Construction firms and general contractors often work with subcontractors. Instead of hiring full-time employees for niche services, such as grout work or drywall finishing, hiring outside professionals on demand can be a much more cost-effective solution.
However, the risk of poor project outcomes requires careful consideration. General contractors and construction company owners typically need to clarify their expectations in their contracts with subcontractors.
How can they hold subcontractors accountable if the work they perform does not meet expectations for the project?
Withholding pay
It is common practice to wait to settle final invoices until after inspecting the finished work. Withholding payment for final invoices until subcontractors correct their work can convince them to redo the work. However, there is always the risk of the subcontractors seeking a lien, which could cause issues with the property owner.
Filing a lawsuit
When the final outcome of the project clearly does not meet the standards outlined in the contract or adhere to building code requirements, it may be possible to take legal action to hold the contractor responsible. A judge’s order of specific performance could compel a subcontractor to correct prior work so that it meets the client’s specifications or conforms to current building standards.
The drawback to this approach is the extended timeline for litigation. There is also the possibility of the client being unsatisfied until the correction of the poor work is completed.
Including the right provisions in contracts and initiating litigation when outside parties do not satisfactorily contribute to a construction project can help companies meet client expectations. Management of subcontractor disputes can be one of the more challenging aspects of running a successful construction company.
