Re: Hiring a contractor....... what are the terms....

Posted by Billy NY on July 26, 2011 at 14:07:22 from (74.67.3.54):

In Reply to: Hiring a contractor....... what are the terms.... posted by Lloyd in South Carolina on July 26, 2011 at 11:39:24:

It may sound harsh and may not apply to small contractors and jobs, but your money is the ONLY leverage you will ever have, besides a SIGNED contract. Contractor is doing the work, on good faith that they will be ultimately paid in full for all work in place, that is acceptable or accepted by said owner.

My only concern, unless I know their work, would be warranty, do they back up their work if defective.

On large jobs, payment is billed through a requisition process, and payment disbursed for acceptable work minus 10% retainage, each requistion. It's called percentage of completion method, nothing is provided up front, contractors must demonstrate financial stability. The retainage is held for 1 year or whatever the terms are, in case there are issues, ranging from minor end of job punch list items to more serious problems, owner still has contractors money and some leverage. Nothing is perfect, but that is basicially how it is done in most of the contracting word.

Now it may be apples and oranges, and the large scale projects means, methods, controls etc. may be overkill, but so many times I have seen small contracting jobs where both the owner and the contractor could benefit from applying what we do on big jobs, its just a lot smaller, but certainly helps weed out the "fly by night" types. Payment terms/ scope of work, building designs; plans, specifications, schedules, changes are typical in a standard subcontract agreement.

If were me, and I was hiring out, I'd find a reputable contractor, have them provide references to jobs they have done, go look at those, demonstrate financial stability and the willingness to commit to the job by signing a contract agreement to do what is called for in their scope of work. This is incentive to mobilize, start-finish the work, bill the owner and to get to the next job.

The contracting world still has a ripe element of technically challenged, sub-standard, experience lacking, not good standing with suppliers and financially constrained contractors, it probably always will, and is why a good construction manager is retained by any savvy owner of a large scale job. The last thing I ever want to see on a job is a problematic contractor who starts off by not showing up on time, meeting a schedule, unsafe, and is enthusiastic about doing the right work, completing the job, and billing the owner.

You can hire out work in many different ways, but buyer beware, it's wise to set things straight up front, I've seen it so many times where owners get strung along, taken for excess amounts, no shows that were paid up front, partial or in full.
If they do not have an account and are in good standing with their suppliers, I really do not want them on my job, this says a lot about the company. Now that does not mean if you work out a deal with a reputable company to pay for the materials when DELIVERED, and accepted, for an owners cost savings that they are necessarily bad, but most contracts read somewhere, to provide materials and labor, a good stable contractor should be able to deal with 30 day terms like any other business.

If you want peace of mind about concrete quality, I would recommend having test cylinders filled by an idependent test lab, worst case you take em your self, get the cylinders, fill them with the mix, 1/3 of a cylinder at a time, rod 25x,(pack with steel rod) fill another 1/3 of cylinder, rod 25x, repeat the for last 1/3, cylinder will now be full, screed off the top, take a total of 4 cylinders, they then can be broke @ 7, 14, 21, 28 days for compressive strength tests, or you could just hold them for reference, if there ever is a claim of defective material that independent test lab will support it and said contractor knowing this is being done would know it to be wise to not screw around.

I know it sounds like a lot of over thinking and overkill for small work and I would agree to an extent. Contractors do not like to see me on jobs, because someone is watching with a keen eye, but given the unknowns and the money being spent, I find that it's good for owners to be informed and have an ability to select a reputable contractor and effectively manage whom they hire, even if it is just a small ag or shop type building.

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