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#179501 - 07/15/08 11:04 PM trying to get payment from a gc  
willfescon  Offline
New Member
Joined: Nov 2007
Posts: 7
florida, USA
Been in business for about a year. Built it up, lots of service work and made some clients. Got the electrical repairs on a large apartment complex reroofing project. Put in my resignation a few weeks ago and I am out on my own.

Supposed to be paid weekly. Turn in invoices on Thursday, and get paid the following Friday the next week. I agreed to this. But my supply accounts don't have a high credit limit due to my short time of being in business.

First payment wasn't there, but after having a meeting with the owner he reluctantly paid me for a few of the invoices but not all. The next week the same. I'm just trying to get an idea of what the holdup is, because I'm still working on the project, and I honestly don't know why the checks aren't there. All I can get out of anyone is "waiting on the surety" and the bond company hasn't released the checks yet.

Not sure where to go from this point, everyday I'm asking and being told I will get an answer, only to no avail by the end of the day no one is available and no one returns my voicemails.

It's getting to the point where this can't keep going on. So far they've paid about 20% of the balance due on invoices which should be about 90% paid at this point.

Any suggestions, I don't want to lose the project, it's the biggest one I have, but I don't want to go much farther in the hole at this point either. And it's only been 3 going on 4 weeks.

Last edited by willfescon; 07/15/08 11:06 PM.

Business, Office, Estimating, Legal:

#179503 - 07/15/08 11:30 PM Re: trying to get payment from a gc [Re: willfescon]  
gfretwell  Offline


Member
Joined: Jul 2004
Posts: 9,124
Estero,Fl,usa
There is nothing wrong about asking for the money they owe you. Companies, and some real big ones, use accounts payable as a place to juggle their cash flow. They will keep their money as long as they can, at least until the next reporting period. You really need to be the squeaky wheel and let them stiff someone else. If this company is in trouble and big is no indication, you don't want to be holding the bag too long. Best case is they are just slow and have your money held up to make a quarterly number, worst case is they just don't have it.


Greg Fretwell

#179506 - 07/16/08 12:04 AM Re: trying to get payment from a gc [Re: gfretwell]  
willfescon  Offline
New Member
Joined: Nov 2007
Posts: 7
florida, USA
From what little info I've been able to get, it sounds like they don't have the money, they are blaming the bonding company for not paying me. I'm confused because that's not how I thought a bond worked. I was expecting the GC to pay me directly. At this point I am worried they are just stringing me along but it makes little sense. I bid the job very low, and the only way I can even afford to do the job at this price is that I have almost no overhead costs. So I can't imagine them finding a better deal very easily from another EC. I'm sure they can find one, someone will always bid it lower, but I don't think it will be easy for them.


#179512 - 07/16/08 08:06 AM Re: trying to get payment from a gc [Re: willfescon]  
Zapped  Offline
Member
Joined: Oct 2002
Posts: 482
Huntington Beach, CA, USA
Here's your job - perform the work.

Here's their job - deliver the checks.

I would stop work. They have! They have stated that there is a reason that they have not given you your check. The fact that they haven't given you your payment is a good reason that you can no longer continue to give them your hard work.

Look, I know it's not as easy as that at first because you want to work and you want to have work, but it's an unfortunate reality of being in business - people will try to take advantage of you. The only way to win in those situations is to remove yourself from the game they are playing with you.

One of two things will happen: they will decide that it's time to pay you so they can complete the job or they will not pay you and hire someone else to not pay. You have to decide if you trust them, but at this point it looks like they're string you along. The time you spend not getting paid on this job is time you could be pursuing paid work elsewhere.

Whatever you decide to do, best of luck to you and I hope you get your money!


#179513 - 07/16/08 09:08 AM Re: trying to get payment from a gc [Re: Zapped]  
renosteinke  Offline
Cat Servant
Member
Joined: Jan 2005
Posts: 5,316
Blue Collar Country
A few things I've observed the past few years ....

I have seen situations where the sub got paid weekly - he either got paid when he turned in the bill / that Friday ... or he didn't show up Monday.
On one job, the moment the customer started hemming and hawing, the crew began taking apart what they had built. "Until you've paid, it's ours." They got paid. In full - but not after a few go-rounds of counter offers, etc.

On another job, a sub didn't get paid. Indeed, he and the GC had a difference of opinion as to the amount due. The sub complained to the contractors' board, was paid from the bond posted by the GC, and the GC had his license suspended until the bond was made whole.

In a number of instances, various firms - both large and small, all "respectable" - turned out to have company policies to not pay bills, period, for 60 or 90 days. Mind you, these same firms were real careful to collect from their customers immediately.
My position is straight from the old saying: I have an arrangement with my bank. They don't do electrical work, and I don't make loans. Such folks don't get me to work for them a second time.

