Payment and cancellation

Nothing is charged before there is a signed contract

A first conversation costs nothing, whether on the telephone or standing on the site. So does a concept budget built from the published ranges. So does reading your subcontract exclusions down the telephone and telling you what is missing between them.

Preconstruction services — real budgeting, constructability review, bid list development and scheduling over weeks — carry a fee, because they are real work by real people. Where that applies we agree it in writing in advance, and it is normally credited against the construction contract if you proceed.

No work of any kind begins before there is a written, signed contract.

The schedule of values

Every contract carries one: the whole project broken into divisions, each with a description and a sum, adding to the contract amount. It is agreed before work starts and every pay application is drawn against it.

Getting it right matters more than owners usually realise. A schedule of values that is front-loaded — where early divisions carry more value than the work in them justifies — lets a contractor be paid ahead of the work, which is exactly the position you do not want to be in if things go wrong later. You are entitled to review ours before it is approved, and you should.

Our contingency and our fee are stated separately and visibly within it. A number with the contingency buried inside the line items is not more competitive, it is less legible.

Monthly pay applications

Work is billed monthly against percentage completion of the schedule of values, on your form or on a standard industry form, supported by the documentation the contract requires.

A complete application normally carries the continuation sheet showing each division and its percentage complete, conditional lien waivers from us and from subcontractors and suppliers for the current period, unconditional waivers for the previous period once paid, certified payroll where the project requires it, and updated schedule information.

An application arriving without those is an incomplete application, and we would rather not be the reason yours is held. What we ask in return is that the requirements are written into the contract rather than introduced at the first application.

Stored materials are billed before installation only where the contract allows it and with the documentation it requires — typically proof of purchase, evidence of proper storage, and insurance. Where it does not allow it, they are not.

Retainage

Withheld at the percentage the contract specifies, from each payment, and released as the contract specifies — normally the bulk at substantial completion with a portion held to final acceptance and closeout.

Tying the final release to closeout is correct and we support it. It is the owner’s only real leverage to ensure the as-builts, the manuals, the warranties and the test records actually arrive, and a contractor who objects to that arrangement is telling you something. See closeout and what you receive.

Colorado has statutory provisions governing retainage and prompt payment on public projects, and those govern over anything on this page.

Change orders, and the three kinds

A change to the scope is priced and agreed in writing, before it is carried out. No exceptions, including for changes we think are obviously beneficial. We will not act on a verbal instruction; it is how disputes start and the party it hurts most is the owner.

Three things generate change orders on a commercial project, and it is worth separating them because they are not the same conversation.

Owner changes. Yours, priced as they arise, and entirely legitimate. This is what your own contingency is for.

Differing or concealed conditions. Shared, and dealt with under the contract’s own provisions. Reduced by opening things up before the contract is signed, which is why we push for exploratory openings on any work against existing construction.

Scope gaps. A scope nobody bought, discovered in the field. These are the ones this whole site is about, and they are the ones that should not happen — because they are findable at levelling for roughly a tenth of what they cost later. Where one does arise on our project despite that, we will tell you plainly that it was a gap rather than dressing it as a condition.

Allowances and contingency, which are different things

An allowance is a stated sum for a scope that is defined but not yet selected — a floor finish not yet chosen, a fixture package not yet specified. It is reconciled against actual cost when selected, in both directions.

A contingency is a sum for what is not yet known. There are normally two: ours, inside the contract, for construction risk within our control; and yours, outside the contract, for scope you decide to add. An owner without their own contingency has no way to say yes to their own good idea, and that is an uncomfortable position at month eight.

Both are identified in the schedule of values rather than buried. Where our contingency is not used, the contract says what happens to it — frequently it is returned or shared, and the arrangement is agreed up front rather than discovered at the end.

Delay, and whose it is

Excusable and non-compensable: weather beyond the contract’s stated parameters, time in authority review, and events outside either party’s control. The schedule moves; the contract sum does not.

Excusable and compensable: owner-directed changes, access not provided, decisions not made within the agreed period, and suspension. The schedule moves and the direct costs are recoverable.

Neither: our own failure to schedule a subcontractor, our own failure to order a long-lead item in time, our own rework. That is ours and it does not extend the contract.

Weather on a Front Range commercial project deserves a specific note: the contract should state the number of anticipated adverse weather days, and days beyond that count generate an extension. We track them daily in the daily report, so the record exists before anybody needs it rather than being reconstructed afterwards.

Liens, waivers and how you are protected

In Colorado, a subcontractor or supplier who is not paid can record a mechanics lien against the property, even where the owner has paid the general contractor in full. It is one of the genuinely serious features of construction and many owners have not thought about it until it happens.

What protects you is the waiver trail: conditional waivers with each application and unconditional waivers once payment clears, from us and from our subcontractors and suppliers. You are entitled to require those, and you should, from any contractor. A firm reluctant to provide them is telling you something important.

You are also entitled to a list of subcontractors and suppliers on your project, and to be notified of changes to it. We will provide one — and on this site, where the whole argument is about who was bought and how, it would be strange not to.

On public projects a payment bond serves a similar protective function.

Bonding and insurance

We carry general liability insurance and workers’ compensation, and we will provide certificates naming you, your property and your project — before the contract is signed rather than after. Where additional insured status, waivers of subrogation or specific limits are required, tell us at bid stage so they are priced rather than negotiated later.

Bid, performance and payment bonds are arranged through our surety where a project requires them. This site does not publish a bonding capacity, because a figure on a web page is not evidence. What is evidence is a letter from the surety addressed to you, for your project, and that is available on request.

Two things worth confirming with every contractor, because the consequence lands on the owner: that workers’ compensation is genuinely in place, and that the licence is current with the jurisdiction for your project.

Suspension, termination and cancellation

Before notice to proceed. A proposal not accepted costs you nothing. Where a contract is signed but no notice to proceed is issued and the owner cancels, we invoice only work actually authorised in the interim.

Suspension for convenience. The direct cost of demobilising, protecting work in place, securing and weatherproofing the site, maintaining insurance and bonds, and remobilising is recoverable, and the schedule is extended. Tell us early and all of those numbers are much smaller.

Termination for convenience. Work performed to date at contract value, materials fabricated or delivered for the project, subcontractor and supplier cancellation costs actually incurred, and demobilisation. The contract’s termination clause governs the detail, and we do not charge a penalty for a cancelled project.

Termination for default. Governed by the contract and, where one exists, by the surety arrangements.

If something is wrong with the work

Tell us, as early as you notice it. Workmanship defects in work we performed are corrected at our cost within the warranty period stated in your contract, and Colorado law provides statutory periods for construction defects that run considerably longer.

The single most useful thing an owner can do is raise an issue during construction rather than at the final walk. A problem raised while the crew is on site is fixed by that crew. The same problem raised at substantial completion is a return visit, and one raised two years later is an investigation before it is a repair.

Where a submittal or closeout document is rejected for format rather than substance, we resubmit it corrected at no charge. Getting a format wrong is ours to fix, which is why we agree the format at the start.

How to raise any of this

Telephone (303) 986-4555, Mon–Fri 7:30 AM–4:30 PM MT, with the project number or the project name. Or email [email protected].

Where a contract, subcontract or public bid document exists, it governs over everything on this page. These notes describe our default position so that it is visible before you award work, not instead of the contract.