Another fairy tale becoming quite popular among general contractors is the contractual requirement for subcontractors to coordinate all aspects of their work with the work of all other subcontractors, including but not limited to contract work, design changes, inspections, constraints, and change order work. The requirement to coordinate also carries with it a requirement for subcontractors to work out back charges between one another. What work or risk does this leave the general contractor or so-called construction manager?

Dumping Grounds

Monday morning 8:00 a.m. all subcontractors attend the GC sponsored subcontractor coordination meeting where all the subs talk about their plans for the week, and how others trades are impacting or delaying their work. Each delay issue is recorded in a software constraint log that all subcontractors have access to. In addition to the constraint log, the GC has setup access for all subs to view all design changes, RFIs, inspection reports, and schedule updates.

In other words, GCs are dumping critical project information into a variety of software solutions leaving subcontractors to fight it out, while giving general contractors the perfect excuse for just about any issue and that is, “if you would have coordinated the work as contracted you wouldn’t have had this problem, or lost this money.”

Get Out of Jail

The contract requirement for subcontractors to “coordinate the work,” is a get-out-of-jail-free card for general contractors and is being used more and more. What’s important to understand is the bucket list of issues a general contractor will argue is your fault because you didn’t coordinate the work. Here are a few:

• Out of sequence work
• Trade stacking
• Remobilization
• Delays
• Trade damage
• Claims
• Punch list work

In every one of these cases, the general contractor can argue “had you coordinated the work properly none of these things would be issues.” As well, and according to some contract coordination language the general contractor can argue, “it is your responsibility to collect damages from the trade(s) that damaged you.”

Cost of Coordinating the Work

How much is it costing you to coordinate? Have you noticed that your supervision and project management budget on jobs exceeds your estimate at the end of the job? In other words, is it costing you more to manage a project today than it did 10 years ago? Could it be that your field supervisors and project managers are doing the general contractors job without realizing it? Are you getting paid for coordinating the work?

Coordination Risks

Contracts between the owner and general contractor usually indicate that the general contractor is primarily responsible to coordinate the work. Contracts between general contractors and subcontractors require each subcontractor to coordinate its work with the work of “all” other subcontractors. What this requirement really does in essence is turn subcontractors against one another and relieve the general contractor of the risks associated with poor coordination.

Combating the Coordination Requirement

One of the ways in which subcontractors can overcome the risks associated with the coordination requirement is to utilize the agreed upon schedule as a counter measure. In most cases, on jobs where general contractors create dumping grounds of information and make subcontractors solely responsible for coordination of the work, you will find jobs out of control. When a job is out of control you will also find a schedule out of control.

When the schedule is out of control, the general contractor will tell you that the reason it’s out of control is because you’re not coordinating your work with the work of other trades. The question then becomes, “can you prove that you tried to coordinate the work with the work of other trades?” If you have tried without success, it’s time you send the general contractor a “cost impact notice,” related to the issue.

In the cost notice impact letter, you might say, “We have made every effort to coordinate our work in compliance with our subcontract, however, we are notifying you of schedule cost impacts as a result of schedule deviations.”

Understand that most contracts give the general contractor full and final authority to modify the agreed upon schedule at any time for any reason. However, what most subcontractors don’t utilize is their right to charge for schedule changes or deviations from the agreed upon schedule.

There are other ways to guard against coordination requirements, including but not limited to how you qualify your proposal and get those qualifications in your subcontract.

Owners Don’t Know

Owners don’t understand that although they are paying the general contractor for coordinating all of the work; the general contractor in turn is making all subcontractors responsible for coordinating the work and that is not what the owner paid for.

Before an owner awards a job to a general contractor, they should read the general contractor’s subcontract forms to determine what the general contractor is not doing, and the potential consequences to the owner and the project overall.