Sometimes the subcontractor is asked to waive his rights for claims on extra work. Don't do it. Never give up your rights to claims for damages or the performance of extra work under any circumstances.
Subcontractors need to be compensated with more funds and time by the GC for all extras incorporated into the work that are not specifically spelled out in the contract documents. It is the general contractor's responsibility to retrieve those funds from the respective trades or owner that originally generated the extra. If the owner or any of the subcontractors or suppliers requests an extra from your firm, they should pay for it.
There is often a statement like this in the subcontract: “The subcontractor will not be paid for any extra work where the cost has not been predetermined and the time extensions have been agreed on in advance in a signed change order by the contractor.” This statement works in your favor.
However, back it up with a sentence something like this: “No extra work will be done unless requested in writing and a price agreed on by both the general contractor and the subcontractor.” However, as often as not, there will be a counter statement that says that the subcontractor must perform extra work without compensation when asked. It generally reads like this: “If any dispute arises between the contractor and subcontractor as to the interpretation of this subcontract, or as to the amount or to the extent of the changed work, the subcontractor shall proceed with the work upon written directive from the contractor pending resolution of the dispute. No dispute shall interfere with the progress of construction and the subcontractor agrees to proceed with his work as directed, despite disputes he may have against the contractor, owner, or other parties.”
This information is really saying that the contractor has the right to force the subcontractor to work for free. With no signed change order in place, the contractor can decide after-the-fact that he does not have to pay the subcontractor for that work.
Sometimes it's written like this: “Contractor shall not be liable to the subcontractor for any extra labor, materials, or equipment furnished without such written order…. Nothing herein contained shall excuse the subcontractor from proceeding with the prosecution of the work as changed, and failure to do so shall constitute a breach of this subcontract.” Again, it is saying that you – the subcontractor – have to do the work and the general contractor does not have to pay you for it.
Here is another troublesome clause: “In the event the subcontractor is directed to perform extra work, he shall proceed with the performance as directed by the contractor without regard to cost or time extension.” Don't do any work without an agreed on price in a signed change order. You will never get your money after-the-fact. Strike these kinds of statements from the contract.
Watch for cases when the general contractor gives himself the right in changes and back-charges to tack on a certain amount of overhead and profit, which he denies the subcontractor to receive in the same reversed situations. Never agree to something that is not the same for both you and the general contractor. If he can charge you 10% overhead and 10% profit, then you should be able to charge him the same on the changes that you send to him. Normally, in our industry it is 10% overhead and 5% profit.
If asked to work overtime, remember that the actual cost of this effort is not limited to premium time. My experience is that the loss of production due to fatigue for the following week is about 10% after working just one extra day on a weekend, and 15% due to fatigue after working two days on the same weekend. In the second week following one work day extra on the weekend, the loss of production due to fatigue is 20%, with a safety risk factor of 30%. After working two days on the second weekend, the loss of production in the following week is 30%, with the safety risk factor of 40%.
After just two working weekends, you are actually out overtime pay for the following week as well due to the loss of production. The masonry industry needs to have more of an awareness of this cost in the loss of production and the risk of accidents from fatigue and stress when it comes to working on weekends.
In cases of omitted work, the GC will try to slip into the contract something like this: “The general contractor has the right to withhold payments due…to the subcontractor an amount which, in the contractor's opinion, is equal to the value of the work until such time as the value thereof is determined by agreement or by the architect.” It is not fair for the general contractor to have the only right to determine the price of an omission. So, does this mean that the general contractor can just take away from the subcontractor any part of the contract at his discretion and determine the amount deducted, with no consideration for your trouble?
Yes, that is actually what its saying. You have the contract to do all of the work and should have the say as to the amount to be deducted when part of that contract is deleted. Calling the architect in on a dispute is really bringing in a biased mediator. He will favor the owner in preference to you. Try to negotiate for a non-bias mediator and never agree to the architect or owner for this job.
Ron Willis owns Masonry Estimating and Consulting Services (www.meacs.com). He can be reached at 817-822-8595 firstname.lastname@example.org.