Past Customer Now Using My Subs?!?! - General Discussion - Contractor Talk

Past Customer Now Using My Subs?!?!

 
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Old 02-25-2011, 11:43 AM   #1
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Past Customer Now Using My Subs?!?!


Found out from my low voltage sub that a past new construction customer of mine (where I build the house for him) is soliciting bids from the subs who built his house. I have had a great relationship with this customer over the last 2 years and in fact put together a rough estimate for finishing the basement about 16 months ago.

I did contact the customer about 4 weeks ago when my cabinet maker said he was looking for bids from him as well. My exact words to him were "It sounds like he [cabinet maker] has it handled, but if I can help out in any way, please let me know." His response was 'we are just looking at ideas'.

I'm not sure how I should react. Cabinet ideas are one thing, but looking at low voltage (plus who knows what other subs he has contacted) kinda points to my customer just outright bidding out the project and keeping me out of it. I doubt that me confronting him would help the situation.

Anyone out there encounter this before?
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Old 02-25-2011, 11:50 AM   #2
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Re: Past Customer Now Using My Subs?!?!


Sure, I've encountered it. The customer owes you nothing; he's free to contract with anyone he wants to, and you can't blame him for wanting to save the overhead of working through a GC.

But if you provide regular decent-paying work for your subs, they should be referring his inquiries to you.

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Old 02-25-2011, 12:02 PM   #3
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Re: Past Customer Now Using My Subs?!?!


Quote:
Originally Posted by JCarsten View Post
I doubt that me confronting him would help the situation. Anyone out there encounter this before?
I think that all of us has encountered this at least once or twice in our careers. And you can't let that bother you. The only thing that you can do is thank your subs for being forthright with you and encourage them to do well but not to cut the HO any slack.

But the last time a HO did that to me, I simply wished him well but I also told him (in a nice way) that he'll never get another thing from me. Because what eventually happens is that the HO will start holding you accountable for the actions of the sub. And that's when you have to dig in your heels and tell the HO that there isn't anything you can do being that the sub has no contractual obligation to you.. thus you will not be using your influence to summon him.

And I say this because the sub is eventually going to upset the HO.. they all do.. even if it isn't their fault or of their own doing.. and then the HO will want you to fix it.
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Old 02-25-2011, 12:02 PM   #4
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Re: Past Customer Now Using My Subs?!?!


If you were busy these days, you'd probably be glad not to have to mess with it. Try to keep things in perspective. Was your markup on those sub's work all that much anyway? Probably not.
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Old 02-25-2011, 01:31 PM   #5
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Re: Past Customer Now Using My Subs?!?!


These guys are independent contractors and are free to accept work from anyone. As Tin pointed out, if you take care of your subs, thye'll refer inquiries back to you.
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Old 02-25-2011, 01:39 PM   #6
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Re: Past Customer Now Using My Subs?!?!


Warning: Free Enterprise At Work!
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Old 02-25-2011, 01:48 PM   #7
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Re: Past Customer Now Using My Subs?!?!


I knew 480sparky would post on this one!
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Old 02-25-2011, 01:51 PM   #8
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Re: Past Customer Now Using My Subs?!?!


Quote:
Originally Posted by tedanderson View Post
the sub is eventually going to upset the HO.. they all do.. even if it isn't their fault or of their own doing.. and then the HO will want you to fix it.

That's been my experience exactly

A good GC insulates the owner from the many crappy things that happen, they never even know about most of it.
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Old 02-25-2011, 02:16 PM   #9
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Re: Past Customer Now Using My Subs?!?!


Quote:
Originally Posted by Tinstaafl View Post
Sure, I've encountered it. The customer owes you nothing; he's free to contract with anyone he wants to, and you can't blame him for wanting to save the overhead of working through a GC.

But if you provide regular decent-paying work for your subs, they should be referring his inquiries to you.
Thanks for the feedback.
I pay my subs what they bid. I would assume they would bid as "decent paying". I never go to them and tell them what they'll be paid for X job.
Two of the subs (so far) have asked me what markup should be on it for me- which is good...
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Old 02-25-2011, 02:52 PM   #10
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Re: Past Customer Now Using My Subs?!?!


Right on guys, good answers. This happens on almost every job. My painter is always being asked to do some touch ups throughout the rest of the house. And yes, I have been contacted twice about minor issues that I have nothing to do with. You really do have to put it into perspective. He is doing things that I don't really want to do. If he were an employee it would be different but he is a sub. I'm happy just to know that he is getting enough work to stay afloat, as he is one of my better subs.

If he were to get a $30,000 exterior siding replacement, it might be a little different. It's hard to put a $ value on putting somebody in front of the consumer. They are going into the bid with a leg up because they have already worked with the client.
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Old 02-25-2011, 03:05 PM   #11
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Re: Past Customer Now Using My Subs?!?!


