. You will probably hear, “We never do that” when you ask for one, but if you need it to complete the project, tell the general and see what they can do.
Get your financing in order. Odds are good that you will need working capital to complete larger projects. Break your estimate down to weekly expenses and secure the capital ahead of time, or you risk running out of money before you get paid. You may be able to negotiate a favorable payment plan, including progress payment with the general contractor.
Be honest about your financial situation with the general. They may be flexible, especially if the architect and owner trust you.
Know when to walk away. Walk away if you can’t complete the project to everyone’s satisfaction, get paid in a timely fashion and make a profit. With proper planning and execution, larger projects can be a win-win. But when something goes wrong, you could lose your company before it really starts. Larger companies face these facts daily. It can be a little daunting when you first start out. If you can’t see a very clear path to success on a project, your best bet is to walk away and live to fight another day.
Thanks to advances in admixtures and sealing systems, we’re seeing more of our customers make the leap to larger interior commercial concrete surfaces. Concrete is ready to make the leap — but fabricators will need to become competent project managers to take advantage of future growth.
Mark Celebuski is a partner in manufacturer Trinic LLC. Reach him at email@example.com.