I don't work with GCs often please explain...

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KVA

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Am I wrong that when you work with a GC you treat them just like any other customer like dealing direct with a homeowner.

You have them sign a contract just like everyone else right?

I am new to business and never really worked with a GC on a big project just want to learn how things go.

Scope of work, payment schedule, materials, warranty, terms etc.. the same as dealing with a homeowner?

Even though I am a "subcontractor" to them I am still a business and treat them same correct?

Sorry if this sounds stupid but I rather deal direct with the homeowners but now toying with the idea of working with GCs. I cant work with them if I don't know how the process works:thumbsup:

thanks
 
yes and get everything (EVERYTHING) in writing. And attempt to develop a good relationship with them. I had one GC I sub for, no payment contracts, but deposits for materials and payments every 30 days for all work. I started that when young and would never do that now. Plus I know this guy's wife, if he doesn't pay me, he'll pay dearly when he gets home :) Im sure there are a lot of GC horror stories everyone can share here. A close and friendly GC is best.
 
Don't be surprised when the GC wants you to sign his contract instead.

Whenever I hire a sub, I have them sign my contract.
 
KVA said:
Am I wrong that when you work with a GC you treat them just like any other customer like dealing direct with a homeowner.

You have them sign a contract just like everyone else right?

I am new to business and never really worked with a GC on a big project just want to learn how things go.

Scope of work, payment schedule, materials, warranty, terms etc.. the same as dealing with a homeowner?

Even though I am a "subcontractor" to them I am still a business and treat them same correct?

Sorry if this sounds stupid but I rather deal direct with the homeowners but now toying with the idea of working with GCs. I cant work with them if I don't know how the process works:thumbsup:

thanks
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I don't care if it is Johnny homeowner or Joe general contractor, If you don't know or trust them, you need a contract that spells out what you are to do and how you are to be paid. I have a couple of GC's I do work for without a contract, but that is only after knowing and working with them for the last 10 years.
 
Ok thanks

So how about payment? I hear a lot of "subs" don't get paid until the GC gets paid. Do I have to go with that bs or can i set my payment terms?
 
Depends on what they want and what you'll tolerate. I don't care if the GC is going to go bankrupt, I will still expect, demand, litigate, lien, use a debt collector and pursue payment when dealing with another corporation if I think I will get paid.
 
I am newer in business as well. I only work with a few GC because they are the only ones that will accept my terms. I treat them just as if they were a homeowner. I get a signed contract complete with scope of work and a payment schedule, and always a deposit.

If you can't afford to pay me a deposit, you probably can't afford to do the work, and I want nothing to do with you. The only reason things are done that way is because we let them happen. I pay for my materials when I get them, I pay for my gas when I get it, I pay my Insurance up to a year in advance....They can pay a deposit.
 
The first question you need to ask a GC is what happened to the electrician he usually hires? Whatever story he tells you, will still give you some indication of who you are dealing with.

GCs make money by winning bids. Once they win a bid, they will shop around and attempt to get subs at a lower price then the original one, because that means even more $$ for them. They will also beat you down on price, then make you wait for the money.

The biggest problem by far is GETTING PAID! They will certainly make their money problems your money problem. They can stiff you and then just get a different sucker for the next job, on and on. You need to be resolute about using your lien rights, and not allowing them to let a bill drag on until you have no recourse to get paid. If they miss one payment date, stop work! I was told once by a banker that it's very common for a GC to pay a sub all but about $3k, because it will cost that much to sue him.

I have a couple of good GCs I've worked with for years now. Yet recently I have noticed that payment isn't as quick as before, sometimes I have to make a phone call, that I never used to have to do.

Don't make the mistake of low balling in order to "get your foot in the door". As soon as you start pricing for profit he will be searching for the next sucker. Remember, he hired you because of price, and was not loyal to the last guy!
 
