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First Time With Sub Contractors

 
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Old 06-24-2015, 02:57 AM   #1
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First Time With Sub Contractors


Hey all, in the past I've normally done jobs on my own but I got a project which will require me to get subcontractors on board so I'm relatively new to dealing with them. I have a couple of questions, (1) is it normal to mark up on their billings even though I won't be involved hands-on with their work besides a supervisory role; (2) am I legally responsible if the subcontractor does a bad job?

Thanks for the help.
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Old 06-24-2015, 04:09 AM   #2
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Re: First Time With Sub Contractors


Short answer, yes and yes.
You should be compensated for making sure that the subs do their jobs in a timely manor as well as quality workmanship. If they do a poor job it not only reflects on you but you will be responsible for fixing it.

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Old 06-24-2015, 07:36 AM   #3
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Re: First Time With Sub Contractors


As Dave said<"Yes and Yes"

You need to be compensated for your time hiring and getting the quotes--
Supervising and covering anything that they do not do that is part of the work--
for example---protecting the area--patching wood and drywall disturbed when they do their job---paying them and waiting for the client to pay you--

On a big job 15 to 20% is common---an a little job where your expenses and profit would not be covered ,an hourly based fee might be the way to go.

Are these subs that you have hired and have complete control of or are they under contract to the client?

Be careful to cover your time---babysitting without pay will get a guy kind of grumpy--
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Old 06-24-2015, 05:11 PM   #4
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Re: First Time With Sub Contractors


Okay that makes sense as far as compensating myself for my time finding the subs and supervising them. I'm a bit nervous about the being responsible for other peoples work part because I've never actually worked with these guys before or seen their work. From conversation they seem to know what they're talking about their quote was good. Would it be smart to just have them contract with the client directly because the work is easily divisible. ("You do the cabinetry and I'll do the floor and paint"). But if I do that then i'll be missing out on the 15-20% their quote... hmm...
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Old 06-24-2015, 08:30 PM   #5
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Re: First Time With Sub Contractors


No you wouldn't---there is a type of contract called 'cost plus'--I use them when acting as a GC---

You bid your portion---whatever you and your crew do --
Then add the subs tickets, which the customer pays directly---and any materials--
To that total you will ask for a percentage on top. Your Contractor fee--

This is a very over simplified explanation---but a common practice.

The hard part about being a GC is tying together all the different trades and covering the stuff that does not fall into their contract---

Garbage disposal--porta-potties--site clean up---collateral damage(plumber rips open a ceiling--who fixes it? Electrician needs a trench-who digs it and who fills it and who fixes the landscape?)

Time spent getting permits--meeting with the inspectors---paying the fees for a second inspection-----all that needs to be considered and covered---

Your insurance needs to cover a GC---and the papers need to be filed--so that has to be covered---

Being a GC can have rewards,to be sure,----but can turn into a loosing money pit if you are unprepared--- Think this through carefully---ask questions--and cover your butt---
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Old 06-25-2015, 06:10 PM   #6
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Re: First Time With Sub Contractors


Thanks for the heads up! I've never heard of a "cost-plus" contract before. I guess I'll have to do a lot more research before getting into this. Any resource that you've found helpful to getting a solid grasp of cost-plus contracts, etc?
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Old 06-25-2015, 09:10 PM   #7
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Re: First Time With Sub Contractors


Quote:
Originally Posted by MSoro23 View Post
... I'm a bit nervous about the being responsible for other peoples work part because I've never actually worked with these guys before or seen their work. From conversation they seem to know what they're talking about their quote was good. Would it be smart to just have them contract with the client directly because the work is easily divisible. ("You do the cabinetry and I'll do the floor and paint"). But if I do that then i'll be missing out on the 15-20% their quote... hmm...
Is the sub actually a cabinetmaker? And you've picked them without seeing their work?

Edit: As a general, you are responsible for the subs' work, if you hired them, or if you found them and got the homeowner to hire them. If they mess up, the homeowner isn't going to say, "Yeah, they did crappy work, but we don't blame Mike, because he arranged the paperwork so that he wasn't paying them!"

Edit again: As a general, you want them to contract to you and be paid by you. That relationship gives you the authority you need to make sure the job gets done right.

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Last edited by CarpenterSFO; 06-25-2015 at 09:49 PM.
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