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Post below - small to large commercial jobs5/7
I didn't want to hijack the thread below, so I'm starting a new one. In there, posters are lamenting about the payment structure of commercial jobs. I agree and think it's ludicrous. The question I have is what's being done about it? Why has it become the status quo, and simply accepted as the only way it can be? Why aren't our industry advocates such as AWI (by explaining and working with the AIA) stepping up to the plate to help fix it? Of all people, why should we be their bank?
Should we really be lumped in with the Plumbers, Carpenters and Electricians? They buy their materials off the shelf, and perform almost all of their work onsite. Our overhead differs greatly, and we actually manufacture a product, instead of just providing a service.
Why aren't we material suppliers, much like the other furniture? I suppose I can see the contract being applicable to the installation, but ALL of it?? I can't think of any other business that custom manufactures a product with such unfavorable terms. Take a look at the custom office furniture industry. AFAIK, almost all projects started with some form of deposit. Just like we expect when doing residential.
Ok, I guess I'm done...someone moved my soapbox....
You do get to bill when the "material" is delivered to the job. We are not waiting until the job is finished to bill them, we give them progress invoices.
IMO the GC's play games with the money literally turning us into banks. At most the GC gets 20% of the job for his services. That means he has 80% of the money to play with. He can be technically bankrupt for a very long time before actually having to declare it.
Also the cabinet guys are one of the last in line to get paid. As the budget overruns accumulate there is less money to pay the remaining subs.
I've noticed that when a job has a lot of change orders the likelihood of the contractor and owners ending up in a court battle increases greatly. That almost always means our last payment will be withheld until the court battle is finished. Change orders are always a touchy subject with owners. They often seem to feel abused, probably are.
We bill for a material draw at the same time
One of the biggest steps we have made is a lot is curbside and we exclude field dimensions We ship per the gc's project mangers schedule and we refuse to get into the habit of being on the "rfi" "super coordinated" wait until I give you that info delays. You get what we bid. The end.
We start drawings right after we get contracts and send them in asap.
The fact of the matter is yiu hsbe to be your own champion for the money aspect. It's just impossible not too. Realizing the gc is operating on the customers money is the key. Forget the idea they will write you s check out of their finds