How do other contractors handle back charges to GMP subcontractors? If the contractor performs site cleanup on behalf of a subcontractor (a contractual obligation of the subcontractor), does the contractor issue a deductive change order to the subcontractor?
W. S. Bellows Construction Corporation
Office: 713.812.2630 Cell: 713.851.4215
We send invoices to our subcontractors on a monthly basis, as needed, and request that they simply pay the backcharge. That way it is a cost to the sub and not a reduction in their revenue. We try to get our PM's to only write change orders for changes in the scope of their work.
Hopefully, they pay the backcharge in a timely manner, and the issue is resolved. It also makes them aware of the cost in a timely manner.
And on our books, there contract amount is still for the full value of the work performed.
Jim Pedigo, CPA
CFO | Crain Construction Inc.
2963 Sidco Drive • Suite 110 • Nashville, TN 37204
Direct: 615.515.8011 | Cell: 615.642-8101
Yes, we issue a deductive change order to the subcontractor.
(614) 734-1470 x 19