Could you build such a 'float' into your pricing? Perhaps. Indeed, I charge new customers "full price." If I have any doubts as to their sincerity, the price goes up. Only when a customer has proven to both provide regular work, and pay promptly, do I 'sharpen my pencil.' Just yesterday, as an example, I 'ate' the hour it took to gather parts for such a customer. I have the check for that job already.


#179514 - 07/16/08 10:11 AM Re: trying to get payment from a gc [Re: renosteinke]  
Zapped  Offline
Member
Joined: Oct 2002
Posts: 482
Huntington Beach, CA, USA
Good advice from Reno, as always...

BTW, if the GC hired you and you have a contract with him, then it is he who must be sure that you are paid. No "if", "ands", or "but"s about it. It is also he who needs to be reported to the contractor board if payment is not received.

You DO have a contract, right? If the answer is no, then you need to cease all work immediately until you have a signed contract for any further work, even if they pay you for what you have already done. DO NOT WORK WITHOUT A PAPER, SIGNED CONTRACT. If they have any problem signing a contract, run for the hills my friend. There is no bigger red flag than that.

Good luck!


#179515 - 07/16/08 10:30 AM Re: trying to get payment from a gc [Re: willfescon]  
willfescon  Offline
New Member
Joined: Nov 2007
Posts: 7
florida, USA
We don't have a contract, I invoice each repair I do for them and charge by the hour. I have a flat rate I have given them on service repairs because they are all the same. I invoice them weekly. And yes, if they don't pay I have no choice but to cease all work.

My main question is, why would they be using bond as an excuse to hold up payment? Why would the surety pay subcontractors? Does that sound like a legitimate excuse?


#179516 - 07/16/08 10:53 AM Re: trying to get payment from a gc [Re: willfescon]  
Zapped  Offline
Member
Joined: Oct 2002
Posts: 482
Huntington Beach, CA, USA
There really is no legitimate excuse. If they are really having problems getting the money to pay you, that is unfortunate for them, because they can no longer afford to have you performing any more work for them. There really is no grey area there.

Eventually, you will learn to let excuses go in one ear and out the other. If you didn't provide the work and still wanted to get paid, they would NEVER even consider writing you a check, no matter what excuse you gave them. Why should you conduct business differently than they would?

If you don't pay your cell phone bill, they stop providing you with the service. It's really simple and really effective.


#179517 - 07/16/08 11:09 AM Re: trying to get payment from a gc [Re: willfescon]  
A-Line  Offline
Member
Joined: Jul 2004
Posts: 272
Utah, USA
Originally Posted by willfescon
We don't have a contract, I invoice each repair I do for them and charge by the hour. I have a flat rate I have given them on service repairs because they are all the same. I invoice them weekly. And yes, if they don't pay I have no choice but to cease all work.

My main question is, why would they be using bond as an excuse to hold up payment? Why would the surety pay subcontractors? Does that sound like a legitimate excuse?

You can still have a contract signed ahead of time even when working like this. The contract would specify the hourly rate, the markup on materials and the payment terms. The contract would specify that you are to be paid weekly and what will happen if you're not. It's hard for them to dispute this when you have a signed contract from them agreeing to these terms.

There's no reason not to have a signed contract even if you're working on a T&M basis.

Last edited by A-Line; 07/16/08 11:10 AM.

#179523 - 07/16/08 01:37 PM Re: trying to get payment from a gc [Re: A-Line]  
LK  Offline
Member
Joined: Jan 2003
Posts: 1,429
New Jersey
Originally Posted by A-Line
Originally Posted by willfescon
We don't have a contract, I invoice each repair I do for them and charge by the hour. I have a flat rate I have given them on service repairs because they are all the same. I invoice them weekly. And yes, if they don't pay I have no choice but to cease all work.

My main question is, why would they be using bond as an excuse to hold up payment? Why would the surety pay subcontractors? Does that sound like a legitimate excuse?

You can still have a contract signed ahead of time even when working like this. The contract would specify the hourly rate, the markup on materials and the payment terms. The contract would specify that you are to be paid weekly and what will happen if you're not. It's hard for them to dispute this when you have a signed contract from them agreeing to these terms.

There's no reason not to have a signed contract even if you're working on a T&M basis.


Yup you always need a signed contract, and we do a credit check on the GC's to be sure they have the means to pay, most of the subs in this area work Day Rates for the GC's paid at end of day or no show the next day until the previous day is paid in full.

I see a real problem, when you say you have no or low overhead, then something is wrong with your operating practices, are you fully insured general libality, workers comp, and you must have a magic carpet, because our trucks equipped with tools and material are a killer expenese.

Bid low and you will always get your foot blown off.


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