Paint Business Management, Estimating, Etc.

In a recent article, I discussed change orders, which are usually found in the “Special Conditions” section of the specifications. In an earlier article, I briefly touched on “General” and “Special” conditions, so I thought a review of these sections might be appropriate.

The “General Conditions” section is usually an AIA boilerplate-type section. Once you have read one, you’ve read them all; however, it is good practice to at least scan the section on each project to ensure there have been no changes or additions. The “Special Conditions” are another matter, in that this section refers to terms and conditions that are unique to the particular project. It is necessary to go through this section to acquaint yourself with conditions and/or requirements that might impact your company, and to possibly avoid some costly consequences during the course of the project.

Besides change orders, there are several conditions that can have an impact on you as a subcontractor. One of the first things to look for is “Liquidated Damages.” This is a requirement by owners to help ensure timely completion of their project and to enforce a monetary penalty if it is not done on time. You may be sure that if a project is completed late, and liquidated damages are assessed, you as a subcontractor will be assessed in some proportionate way by the general contractor. This is an instance where documentation and recordkeeping are not only helpful, but vital to protect your interests.

Another important condition to be aware of is “Occupancy Rights.” This condition provides that the owner has the right to occupy some parts of the facility prior to total completion of the project. This condition may or may not imply that acceptance is assumed upon occupancy. The painting contractor, in particular, needs to be aware of which is the case; otherwise he might find himself redoing areas because of occupancy damages.

Still another potentially costly condition to be aware of is “Insurance Requirements.” Some owners, particularly national manufacturing or production facilities, have requirements that are substantially over and above what you might normally carry. These requirements can be, in some cases, quite costly. There may also be provisions such as liability, indemnification, umbrella coverage or hold-harmless clauses that you or your carrier may not want or be able to provide.

These are three examples that potentially can have a major impact on the outcome of the project. There are others as well, that are possibly less consequential but nevertheless can be matters of concern.

It is not only good business practice, but smart to review the “Special Conditions” and know what may or may not affect your costs before you make up your bid. You have to keep in mind that your contract with the general contractor will normally bind you to all of the terms and conditions of the “General” and “Special” conditions as well as your particular scope of work as defined in the plans and specifications.