A few tips:

1. Write clear and explicit proposals. If something is confusing and not clearly spelled out on a plan, mention it in your proposal. For instance, if specs on a house don't mention who will be supplying light fixtures, explicitly include a clause stating that they'll be supplied by others.

2. Understand that you may have to deal with both the GC and the owner of the property. If the owner makes changes to the original plan, make sure you have a change order in place with the GC stating that you'll be paid for the work if there are additional costs. Since you're going to be getting paid by the GC, give him the opportunity to have a change order in place with the owner. If the GC isn't getting paid for your completion of the change, he's not going to pay you.

3. NEVER go around the GC and deal with the customer directly without first speaking to the GC about it. I've had several home owners try to get additional work done near the end of the job and try to cut out the GC. If you're ever asked to do this, pick up the phone and let the GC know about the request. He may not have a problem with you working for the customer directly, but he will definitely appreciate the fact that you kept him in the loop and he'll be more willing to trust you in the future.

4. Remember that the way you do your work reflects on the GC. If a subcontractor does a poor job and causes issues on a project, it makes the GC look bad. Conversely, quality work by subcontractors makes the GC look good and makes the owner more likely to recommend the GC to others. Which brings me to:

5. A good working relationship with a busy GC (or 2 or 3) can cut down on the stress that you have of finding projects. A GC that knows that you're a reliable subcontractor who can be counted on to do quality work and save him some stress will call you with job leads. We work with one particular GC that bids out every aspect of his projects except one. Now that I've built a relationship with him and he knows he can rely on me, he basically just hands me plans and says, "tell me how much."
 
Thanks for all the excellent info guys:thumbsup:

Another user brought up another subject subbing for Electrical contractors does this apply to them also?
 
KVA said:
Ok thanks

So how about payment? I hear a lot of "subs" don't get paid until the GC gets paid. Do I have to go with that bs or can i set my payment terms?
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a lot of subs don't even get paid after the GC gets paid.

you don't have to do anything you don't want to do.
however, you may not be able to do biz with some folks.

my experience has been that when you get the "you get
paid when we get paid", it's gonna be a slow pay.

get preliminary notices file on the job immediately after
signing a contract.

usually they will want you to sign their contract, not the other
way around. there is a reason. read their contract and you
will find out what it is.

if you get the "we've got lots of work" carrot, just know you
are getting played.

"we're doing 33 million a year...." fine. all i care about is the
$30,000 on the table between us, when i'm gonna get paid,
and what do the rest of your subs say about you?

be sure to google and do some net searches on the firm
you are contemplating doing business with.

i'll not post it here, but if you want to see what an ugly thing
can be discovered on a simple net search, send me a private
message.
 
There is little difference between dealing with a HO and a GC, IMO.

Make sure both sides have a clear understanding of what work is included in the price.

Make sure both sides have a clear understanding of when payment is due.

Everything in writing.

Do some kind of credit checking to make sure the guy who is supposed to be paying you is able to do so, and has a history of doing so.

As another poster mentioned, it is usually not hard to figure out what contractors are scam artists. They cheat their customers too. And the customers often write about it on the Internet. Often in great detail. You can learn a lot about a contractor by checking with the licensing bureaus as well. The BBB is one of the worst places to check IMO. The bad contractors all proudly advertise their BBB rating for a reason. If they have a bad BBB rating, it is often because they are uninterested in taking the steps to fix it, and probably does not mean much in itself.
 
KVA said:
Ok thanks

So how about payment? I hear a lot of "subs" don't get paid until the GC gets paid. Do I have to go with that bs or can i set my payment terms?
Click to expand...

The subs not getting paid until the GC gets paid is somewhat understandable. If you have a contract and want to draw a payment the contract should spell out how payment process works. If so and you signed the contract - don't expect anything that was not written in the contract. If no payment information is in contract then there is not any obligation to make any particular payment at any particular time. If you were to get payment requests submitted by a certain day of week or month get them done on time or you will have to wait until next pay cycle. GC may have similar timelines to fulfill with owner so he can get paid at a predetermined time.
 
