I recently spoke with a couple who’d attended one of our two-day classes a few years back. They were the general contractor on a project that started to go south, and was picking up speed.
The project was a large remodel, between 200 and 300K. The price was agreed to, the contract was written, and the job had started.
The general contractor had other jobs in process, so when it came time to iron out the cabinet details, they let the cabinet subcontractor take over the design process. The cabinet company met with the owner without the general contractor present. The cabinet company representative told the owner that they’d charge an additional design fee to put the plans together for the cabinets.
Boom, that’s all it took, the customer was angry. They called the general contractor and shared their opinion on having to pay an additional design fee. As you would expect, that’s also when they started asking for proprietary information, and everything went downhill from there.
They called and asked for advice. To prevent them from ending up in this spot on any future projects, I started with, “This is why the job went bad.”
Some of you already know what I said. If there’s one thing a general contractor should never do, and I mean never, is let specialty contractors meet with owners on their own. There is always the chance that someone will say something that starts a fire, and you won’t be there to stamp it out before it grows. If I were the general contractor sitting in that meeting, I’d have thrown the cabinet company rep out the front door. Extra fee for the cabinet design my rosy red behind. That wasn’t the agreement.
If the cabinet company wanted a design fee, they should’ve told the general contractor directly and said nothing to the owner. Or, they should have just included the fee in their price to build and install the cabinets.
Let me back up a little bit. The cabinet details also should have been worked out before the contract was written. I don’t know why it wasn’t done earlier. I was told that the cabinet company couldn’t or wouldn’t quote the job without a detailed set of drawings for the cabinets. When I was in my early thirties, I worked as the cabinet division manager for a large remodeling firm for a year and a half, and I can tell you if that’s the case, this cabinet company doesn’t have an efficient estimating system in place for their work. An estimating database for cabinets, parts, hardware, and installation would allow the cabinet company to compile an estimate in an hour or less, and that would apply to almost all residential kitchens.
I suggested that the general contractor have a face-to-face meeting with the cabinet company and get things straightened out. Then we talked about going to see their customer to get these issues resolved, that day if possible. I also suggested some additional language that they needed to include in future contracts.
What’s the lesson? Never send a sub to work with an owner one-on-one. It doesn’t work, and it’s dangerous. These meetings are part of what the general is getting paid to do. If you can’t want to take the time and responsibility to put jobs together and make things happen in an orderly manner, it’s time to reconsider your priorities.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations as needed.
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