Taking a Beating

[gadfly56]

i dont see the problem , AHJ or Plan Check always redline plans, That is what they do. The plans are either re-submitted or stamped Accepted with redline changes from the plan checker. If the engineer has a problem then he can address the Plan check. in either case the OP obviously bid on a non stamped approoved plan. I can only fathom that the OP either took the job as given or forfieted his position.

What I hate is the Standard AIA contracts have the arbitrary and capricious clauses. I have seen plans that say the EC will provide a complete code compliant system as per structure as built. So in other words if the foot print increases I stil need to add electrical as per my original bid. I realize how this language came to be. The builder wants to reel in the costs. He does not want to see all the extras. Maybe he is a fraud or honest. Who knows. The problem is Architects, engineers and designers do not take responsibility for the problems or changes they create. Owners try to avoid signing for necessary agreed to changes. Subcontractors continue the work so as not to be in default. The subcontractor is always the one to bear the cost changes. Untill the law takes care of this and protects the subcontractor.
I had a GC do this to me many years ago. I told the GC that I would proceed on all work except for the changes until the changes are signed. And if the delay causes other issues or costs so be it it will be his problem. The next thing that happend in the GC came to me , got right in my face trying to intimidate me and threaten me. I had to call the police the entire crew whitnessed it. The GC wound up paying me some money to go away. He really got screwed in the end. Later I heard he lost all his property , it took a while but karma got to him.

Good luck.

Well, I guess they do it different in your neck of the woods. Around here, the plans have to be signed and sealed before they hit the building department. If you're lucky, you got to bid on the submittal set. Since we do a lot of our own design work, we make it clear that any changes required by the building department will mean a change order.

Again, if the plan examiner marks up my drawing, and hits it with the "Approved" stamp, he's breaking the law in New Jersey. Period. If he caused the sort of situation the OP finds himself in - say for example he crossed out "EMT" everywhere and wrote in "RMC" - it could also be construed as tortious interference with a contract. Or a court might find that the owner was the recipient of "unjust enrichment".

 

[Sierrasparky]

Well, I guess they do it different in your neck of the woods. Around here, the plans have to be signed and sealed before they hit the building department. If you're lucky, you got to bid on the submittal set. Since we do a lot of our own design work, we make it clear that any changes required by the building department will mean a change order.

Again, if the plan examiner marks up my drawing, and hits it with the "Approved" stamp, he's breaking the law in New Jersey. Period. If he caused the sort of situation the OP finds himself in - say for example he crossed out "EMT" everywhere and wrote in "RMC" - it could also be construed as tortious interference with a contract. Or a court might find that the owner was the recipient of "unjust enrichment".

The owner or GC can re-submit the plans with the changes.
Object to the redlines
Accept and allow them to be stamped with the aprooved changes.

If the Local AHJ has proper policy or ordinances they can and will stamp certian compliancy items on the plans.

For example for many years after the Northridge Earthquake plans with structural sheer wall material were still comming forward with 3/8 plywood. The LA building and safety made it clear that they would not approve plans with less than 1/2 and certain number of ply's. You either accepted the redline or did not get a stamp. You could pay the engineer to redraw the plans and resubmit. It was far cheaper to accept the latter.

 

[Strathead]

The first thing I would tell you to do is Google "Spearing Doctrine" or "Spearing Ruling Construction" Read this in full. There is a very defined legal line that supersedes all of those "catch-all" phrases that Architects try to put in drawings. That said, the contract rules. If it says, you must submit change requests within 5 working days then you must. If you did it 10 working days later than you were aware and they can prove it, then it is your problem. I am with some of the others here, that I sympathize with you, but we read and sign several Contracts every year. Generally, they are based on a standard AIA document which tends to be fair, as long as you maintain proper record keeping throughout the project. We generally go for years without someone legally challenging, but then bam! I work for a small (50 man) Contractor. ON the jobs I PM, I insist on daily logs, weekly look aheads, weekly safety meetings, timely changes, acknowledgment to my emails, etc. My boss and I have had the discussion more than once, that he doesn't always keep up real well with this, and sometimes smaller GC's look askance at me. I am sorry I didn't work for you on this project, but hopefully there are others reading this who will think twice about working on a hand shake in this day and age. I really hope this works out for you, but as others said. Get representation sooner than later. But also read the Spearing ruling above and read your contract. You may also have a "required arbitration" clause in your contract. Often, if you did everything right and above board, this can be more beneficial than the letter of the law. Let us know how it turns out.

