Before Hiring a Subcontractor

The working relationship between a general and subcontractor can be harmonious and productive. However, often, it is quite the opposite. If there are disagreements, the working relationship can be fraught with tension. The general contract is prudent to thoroughly research the subcontractor; this is especially true where the general contractor is unfamiliar with the sub company. Below are important considerations for general contractors looking to hire a subcontractor.

Ensure the Subcontractor’s Legitimacy 

Whether through a bidding process or a direct hire, general contractors must thoroughly research all possible and confirmed subs. One of these checks should include following up on past projects to assess the sub’s success within their field of work. General contractors must also check with state agencies to ensure that the sub is properly registered and cleared for the kind of work they intend to perform. Further, it wise to check on whether there are any existing or past legal claims against them. Here, general contractors must be careful to that they fully understand the legal claim against the sub. At times, the pending litigation may end in a dismissal. In this case, general contractors should err on viewing completed claims as more dispositive. Similarly, general contractors may find it beneficial to check on any administrative complaints or findings issued by licensing agencies regarding the sub.

Ensure Understanding of Payment Clauses

General contractors must be careful to understand contract clauses as to when payment is made to the sub. The payment clause should fit within the general contractor’s payment schedule as to not put a financial strain on project. Clauses that force a general contractor to pay the sub even when the owner has not paid, can burden the general contractor. A fairer contract clause contemplates paying the subcontractor when the owner pays the general. This ensures that the sub is working “on the same team”–so to speak–as the general contractor.

Ensure Agreement on Scope of Work & Timing

Scope of work and project timeline issues are two of the most contentious issues within a construction project. Confusion on these issues can bring about financial losses and detrimental project delays. When it comes to timing, the more specific the better. The general contractor should state this time in the contract to memorialize it and give it legal credence. The general contractor must ensure scope of work is clearly stated in the contract, design plans and specifications. The general contractor should reiterate the scope throughout the project and have a foreman track the work being done to ensure compliance. If the sub must alter the scope of the work, then the general contractor should ensure a streamlined change order process to facilitate effectiveness and efficiency.

Fort Lauderdale Construction Law Attorney

Sometimes construction disputes are unavoidable. Consult with an experienced construction law attorney to prepare for any possible contractual and legal issues. Protect your construction project and your money. Attorney Brendan A. Sweeney has years of experience advising on and drafting construction contracts. Contact us now for a consultation.