GCs are usually much more demanding than homeowners. I would consider it normal to get a 7am call from a GC asking if I will be there today after waiting weeks for the call. If I do show up today, the job won't be ready for me, or everyone is there tripping over each other.

GCs are also much slower to pay. A homeowner will agree to an advance, mid payment and final. A GC will take so long to pay that you will wonder where the funds are to pay your material supplier. A mix of GC and homeowner work can improve the cash flow over all GC work. As mentioned by others GC residential and light commercial is usually non-profit. As soon as you add the profit they find a cheaper contractor.
 
KVA, I just picked up this thread. There is some good advice from others here, but I would like to summarize. First, it seems youa re referring to residential work here, or at least predominately. There is so much difference between residential, light commercial, heavy commercial, industrial, institutional, industrial and government type work that it would take a book. Then you throw in the proliferation in recent years of Construction Managers in lieu of General Contractors and the whole game changes. The greater the risk, the greater should be the rewards. A typical residential agreement, that I am familiar with (I deal more with $100,000 to millions) may be pay weekly, or pay at rough, and trim with a hold out (retainage) for final inspection. Not a lot of risk, not a lot of profit. Most of the resi guys nowadays seem to "work for wages" with the housing like it is. Light commercial seems to have a crossover. You can find GC's that will deal like residential, or you can end up in a full schedule of values contract. On larger jobs, the GC may be required to be bonded. If so, check with the bonding company and make sure that the bond covers your payment. That way, even if it takes a year, you will get paid.

Work schools in Ca for example and expect 90 days between receiving material and getting paid for it! Federal Govt. work is similar. You want the work, you figure out how much money you can have tied up, and how much you are willing to take for it. One good example I can think of is this:

Most projects require monthly billing. The contract calls for 10% to be held back as "retainage" Often it is stated, this is held until the certificate of occupancy is issued. As Electricians this can be less of a deal, but think if you are the underground utilities contractor. It could be a year. So they can request a change in the contract wording for earlier payment. This can be a burden for the Electrian too, on a long project. It doesn't hurt to ask for partial retainage at a certain point. For example, after 50% of the work is complete, retainage will be reduced to 5% of the total billed. Beleive me GC's often have this in their contract and are able to hold your money because you didn't ask.
 
KVA said:
I am new to business and never really worked with a GC on a big project just want to learn how things go.
Click to expand...

I would try to find out what happened to his other contractor.

It's alittle different working for a GC than a builder (yet the same).

Watch yourself and do not overextend yourself.

good luck
 
KVA said:
Ok thanks

So how about payment? I hear a lot of "subs" don't get paid until the GC gets paid. Do I have to go with that bs or can i set my payment terms?
Click to expand...

The contractor that tells you I can't pay you until I get paid, is usually working on a shoe string budget, and in most cases, can not pay his own bills, set your terms in the contract, and demand payment as stated in the agreed terms.

Today it is common for a vendor or sub, to send the contract to collection, on the day of the missed payment.

Since things went down hill, and more GC's are dead beats, we have them sign a day rate contract, we provide the day labor, and they need to pay in cash at the end of each day, we learned this method, from all the other subs, most of them have been burned many times, and even some the established GC's are put on day rate.
 
satcom said:
Since things went down hill, and more GC's are dead beats, we have them sign a day rate contract, we provide the day labor, and they need to pay in cash at the end of each day, we learned this method, from all the other subs, most of them have been burned many times, and even some the established GC's are put on day rate.
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well, GC's are waiting for money like everyone else.

on today's market, GC's are the least desirable customers for me.
it's one more layer between me and the money.

we've had general contractors here in socal who've closed doors
in this economy, after 70 and 80 years.

the reality, for most of us, is that we are working in a short money
economy, and every level of management between you and the
check issuer, is another level of potential default.

the best customer, for me, is a heavy commercial or industrial
customer that has a need for an electrician on an ongoing basis.
 
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