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.General and Subcontractor Talking

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.

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Kris Morgan
Kris Morgan
April 5, 2018 7:34 pm

The problem we are having with the GC is they won’t show proof of progress payments being made to subs. We have received 4 notices of Right to Lien from subs, and we have no proof subs have received any payments. It is our money and GC refuses to be transparant and business like. Keeps saying, “Subs haven’t provided receipts.” We’d like to see responsible professional documentation of how our construction funds are being spent. These subs could lien our house. We want to believe GC is honest, but this is a big red flag. Progress payments are going to… Read more »

Devon Stone
Admin
Devon Stone
May 22, 2018 9:08 am
Reply to  Kris Morgan

Kris, we’re assuming you have a fixed-price contract. You can ask for a release of lien from all subs prior to final payment to your contractor; and/or ask for release of lien from the pertinent subs as items are completed. For instance, if the electrician is done with finish work, ask for a release of lien from the electrician. When the flooring is installed, ask for a release of lien from the flooring contractor.

Zack Scriven
Zack Scriven
December 22, 2017 10:19 am

Personally I believe in price transparency. If the General Contractor is providing a value-able service, they should not have to hide its markup. (Unless they are ripping off the customer)

pharmgirl1
pharmgirl1
February 5, 2019 9:22 am
Reply to  Zack Scriven

Agreed

Rob of Raleigh
Rob of Raleigh
August 12, 2015 7:03 pm

I’ve learned this through another GC who sets the boundaries early in the bid the contract processes. To the subcontractors: “Any work performed outside of your estimate, will not be paid.” To the customer: “We do not warranty any free work.” Enough said and everyone understands. They also forewarn the customer of any changes, outside of the “unforeseen”, will cause scheduling delays with additional labor and project costs. If these boundaries are clearly laid out in the beginning, then there is no scrambling and back peddling later trying to protect yourself when a customer attempts to take advantage of you… Read more »

clubgitmo
clubgitmo
March 28, 2015 2:39 pm

As a licensed sub I agree with this article. Too many homeowners are trying to get things “cheaper”.

Lorraine De Forest Garrett
Lorraine De Forest Garrett
March 27, 2015 5:02 pm

As a custom stair building company, with over 15 yrs. experience, we have successfully completed many projects that were generated by owners contacting us, architects contacting us, general contractors hiring us, and combinations of the above. When a curved stair is a focal point for an owner, they sometimes contact us first, and ask us to recommend a general contractor who we have worked with and respect. Once the contractor is selected, then we work directly with that contractor, or his/her supervisor. I don’t think it matters if the husband or wife is in charge. The contractor is responsible for… Read more »

Valhalla Construction LLC .
Valhalla Construction LLC .
March 25, 2015 11:07 am

What do you do about the owner builder types though? The ones who want to manage their own job? I had a client one time who hired me to renovate a section of the house. It turned into a much bigger project than anticipated because of unseen conditions that we discovered once we started pulling walls apart. Ended up gutting that section of the house down to framing from roof rafters to dirt. Even had to reframe the subfloor. Anyway, I showed up one day after we had just wrapped up framing and were finishing with the new electrical and… Read more »

Guest
Guest
March 26, 2015 5:32 pm

Why would you do that? What would have happened if the painter came on Monday and the drywall wasn’t ready?

Valhalla Construction LLC .
Valhalla Construction LLC .
March 27, 2015 9:51 am
Reply to  Guest

Then I would have said told you so. I was ready to get the hell out of there anyway. It was a great job that went south really fast, mostly because the client was super stressed out over the house.
The invoice I gave them made up for it though. 🙂

Valhalla Construction LLC .
Valhalla Construction LLC .
March 25, 2015 10:54 am

This has happened to me many times. It has always ended badly. It’s in my contracts now, and subs are told at the start not to discuss the job with the client.

Barry Thomson
Barry Thomson
March 25, 2015 6:37 am

I’ve driven this point home with employees and subs a number of times and I find it is something that has to be reiterated periodically especially when we very occasionally encounter a certain type of client who appears to be honest and upfront but turns out to be anything but. I am always telling my guys to be professional and polite but not to engage in lengthy conversation as after all they are there to get a job done. Often a few days in to a bathroom or kitchen reno the client will ask my crew or trades when they… Read more »

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