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I know times are hard. we are all feeling it.
I am a carpentry/drywall contractor. Last year I bid a job for a GC that I knew pretty well. He won the job, and made me take a haircut to do it, I agreed, reluctantly. After all, he won the job with my numbers. As the job progressed he 'took back ' certain things from my contract and had his own guys do it. Now the job is complete, and there were certain things I thought were being eliminated from the project, because they never proceeded on them. Now he is asking me for a credit on these things. No problem. However, I passed by the site, and noticed he had one of his guys doing the work. I broke even on this job. I did the hard part and just got by, and i feel like he's screwing me out of gravy stuff that was in my contract. worse yet, he's being greedy and increasing HIS profit. screw the subs. He admitted to me without realizing that he's 'making money on the job' so why screw the subs?
 

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. I broke even on this job. I did the hard part and just got by... he's screwing me out of gravy stuff that was in my contract... He admitted to me without realizing that he's 'making money on the job' so why screw the subs?
If it walks like a duck...

He used you to price out the gravy and took from you it and Your mistake was not charging him a cancellation fee for the cancelled items.

At least you broke even. Learn from the experience and move on. Next time you come across this fella you'll know what toexpect.
 

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me on the DYI Forum said:
Yes, I too think you are being taken. Whether ethics enter into it or not, (They don't for most people), contractors have to be thick skinned and professional enough to just suck it up and keep on going.
This was an easy reply. This is an excerpt from one of my recent posts on the DIY Forum. Different situation, but same thought.
 
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Yes, I too think you are being taken. Whether ethics enter into it or not, (They don't for most people), contractors have to be thick skinned and professional enough to just suck it up and keep on going.
This was an easy reply. This is an excerpt from one of my recent posts on the DIY Forum. Different situation, but same thought.
Pretty much.

I real man would take the hit, while weasel will rob you blind.
 

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Maker of Fine Sawdust
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If you had a contract with him to do the job he had no choice to have you do them. Charge him for the work listed in your contract. If he refuses to pay, claim breach of contract and lien the project.

You did have an iron clad contract, right?
 

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Never bid to break even on the hard stuff, and make up your profit on the gravy.
Bid to make money, period.
You can stay home, and break even.
 

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This is a basic GC 101 game and you fell for it probably because you didn't handle your paperwork right from the start. Believe me, being a GC for 16+ years I have learned every trick in the book from the best classes out there, the job site. The easiest prey for GCs are the subs who have their family members or a minimum wage person do their paperwork and billing.

A proper schedule of values in the beginning of the job helps solve these issues. When you create a schedule of values at the start, you need to make sure you put the gravy in a different line item like overhead, profit, fee etc. when he credits an item, you just give him back that line and nothing from the profit.

Lets say you are doing three things for the GC:

  • Drywall (1st layer)
  • Drywall (2nd layer)
  • Taping
  • Texture
And lets say your contract was $100,000. Your estimate was $80 to do the work and you added $20k for overhead and profit. Your first instint would be do to the schedule of values like this:


  • Drywall (1st layer) $20,000
  • Drywall (2nd layer) $20,000
  • Taping $20,000
  • Texture $20,000
  • OH&P $20,000
Looks fair right? No, it doesn't. Your OH&P may remain the same $20k if he decides to cancel one of these items out. Lets say GC asks you to take out Texture. Do you credit him $20,000 + 1/4 of the OH&P? So you give him a credit of $25k total? Wrong.

There are many different ways to protect you but here is one way that will help you in a situation like this. Set your schedule of values to something like this:


  • Drywall (1st layer) $15,000
  • Drywall (2nd layer) $15,000
  • Taping $15,000
  • Texture $15,000
  • Mobilization $10,000
  • Submittals $5,000
  • Punchlist $5,000
  • OH&P $20,000
Now when he asks you to give back texture, you give him $15,000 not $25,000. You also dont give back anything that is part of submittals, mobilization etc.

Its just a simple game of math. And the ones who are not good at it, always lose big although they may be the best carpenters and framers.

Good luck to you and pay more attention to your contract breakdown next time!
 

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... Charge him for the work listed in your contract. If he refuses to pay, claim breach of contract and lien the project.
....
That's not quite correct. A GC can always send you a stop notice and tell you not to perform certain part of your contract and ask for credit. And NO you cannot bill him for work you have not done and in most cases you have to give him back the credit and you will never win in any court trying to charge for work you have not done.

The protection comes in form of your schedule of values. It needs to be written with such precision that if any part of the contract is removed, you still keep your profit. In fact, the more the GC removes, the more beneficial it is because you keep all your contract, do less work, get out sooner and do more work elsewhere.

Another unethical trick to screw the GC is to still charge him for material, and obvsiouly over charge. Once we have to remove a sub from a site because he was not performing and he claimed he has already bought material and they are sitting in his vendors lot. Although he was not able to produce copies of checks he paid his vendor with, we had to keep him on board as he wanted 40% more on material and we would be losing if we had gone to someone else.
 

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Los Angeles Remodeler
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You're revealing some private info, your overhead and profit. Don't you run into problems with that?
Everyone is there to make a profit. Its not charity. By thy way, you don't show the real numbers. In the example above, the numbers below would be your actual costs (just an example):


  • Drywall (1st layer) $11,384
  • Drywall (2nd layer) $13,426
  • Taping $10,893
  • Texture $8,795
  • Mobilization $500
  • Vendor price increase. Ran out of material, need to get from another distributor at higher price: $5,000
  • Sick, left, didn't show up today: $3,000
  • Your forman made a mistake and needs rework: $4,000
  • Submittals $200
  • Punchlist $2,000
  • GC Backcharges for trash, damage etc. $5,000
  • OH&P $35,802

So your OH&P is really $35k but you show $20k
 

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That's not quite correct. A GC can always send you a stop notice and tell you not to perform certain part of your contract and ask for credit. And NO you cannot bill him for work you have not done and in most cases you have to give him back the credit and you will never win in any court trying to charge for work you have not done.>>>>>>>>>>>>>>>>>

Not quite correct. That depends on what the contract with the GC says.

If you want to pull this game, you had best have your ducks in a row with me, as I have learned from the best GC scammers in the business.
 

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Los Angeles Remodeler
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Brook, your technique makes sense but I think most of us would disagree on giving them such a detailed breakdown, even though the numbers you give them aren't real. There's been discussion on it here http://www.contractortalk.com/f16/customer-wants-breakdown-51847/
You are correct Kenn and dealing with small jobs (20k or less) and private homeowners you should never give a breakdown.

I guess I have done different types of work. The thread you noted above is mostly about doing work for home owners or smaller projects, I am referring to contracts for GC worth at least 100k and up. You will have to give the GC a breakdown. The owners will never let the GC sign a lumpsum contract. In fact, most owner contracts these days require the GC-Sub contracts to have no line item greater than $20k. In certain projects for the city, even the labor and material had to be broken down to the cent due to tax issues and non for profit status of our partner.
 

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Not too dissimilar to a simple "restocking fee" at the lumber yard. Which we all know is bogus... yet how do you dispute it?
 
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