All in Agreement
Who's Looking Out For You?
The best way to find out if an owner or GC really cares about one's success is to send him a bill for more than the contract amount. Try sending him a bill for delaying the job or for out-of-sequence work. One will know the honeymoon is over when you send him a bill for interest on past due payments and retention. Consider the fact that there is no marriage to the GC or owner but married to the contract signed. So, who is looking out for you?
Walls and Ceilings' Editor Nick Moretti contacted me and explained that the American Subcontractors Association wanted to talk to me about some of the negative comments I've made about associations who take our membership money but don't give us what we want.
I called the ASA and talked about the association's concerns. In so many words, I was told that I should focus on the ASA's successes and that I had made it appear the ASA was not looking out for the best interest of subcontractors.
Specialty Trade Contractors Praise
Oregon's Anti-Indemnity Law
ASA believes that closing loopholes, which give contractors immunity from the consequences of their actions, will improve the protection of the public and the insurance climate for the construction industry. Contractors will have more incentives to act responsibly because they will have to pay for losses that they negligently cause, rather than making other parties pay for their own mistakes.
ASA Celebrates Win in Wisconsin Supreme Court Insurance Decision
A January 9, 2004, decision by the Wisconsin Supreme Court, holding that standard commercial general liability policies cover accidents caused by defective construction, is a victory for construction contractors and for ASA, which filed an amicus curiae (friend of the court) brief in the case early last year. ASA expects the decision to clarify the legal obligations of insurers to contractors that purchase CGL policies.
Tools Designed for the Subcontractor
ASA has developed resources to help you identify ways to more efficiently and less expensively manage risk and fight inappropriate risk transfer. ASA's subcontractors transfer of risk action plan is the cornerstone of this effort.
Payment Advocacy PAY!
ASA has declared 2003 "Payment Advocacy Year," or PAY! As part of this campaign, ASA is making resources available to help improve payment practices in the construction industry.
ASA Subcontract Addendum
ASA developed a contract addendum, which you simply make part of your subcontract. The addendum modifies your subcontract and I must say it does a great job of it. It includes a stop work provision, which allows you to stop work if you are not paid. This addendum brings balance back to subcontracting and allocates risk fairly between the parties. Call or e-mail ASA for a copy and tell them you read about it here.
Talking turkeyWhen you consider that the ASA has a staff of 13 people, I must concede they are doing a pretty good job. Yet, how can a staff of 13 with membership fees of only $360 per year, compete with the big boys, such as the Associated General Contractors of America?
"Risk shifting is on the increase rather than the decrease and subcontractors are taking the majority of the risk," says ASA Communications Director David Mendes. I asked Mendes if he would rather be a GC or subcontractor and he replied that he had never been either. Good answer!
"The ASA is committed to its goal of fighting for fair subcontract language," he says. "It's going to be an ongoing effort."
Is the ASA trying? Yes. Has it had some success? Yes. Will it succeed in getting fair subcontract language in my lifetime? I think the ASA will continue to have some successes but I don't think that it will win the fight until it understands that subcontractors want fair contracts now.
The ASA has about 5,500 members as compared to the AGC, which has roughly 33,000 members. The ASA is simply out-numbered and out-financed, in my opinion. The AGC has proudly announced that it "... has never been stronger and continues to increase its power and influence on Capitol Hill." In my opinion, the greatest advantage the ASA has is the truth. The truth is that subcontracts are unfair, and our courts and legislators should easily recognize this if the truth is constantly put in front of them.
"I am not in a position to evaluate AGC's own public statement about its increasing power and influence on Capitol Hill," Mendes says. "It is not valid to evaluate relative influence by comparing the sizes of association memberships. Indeed, there are influential associations that have fewer than 20 members."
This is where David and I disagree. I believe size does matter. As well, I don't believe an organization, like the ASA, can afford the luxury of diversifying its focus on several different objectives. In my simplistic view, I believe the focus of the ASA should be on fair contracts for subcontractors and nothing more. Once that objective is achieved nationally, then move on to the other stuff.
What subcontractors wantThe ASA must understand what subcontractors DO NOT WANT:
• Unfair payment language
• Unfair insurance language
• To insure owners and GCs, nor do we want to defend them for free
• To be named in a claim for which we have no responsibility
• To perform extra work without payment guarantee
• To perform work out of sequence
• To be bound by unreasonable schedule language
• The owner or GC to have an unfair contractual advantage
• To be tied to the contract between the owner and GC
Years ago, I received a subcontract from a GC who had obviously spent a lot of money developing it. It was terribly one-sided. It was so one-sided that I decided to add the following sentence at the end of each paragraph: "The same shall apply to subcontractor." I sent it back to the GC unsigned and asked them to sign it first as submitted.
They refused, saying that I couldn't have all the same rights that they had. I wondered why and then it dawned on me. This GC didn't want a subcontractor, he wanted a slave. Those are harsh words; yet, compare the contract rights you have to the rights of the owner and GC. Maybe GCs and owners don't understand what the word "fair" means. It means, just to all parties having or exhibiting a disposition that is free of favoritism or bias. In other words, subcontractors want to be protected to the same extent the owner and GC are protected. I could say it in four words: We want fair subcontracts.
A turkey's lifeIn late March, two people in our office, Dave and Jeff, had been talking about turkey hunting, which opened April 15 in Washington State. They worked themselves into a frenzy talking about opening day and the hunt. Obviously, they had got me thinking, talking and writing turkey.
I envision turkeys enjoying life, just pecking, scratching and gobbling up a storm until the day before Thanksgiving when some guy in rubber boots arrives carrying a sharp, chrome plated ax. Although the ASA is working on behalf of subcontractors, subcontractors must continue to watch out for themselves, as well as apply the resources suggested by the ASA.
If one signs enough unfair contracts, he'll find out what it's like to be a turkey the day before Thanksgiving. One good whack from the man in the rubber boots and he's watching his body run around his head. Check out the ASA's Web site at www.asaonline.com. It's a little difficult to navigate but the site has some excellent resources and most (not all) is free.
Remember: Teamwork begins with a fair contract. W&C
Pete Battisti has been in the commercial drywall business for 20 years.
"All in Agreement" articles are reviewed by Kerry Lawrence, an attorney for more than 20 years specializing in construction.