 

[Fulthrotl]

Generally, they are based on a standard AIA document which tends to be fair,
as long as you maintain proper record keeping throughout the project.

and that sums it up in a nutshell.

the short version is, if you don't have a *signed* change order,
then you have NO mechanism for getting paid, as you DO NOT
have a contract for the work you did. and in calif., if you haven't
filed a preliminary notice, you don't have any lein rights, either.

so without a preliminary notice, you don't have an enforcable
contract, either. at least in this state.

EVERY contract i've ever seen stipulates that work done BEFORE
a SIGNED contract or change order is issued, isn't billable.

when i first read this, i dropped the OP a private message, with
my contact information, and offered to chat, on the theory that
two people might be able to brainstorm some way out of his
dilemma.

he subsequently has posted here, so i know he's been on the forum,
but i received neither an acknowledgement, nor a phone call,
so i'm seeing a pattern emerging regarding lack of communications
regarding financial matters.

remembering the line from cool hand luke......

"what we have here, is a failure to communicate."

and many of us remember what happens after that line, and i suspect
something similar may await the OP, at least financially.

 

[Strathead]

the short version is, if you don't have a *signed* change order,
then you have NO mechanism for getting paid, as you DO NOT
have a contract for the work you did. and in calif., if you haven't
filed a preliminary notice, you don't have any lein rights, either.

There really is a lot more wiggle room on this than one might think though. The law does recognize "coercion", so if the change is a design flaw that failure to complete will delay the project as opposed to an actual change in the original design intent, then you still may have an argument. Again though, documentation. I say this because you have to also be careful not to refuse to do work that will delay the project. Obviously for continued relations with your GC, but also for legal reasons. Another this, if you can "prove" that the GC has expected work be done, by you or other subcontractors prior to signing a change, you have an out too. I agree with you about having him call if he is serious. There is WAAAAAAAAAAAAAAAAAAAY more involved especially at 150K plus than we could possibly type in this forum!

I responded, because I hope that some of the more trusting and less legally minded posters here (who are similar to my boss) see this and think about enforcing a strong paper trail!

 

[growler]

about 90% complete with the installation-- need about $150,000.00 to complete, money that I do not have.

Any attorney that you contact should be well versed in construction, not just any shlock.

If the job is 90% complete and 150K is needed for the final 10% then I'm assumming that the original contract was for well over a million bucks.


My question would be....why would anyone get involved with a job of this size and not already have an attorney to go over the contract before signing and to provide legal advice?

My brothers did something similar to this years ago. They waited until they were tapped out and selling equipment before consulting an attorney. They hired a good one but not good enough to stand up to the "legal team" of the GC.

The problem is that when you are tapped out it's hard to fight someone (in court) that still has about a 1/2 million of your money to fight you with. They learned a very hard lesson and I hope the Admiral is more fortunate but the law tends to favor those with more money to spend.

 

[cdslotz]

My question would be....why would anyone get involved with a job of this size and not already have an attorney to go over the contract before signing and to provide legal advice?

Yes, plus why would you do a job that size and try to manage it from a ladder?
From the sound of the inefficiency of the GC, behind schedule, stacking trades, adding scope, all adds up to an impact on your base bid scope and the changed scope. A PM could immediately price a change, adding any impact to the electrical schedule, and add charges for the estimate. They may well reject it on a price basis, and may well still order you to do the work, and negotiate later(which is not unusual). But your contractual rights are maintained to collect something.
Timing is everything. And that goes for the GC also and not let unapproved changes pile up.
In your case, sounds like everything was a hand shake. That GC won't even remember half of the changes he told you to do.
Good luck...

 

[dduffee260]

I also would like to hear how much higher the other bids were. Did the GC take out retainage? Usually on a project of this size there will be 5% retainage. That would be around $50,000 from what information I have read on here.

I am still a little confused here on how you are 90% complete yet you still need $150,000 to finish. When we are 90% we are basically down to installing some lights and devices. By this percentage of completion the feeders should be complete. All undergrounds should be in place. Most of the materials should have been bought. I would think that at 90% you have mostly labor and about 15% of that 150K would be miscellaneous materials. This would be $22,500 so the rest of the $122,500 should be labor. I don't know how many employees you have on site but let's just say they come up to $1,500 a week per person on average. if you had 10 employees that would be $15,000 a week. This give you 2 months of labor. Is that about how much time is left on the project?

I understand where you are at. Although we have never been that much in the hole we have before had to waste large amounts of O/T to pull a project from behind. It is not fun and time is your best teacher on these things. Let us know how things are going. Also have you ever thought of seeking a bank loan long term to work through this? Maybe even seeing if some of the key employees would work out some time for a part of the business here.

Take care and good luck with you coming time.

 

[admiralporklung]

UPDATE

UPDATE

Thank you for all the comments here. I really appreciate it.

To summarize my dilemma: I am upside down. I owe more to vendors than I have left on the contract, including retainage. I am virtually out of operating capital, I am tapped into my line of credit for the operating capital I do have. The surety has been called in brokered a meeting between the gc and me. I offered to finish the job if they pay my time and satisfy my vendors. I have the job at a standstill, it is time to open, and I will not issue inspections. This was the advice of my lawyer and of the surety rep.

Now a question: billing for delays and claims is not something I can do well. The roof was behind schedule three months and the finish date was not pushed back at all. Please give me some advice on how to bill for these delays.

I have managed to take a growing, busy EC business and get it in all of this mess. Very disappointing.

 

[satcom]

Thank you for all the comments here. I really appreciate it.

To summarize my dilemma: I am upside down. I owe more to vendors than I have left on the contract, including retainage. I am virtually out of operating capital, I am tapped into my line of credit for the operating capital I do have. The surety has been called in brokered a meeting between the gc and me. I offered to finish the job if they pay my time and satisfy my vendors. I have the job at a standstill, it is time to open, and I will not issue inspections. This was the advice of my lawyer and of the surety rep.

Now a question: billing for delays and claims is not something I can do well. The roof was behind schedule three months and the finish date was not pushed back at all. Please give me some advice on how to bill for these delays.

I have managed to take a growing, busy EC business and get it in all of this mess. Very disappointing.

Question?
With contracts over 10k do you have an attorney review and advise or do you just wing it

 

[admiralporklung]

Question?
With contracts over 10k do you have an attorney review and advise or do you just wing it

I just wing it.

 

[cdslotz]

Now a question: billing for delays and claims is not something I can do well. The roof was behind schedule three months and the finish date was not pushed back at all. Please give me some advice on how to bill for these delays.

Unfortunately, it is all part of electrical contracting 101 starting with having an attorney mark up an unfavorably worded contract to protect you from such situations.
An experienced PM knows the effects of other trades on the schedule and can react with the proper actions.
In your case, when it became apparent the roofer delayed the entire project 3 months, the owner has to either 1) extend the schedule, to which you, and all other trades are due funds to cover extended storage, rentals, electricity bills on trailers, etc, or 2) hold to the schedule and pay you, and all other trades the necessary funds for overtime, inefficiency of trade stacking, etc. It's one or the other. Period.
It is incumbent of you, and all other trades to price and submit these changes in a timely manner. If they force you to proceed without addressing these claims, you proceed but not without your attorney keeping his foot on the owner/GC's throats.

 

[Strathead]

Question?
With contracts over 10k do you have an attorney review and advise or do you just wing it

I have seen a few comments touching the edges of this question. I have worked for 5 electrical contractors one both coasts. We have done jobs ranging from installing an outlet to about 3.5 million. I have not seen anyone have an attorney review the contract. I am pretty good at reviewing them myself and had several GC's accuse me of asking questions no one seems to bother with. We have had legal service on retainer, and I have know of informal discussions with lawyers mostly with comments about how no one should ever sign a subcontract agreement, because they are terrible for the subs. I agree, having read many, I have major problems with just about any that contain legal language. That said, Lawyers have also agreed that, if you want to do business in construction you have no choice. So all that said, are you telling me that you spend upwards of $1000 or more to have a lawyer review a $10,000 contract? That is more than I build in to a job nowadays!

 

[cdslotz]

I have seen a few comments touching the edges of this question. I have worked for 5 electrical contractors one both coasts. We have done jobs ranging from installing an outlet to about 3.5 million. I have not seen anyone have an attorney review the contract. I am pretty good at reviewing them myself and had several GC's accuse me of asking questions no one seems to bother with. We have had legal service on retainer, and I have know of informal discussions with lawyers mostly with comments about how no one should ever sign a subcontract agreement, because they are terrible for the subs. I agree, having read many, I have major problems with just about any that contain legal language. That said, Lawyers have also agreed that, if you want to do business in construction you have no choice. So all that said, are you telling me that you spend upwards of $1000 or more to have a lawyer review a $10,000 contract? That is more than I build in to a job nowadays!