I would just focus on the work you know you can get but still keep relationships healthy. Chasing work like this isn't always the best avenue. I can see where it would be a little upsetting emotionally but it's obvious he wants to skirt your services. Chase the ones that matter...not this guy.

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Old 02-25-2011, 04:20 PM   #12
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Re: Past Customer Now Using My Subs?!?!


I think this is an example of what happens when you make being a GC look easy. Let the homeowner do his thing, not much you can do anyway. He will soon learn why you get paid for what you do.
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Old 02-25-2011, 04:22 PM   #13
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Re: Past Customer Now Using My Subs?!?!


Quote:
Originally Posted by BamBamm5144 View Post
I knew 480sparky would post on this one!

I'd like to see the OPs receipt showing those subs are legally his to do with as he pleases. Or a title, or bill of sale, or deed, .... something that would stand up in court.
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Old 02-25-2011, 04:43 PM   #14
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Re: Past Customer Now Using My Subs?!?!


proper thing would be for the sub to throw you a bone. I have been in this situation plenty of times. I usually will offer the gc something, most often they never take it.
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Old 02-25-2011, 05:00 PM   #15
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Re: Past Customer Now Using My Subs?!?!


I have been contacted by clients outside of a G.C. I sub'd for. From the other side, it was awkward, but $16,000 of work over '09-'10 cured my ills quickly enough...



However I would NOT mutiny during a contract for any amount.
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Old 02-25-2011, 05:46 PM   #16
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Re: Past Customer Now Using My Subs?!?!


I did a fair amount of sub work last year for another roofing company. Well, about 15 roofs, so a little over a month worth of work.

Little did either of us know how quickly I would become one of their biggest competitors. While the guys were working on their jobs, I was out marketing and advertising for my own. Now, more often than not, we end up bidding on the same jobs. Ive also got a lot of those jobs since I have so much less overhead.

In your world, I would always work for them because I "belong" to them. I don't get that way of thinking especially when Subs have their own credentials and company name.
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Old 02-25-2011, 06:11 PM   #17
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Re: Past Customer Now Using My Subs?!?!


my subs would never do freelance work for a customer or a rogue sales person who use to work at our company. 2 reasons! 1) we have very good relationship. if they're asked about doing such and such work, they refer it back to us. 2) none compete agreement is signed every 1st quarter of the year.

they can work for competitors, just not homeowners/sales guys.
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Old 02-25-2011, 06:21 PM   #18
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Re: Past Customer Now Using My Subs?!?!


Quote:
Originally Posted by BamBamm5144 View Post
I did a fair amount of sub work last year for another roofing company. Well, about 15 roofs, so a little over a month worth of work.

Little did either of us know how quickly I would become one of their biggest competitors. While the guys were working on their jobs, I was out marketing and advertising for my own. Now, more often than not, we end up bidding on the same jobs. Ive also got a lot of those jobs since I have so much less overhead.

In your world, I would always work for them because I "belong" to them. I don't get that way of thinking especially when Subs have their own credentials and company name.
same thing happened to me. I worked about 8 months straight for one gc. He just kept feeding work. He died down and now we are head to head bidding. He will still call and pick my brain and ask for bids, but I think he is just trying to steal my secrets . No worries though, he cant do a built in to save his life

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Old 02-25-2011, 06:27 PM   #19
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Re: Past Customer Now Using My Subs?!?!


Quote:
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my subs would never do freelance work for a customer or a rogue sales person who use to work at our company. 2 reasons! 1) we have very good relationship. if they're asked about doing such and such work, they refer it back to us. 2) none compete agreement is signed every 1st quarter of the year.

they can work for competitors, just not homeowners/sales guys.
I'd be real curious how well that non-compete clause would stand up to a serious court challenge. I don't know about Illinois, but in a lot of states, CNC's are for employees/business partners/corporate officers. That might raise some real questions about whether you're using real subcontractors or the famous "sub-contractor" dodge.
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Old 02-25-2011, 06:30 PM   #20
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Re: Past Customer Now Using My Subs?!?!


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I'd be real curious how well that non-compete clause would stand up to a serious court challenge. I don't know about Illinois, but in a lot of states, CNC's are for employees/business partners/corporate officers. That might raise some real questions about whether you're using real subcontractors or the famous "sub-contractor" dodge.
im not an attorney or the irs. but it works and it has been working. we dont pay hourly nor do we tell them what time to get off work. subs are subs, simple as that. the clause strictly states no soliciting within x amount of miles and for an x amount of dollars. if its a few hundred here and there, fine not a big deal.

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