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Construction Programs & Results Inc

We Like to See The Good Guys Win!

How Not to Do Business

by Michael Stone

A friend called today with a problem. He subbed his work to a general contractor from the east coast to do a job here on the west coast at a government facility. After his work was done, the general contractor told him they decided he has to reduce his price from just over $29,000 to around $19,000. If he doesn't reduce his price, they weren't going to pay him at all.

It wasn't the first sign of problems on the job. The general contractor got behind on starting the job. The government procurement officer gave them a deadline on getting started, and they called my friend in a panic to ask him to start as soon as possible to keep them from losing the contract. He did – and now they are playing games to keep from paying him.

This also leads me to believe that they can't or couldn't get their regular subcontractor to work for them because they've pulled this baloney before. And I'll bet they are having money problems. My guess is that they got the job as the lowest bidder, probably at their cost or even below. They are losing their behind, and trying to get the subs to make up the difference.

My advice was to call an attorney and go after the general contractor. Don't wait a minute, and make sure he includes all costs to collect and his attorney's fees. In addition I suggested he send a letter or make a visit to the offices of both his Senators and his Representatives. They should know how businesses are being treated on government contracts.

Folks, when a company calls and wants you to start work on a project for them right away because they are in trouble, there might be a good reason they are in trouble. Be careful, find out the facts first. All that glitters is not gold.

And if you end up getting a squeeze like this, make sure you have good documentation and pictures if needed, and go after them immediately. This is a good example of how the scumbags in our industry operate. When you come in contact with them, make noise. Go after them with everything you got. We don't need these kinds of people in the construction industry.

 

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