Not on a $10K contract. Those jobs are over in a week or month at most. In this case, the OP's job was a million dollar job, which can last over a year.
Most of the big GC's around here have us sign annual contracts which we review and mark up. Then any job small or large are under the same contract language

 

[Strathead]

Not on a $10K contract. Those jobs are over in a week or month at most. In this case, the OP's job was a million dollar job, which can last over a year.
Most of the big GC's around here have us sign annual contracts which we review and mark up. Then any job small or large are under the same contract language

I just wondered how many of the electrical contractors who do normal every day commercial industrial work actually hire a lawyer to review contracts. It is sensible to me that if you are entering in to a multi million dollar contract with a GC or CM that you either have no experience with, has a reputation for being sticklers, or the customer is a public agency, then a lawyer is a wise decision, but for example I do a lot of work on a University Campus for 4 or five local Construction Managers. I read the contracts and make absolutely sure I am comfortable with the scope and wording about liquidated damages, change orders etc. but that is it. With apologies if I sound judgmental, but the problems that the OP has seem on the surface to be running a loose ship during construction. The decision to have a lawyer review the contract would be more of an indication that the Sub was astute and likely to follow "smart" paperwork practices than an actual preventative measure in the case from what I have read. My hear really goes out to the OP but, I think the best that can be hoped is somebody else reading this decides to start developing good paperwork skills like accurate daily logs, weekly look ahead's, well worded emails to the GC when concerns arise etc. That is what a Construction lawyer would be better to invest in. I have worked for a couple of smaller companies that did work from "the back of a napkin". I helped to develop the above skills even on small, $30,000 or so projects. That way, when you get a million dollar one it is one less worry.

P.S. My prayers go out to the OP that he finds a way to recover some, or all of what he is looking for. If I remember correctly someone even said the messaged him to contact directly. There is likely ways to mitigate the damage, but every day that he doesn't do something is a day that he flushes more down the toilet. so, OP, contact that guy, or call your local contractor's association or a construction lawyer today!

 

[lakeview100]

Finishing the Job

Finishing the Job

Will you be able to finish this job?

Did you get your Change Orders approved?

 

[jmellc]

I saw a former boss get burned after a job ran more than expected. He had not done a good job of recording all change orders and add ons.

If you have not done so already, please sit down and reconstruct all you can recall. You seem to have a few of them already on record but list everything you can remember. Get any lead men you have to do the same. Did they get approached for any changes that did not go through you? GC may have approached them with "your boss told me to see you about doing this or that". That is a famous trick some GC's use. Have each lead man list all he can recall. Take all this to your attorney. Maybe he can do something with it.

I have not had a large enough job to deal with these issues. If I get such a job, I will keep change order forms handy and get a signature before any work is done. I will check to see if GC's boss requires purchase order #'s also. That is another trick often used to stiff contractors. They rq the work and will "issue the PO later when I get to my desk". Later on, he has a memory lapse, though he got the work done. If a PO is involved, get it before the first screw is turned.

 

[cdslotz]

Change orders are not executed with a PO

 

[jmellc]

Change orders are not executed with a PO

Maybe I should have said "add ons" or "new jobs". We were doing a job at customer's premises. One of their managers would come over and want this or that done "right away" We would do it and bill for it later, with our regular billings. Same guy or a different one would ask, what PO it was under? He would then drag out issuing a PO for it. Anytime I went there afterward, I asked for a PO as soon as I got out of the truck. If he said "later", I said "I'll wait here". He would get the PO issued quickly then, knowing the work was being held up.

 

[dduffee260]

If you have the job at a standstill then you could be liable for liquidated damages. Also how much higher were the other contractors? I sounds to me like you may have taken the project a little low and now it is catching up.

More times than once have I watched a new EC go out into the world of contracting. Then take a job anywhere from 25% to 60% lower than the next EC or ECs. Let's say for fun sakes that it was a $100,000 contract. They would then frontload the project with a draw of say 35% an get a check for about $33,000. Some feel as it they are going to make this easily and spend it one needs, equipment, toys, trips and the such. Then delays hit, labor is more expensive than they thought, the project takes more material than they had planned and the project makes less profit than anticipated. They usually do not realize they are out of money until the end of the project when they run out. I have been there and got the t-shirt myself.

The fact is that it takes X amount of labor and materials to finish a project. Now I am not saying that all project make the same exact profit, they O/H varies immensely from EC to EC. My thoughts are every project we run has to be managed like there is X amount of profit in it and not a penny more. Most of the time because of proper management we tend to make our bid profit amount and sometimes a little more. Hardly ever do we make a " ton of money " on any project. The competition is just too tight right now.

You may have to make payment arrangements with your supply house and see if there is any type of collateral you can put up for credit. If you are successful and do manage to acquire funding to finish then congrats. Keep in mind the money you will have to pay back is a lot tougher to make than not being in the hole. Good luck and keep us posted.