Typical commercial terms out my way specify 'retention', typically 10%.
Acceptance of the contract is accompanied by a downpayment large enough to cover the materials for a modest TI, say 15%... plus or minus...
As work proceeds, percentage of completion and other thresholds trigger progress billings.
When paid these billings are 'short' by the retention. You bill $100 and get a check for $90.
The retention is paid after the job is accepted and within so many days of that acceptance.
If you're not budgeting for the retention in your cash flow you've got troubles.
You also must have enough working capital/trade credit/credit lines to carry your payroll and such. You can expect to receive cash for labor paid to be a drain lasting weeks into months.
In todays world it is extremely common for the GC to ride all the subs for his working capital: ie he's going to pay slow, really slow.
I knew of one GC -- not a small player -- that was routinely nine months behind on his payments.
Government payouts are even slower. California famously paid all contractors with IOUs -- not redeemed for months.
Back charges for this and that...
Extras, change orders: you'll need to get these paid 100% -- no retention and in double quick time or you'll bust out. There is no way you can carry these to the end of contract. First, as time goes by the perceived value of them fades and fades: soon the Owner/Arch/GC can't understand why your bill should be so high. Second, should a dispute arise, you still have operational leverage -- probably enough to get paid. On one job, I shut the work down for one day -- to get payment on extras. The banker insisted on maintaining the timetable: we got paid with a cashiers check driven up to the office. ( It was a five hour drive for the Owner/Builder.)
In ANY commercial contract you'll have to amend it with your exclusions and inclusions. The exclusions will be essential. Typical exclusions would be taxes and fees and permits. Other exclusions might be buried difficulties like tough ground or undocumented crossing utilities. If you were a unionized contractor you'd have to have a wage pass-thru if the union contract is up for renegotiation.
You'll also have to have stipulations WRT GC/Owner supplied utilities: ie the temp power is on them. Alternately, you might bid a temp power side-deal. Normally, that is to be avoided. You'll find that the GC has your boys hopping all over the site replacing bulbs and repositioning light strings -- without compensation -- telling you that it's lumens on target that he contracted for. Now that the light string belongs to you -- it gets trashed -- I mean REALLY trashed. Stolen power boxes are your problem, etc. You can quickly see why most ECs just dump the temp power on the GC. Once it's his obligation it's amazing how the other trades respect his assets -- so they don't get back-charged!
Other issues that always affect profitability: parking, security issues, storage of major materials, storage of minor materials, etc.
Then there is the tough question of the GC himself: does he run a smooth operation or does he stack every trade known to man at the same time in the same place.
And then there is the issue of materials shifting. ( lighting package ) Our stuff is bulky, fragile, and comes in stages and from multiple sources. Who is to receive it on a smallish TI?
Do you HAVE to be on the site EVERYDAY?
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You should develop a punch list of these issues for every job bid so that you don't overlook a gotcha item.
8 years ago, my PM forgot to include the lift rental charge in his no bid contract submission. The profit on that deal thus became ZERO. He kept pulling such mistakes that eventually -- a million dollars later -- he got fired and was run out of the industry.
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Because of the massive distress in construction -- which will last for years -- you can expect to be invited to bid on work that is improperly financed and which requires you to be the banker. So watch out.
Many, many, many GC's are busted out and need you to be their banker, even the ones you think are solid veterans. Until you see the inside of their books everyone's solvency is guess work.
