Contractor Talk - Professional Construction and Remodeling Forum banner

21 - 25 of 25 Posts

·
FairfaxGC
Joined
·
47 Posts
The owner of our company is good friends with a commercial GC. In good times they would collect bids from multiple subs plug in numbers for their own part of the job and add 5 - 20% depending on the level of competitors they were bidding against. After they were awarded the contract, they began the process of playing the subs one of another to lower construction costs. Over the last 2 years they have reduced their margin to 0 - 5% in an attempt to stay competative and litterally make their profit by working subs and suppliers.

Ethical or not, most corporations/ GCs etc are in business to make money for themselves and will do so by any means possible. The commercial GC we know typically will not lets his subs get hammered in job but will let them do the work for nothing and not think twice. The mentality being.... the sub should have been a better business man.

Bottom line, the only guy that is looking out for you is you. Be smarter than he is!

And finally, yes were are a residential GC and have asked our subs to take a "haircut" from time to time on jobs where we have reduced our price to bring in work; however, because we use the same subs over and over and because we want to know who we are sending into our clients house to work, we expect our subs to make a profit and thus still be in business the next time we need them.
 

·
Registered
Joined
·
55 Posts
And finally, yes were are a residential GC and have asked our subs to take a "haircut" from time to time on jobs where we have reduced our price to bring in work; however, because we use the same subs over and over and because we want to know who we are sending into our clients house to work, we expect our subs to make a profit and thus still be in business the next time we need them.
Well said, as a GC I can tell you that we get beat up just as much if not more than we beat up our subs just to get the job. Before I drop my pants to the client I will reach out to my subs and ask them if they still want the job if were to take a % off of their contract.

In the last 18 months or so, 9 times out of 10 the subs will agree to drop just to keep the guys busy thru these trying times and hope that things will get better soon. Nobody wants to do a job for payroll but if you can keep your key guys busy you will be that much ahead of the game when the market turns around.
 

·
Registered
Joined
·
377 Posts
Discussion Starter · #24 ·
i agree, however if the GC won the work with the starting numbers, or close to it, he's making the subs take a beating so he can maintain HIS margins.
 

·
Superior Firepower
Joined
·
5,089 Posts
i agree, however if the GC won the work with the starting numbers, or close to it, he's making the subs take a beating so he can maintain HIS margins.
Not always true.
Before I submit any numbers, I get minimum 3 bids for the phases requiring the most money, ie: demo, plumbing, electrical, foundation, framing, etc. then submit my total to the wallet using the highest numbers. This allows a cushion for non-performance. If the wallet does not like my bid, I might dig into the buffer zone but I never ask the sub to drop their price, that would only compromise the quality I've already promised.
 
21 - 25 of 25 Posts
Top