I was asked a question recently by an electrical supplier. I want to share my response, and I’d really like to hear your opinion as well.
Why do general contractors often not want their subcontractors to have any communication with the home owner?
I’ve spent time as both a subcontractor (licensed plumber) and a remodeling general contractor. I have the greatest respect for both subs and generals, and I believe that the only good business is when everyone wins. In my opinion, the best way to keep a project win-win is to establish a chain of communication and keep it in place. The owner talks to the GC (general contractor). The GC talks to the subs. The owner doesn’t talk to the subs, and the subs respect that by deferring to the GC.
Consider it like any other workplace. The owner is the boss. The GC is the manager, reporting directly to the boss. The subs report to the manager. When the boss goes around the manager to talk directly with the subs, it’s either because the boss forgot or because the boss is trying to avoid the manager.
If the boss forgot, they need to be reminded to speak to the manager instead. If the boss is trying to avoid the manager, there’s a reason and the manager is probably going to lose.
I’ll list a few scenarios that can and do happen when owners talk directly to subs on the job.
- Owner offhandedly says to the sub, “How much would a new light cost in the dining room?” The sub answers, “$200 to $250, depending on the fixture.” What the sub doesn’t know is that the same conversation happened yesterday between the owner and the GC, and the GC answered, “$500 to $700, depending on the fixture.” The sub either doesn’t know, doesn’t care or forgot that the price they give the GC isn’t the same price the GC gives to the owner.
- Owner says to the sub, “I have a sink upstairs in my master bath that I would like to change out. Can you do that for me?” The sub answers, “Sure, I’ll come over Saturday morning and do the job. I won’t charge you near as much for that as the GC will.” This is dishonest and takes advantage of the effort the GC put into generating the lead and making the sale.
- Often owners will ask subs how much they charged the GC for their work. The sub answers the question, not realizing the problems this can cause the GC if the GC has given the owner the full marked-up price for the subs work.
Why is it any of the owner’s business what the sub charged? They made an agreement with the GC for the entire project. The only reason to ask this question is to claim they were overcharged when it’s time for the final payment.
- Owners will often go to the sub to change the scope of work to be done. Owner says to the sub, “We want to change the lighting in the kitchen from what is on the plans. We want to add six more can lights over the bar area. We don’t think there will be enough light as the plans now show. Can you do that for me, and what will it cost?”
Sub says, “Sure, can lights would be $90 each installed. Show me where you want them.” What the sub doesn’t know is that same conversation happened during the original sales process and the GC told the owner that can lights normally run $150 – $200 depending on the fixture finish. The owner chose to not include the six lights because they were trying to save money on the overall job expense. They read somewhere online to check the prices with the subs because the subs price will be 50% to 100% less than the GC’s price.
- Another variation on the same scenario is an owner adding to the scope of work by saying to the sub, “While you’re here, would you please . . . ” The sub does the work and sends a bill to the GC, but the owner won’t pay because it’s not in the contract and a change work order wasn’t written and signed.
- Subs aren’t always aware of the time schedule on a given job and will make promises about what can be done and by when without checking with the GC first to find out the actual job schedule. Or, the GC tells the owner that the sub will be on the job Wednesday and Thursday to do the work. The sub then makes other plans and tells the owner before informing the GC, “I can’t be here on Wednesday, I have another job to do for ___!” Both scenarios end up making the GC look bad unnecessarily.
Every one of these scenarios can happen with an employee as well as a sub. Both employees and subs need to know that it’s not appropriate to enter into conversation with an owner.
I don’t like saying this, but it also includes casual conversation. Many of these scenarios don’t happen with an owner approaching a sub and blurting out, “What was your price for this job?” They start with discussion of the weather, family, career choices, the challenges of being in business, and by the way, how do you set your prices? How much did you charge for this work?
Do I sound like I don’t trust people? Sadly, that’s the situation. That’s why we write contracts. People who appear honest and upright, professional and trustworthy, will lie and cheat when it comes to money. Owners attempt this (cheating a general by working around them on a job) even more than they used to. And remember that in every one of these scenarios, it’s the GC who loses. Not the owner. Not the subs or employees. The general contractor is the one carrying the risk of an argument over money that will result in the general not getting paid.
Don’t forget that the GC is also liable for work done by their subs. In any warranty situation, the owner will call the general and expect them to fix any problems or issues, including those involving the work of the sub. If the sub is out of business, the general will need to hire a different sub to fix or repair that job. Also, the GC paid for and generated the lead and has the relationship with the owner; it’s wrong for a sub to take advantage of that by generating additional sales from that lead without including the GC.
I’ll contend that a sub shouldn’t need to talk with the owner. If the GC does a good job layout for the sub, they should have all the info they need to do the job. If the sub doesn’t have all the info, they should ask the GC. Common sense tells you that the owner doesn’t know or understand construction or they would have done the work themselves. The only thing the sub should say is, “Good morning” or “Thank you, see you tomorrow.” In other words, hello and goodbye.
I have no issue with a sub talking to an owner with the GC present, but the GC needs to set guidelines with the sub, ahead of time, on whether or not they can talk money with the owner. And if the owner asks direct questions of the sub regarding money, or the sub starts talking about money, the GC needs to be strong enough and diplomatic enough to step in.
This is why you need a subcontractor manual. Our manual has the following sentence in the signed agreement: “SUBCONTRACTOR understands and agrees that they are not to talk to the Owner except to be cordial. Any questions, problems, changes or other communications by Owner are to be referred directly to (Company Name).” This needs to be reiterated verbally between the GC and the subs on a regular basis.
I know our readers are both subs and generals. And I know our readers have opinions. Tell me what you think.