Providing my own contract

[Moore Power]

Thanks in advance. I've been in business 3.5 years doing mostly commercial T.I.s with nation wide contractors. Now with 3 employees I am trying to get bigger projects that I can keep a couple guys on for a while. My issue is funding, generally the project is close to completion before I get my first check with the "pay when paid" terms of the contract the GC supplies. Do you guys invoice mobilization? How do I take that next step without taking out a loan? I'm assuming on larger projects ECs are providing their own contracts with their own terms. Any advice, contract template, experience is greatly appreciated. I jumped in blind and have been learning along the way.

 

[brantmacga]

It is fair to have a mobilization line item on your schedule of values, but it’s not typical to provide your own contract to a GC.

The terms can always be negotiated though. If you plan to take on a job you can’t float you need to discuss that with the GC before signing. Pay when paid is not legally enforceable in some states. But the GC may pass on you to work with a contractor that has the financial means to wait.

I would try to negotiate the minimum payment you can accept and survive until the owner pays a draw to the GC.

You may also try to negotiate having no retainage held on stored materials. The GC is often working under the terms of the owners financing and will have to come out of pocket to cover you.


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[Moore Power]

It is fair to have a mobilization line item on your schedule of values, but it’s not typical to provide your own contract to a GC.

The terms can always be negotiated though. If you plan to take on a job you can’t float you need to discuss that with the GC before signing. Pay when paid is not legally enforceable in some states. But the GC may pass on you to work with a contractor that has the financial means to wait.

I would try to negotiate the minimum payment you can accept and survive until the owner pays a draw to the GC.

You may also try to negotiate having no retainage held on stored materials. The GC is often working under the terms of the owners financing and will have to come out of pocket to cover you.


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Thank you. That is very helpful.
"I would try to negotiate the minimum payment you can accept and survive until the owner pays a draw to the GC. "
Are you saying that this payment would be due after signing the contract? Is 10% mobilization on an $80,000 job reasonable? Either way the key seems to be developing a relationship with a local GC that wants us on the job. Thanks again.

 

[brantmacga]

Thank you. That is very helpful.
"I would try to negotiate the minimum payment you can accept and survive until the owner pays a draw to the GC. "
Are you saying that this payment would be due after signing the contract? Is 10% mobilization on an $80,000 job reasonable? Either way the key seems to be developing a relationship with a local GC that wants us on the job. Thanks again.

Well you wouldn’t be able to bill mobilization until you actually mobilize on the job.

But, there are GC’s that will front money to their preferred key subs. Like you said it’s all about relationships .


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[d0nut]

Be very careful when taking on a job that is significantly larger than you have done before. You are worried about floating the financing until a draw, but what happens if the job goes south and you don't get paid that draw at all? Taking on too large of a job and needing it to go perfectly to meet payroll is how contractors lose their companies.

 

[Strathead]

Thank you. That is very helpful.
"I would try to negotiate the minimum payment you can accept and survive until the owner pays a draw to the GC. "
Are you saying that this payment would be due after signing the contract? Is 10% mobilization on an $80,000 job reasonable? Either way the key seems to be developing a relationship with a local GC that wants us on the job. Thanks again.

Technically, you should be able to "justify" whatever you charge for mobilization, but 10% has always been typical for me. You need to be able to talk, submittals, container rental, permits, office expenses, etc. to justify. Remember that 10% would technically be 7,200 because of retainage. I would strongly suggest you have the line of credit in place to carry costs for at least 60 days, and be lucky if you just never need it.

Also, you don't need "your own contract" and in fact my company does 20 million dollar jobs and I am pretty sure the CM's would never let us use our own contract. But feel free to mark up the contract they send you. All they can do is say no.