|
Posted by vMike on June 8, 2007, 6:35 pm
> Hi,
> I just started a business as a plumbing contractor and I was
> wondering what the normal procedures on sending in a bid and signing
> whatever needed contracts. Currently, I just looked over the plans
> for the job site and I figured out how much it will cost for materials
> and labor. Now that I have that done, what else needs to be done?
> What is this whole concept of progress payment? I understand you get
> paid for the work progress you make, but do I have to pay for the
> material expenses up front?
>
> The construction company that I'm working with is saying that I have
> to pay for all the materials up front (without getting any money from
> the construction company, either a deposit or funds for the
> materials). Before I entered into this business I assumed that I
> would get paid a deposit and the cost for materials once the materials
> arrive (this is even before I start doing physical work), and the
> progress payment is only pertinent to the amount of physical labor I
> put into it. Is the company trying to take advantage of me since I
> just started out in the business? What are the normal procedures?
>
> I checked online to see how it's done and I couldn't find that much
> information. I found some sample contracts (not about plumbing) and
> there were at least 3 stages to the deal.
>
> 1) Initial deposit
> 2) Cost for materials once the materials arrive (pipes, etc) + any
> damaged materials
> 3) Progress Payment for labor
> (then repeat 2 & 3 if it's a long job).
>
> Is this the normal procedure? If not, how can you protect yourself
> from the construction company from not paying you? I heard of horror
> stories from a friend that's also a plumber who put in $20,000 up
> front into the job (for materials alone, so basically the plumber is
> paying the construction company to work for them), and the contruction
> company never paid the plumber and just used the excuse that the
> company that hired the construction company is stalling their
> payments. In the end, the plumber had to file a lawsuit that can take
> up to 2 years to be settled.
>
> I thought that the construction company is in charge of paying their
> subcontractor whether or not the company that hired the construction
> company is paying them. Is that just an excuse that the construction
> company is using?
>
> Please help me clarify this because I really do not want to fall into
> the "horror" stories you hear about.
>
> So to summarize. Is this the normal procedure:
> 1) Plumber purchases all materials and works for 1 month
> 2) After the month is over, the plumber files in an invoice with the
> construction company
> 3) Then a month later, the construction company pays you for that
> invoice
>
> and the process is repeated?
>
> Thanks a lot. Your help is very much appreciated.
>
> ---Paul
>
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap