When to fire contractors

3 Replies

For those that have fired contractors, what was your breaking point? Particularly when dealing with a contractor who is late starting (or finishing) a job - it often feels like a rock and a hard place. Options are to fire them, and deal with the downtime of locating and scheduling a new contractor, or try and make the best of a bad situation with current contractor. What have you done?

Did you have a "Time is of the essence" clause in the contract with a penalty for finishing beyond the specified date?

If they are not dragging on to long and are doing satisfactory work it might be better to let them finish this project and select a different contractor for the next. Your holding costs will eat away at your profit if the next contractor can't start for a couple of weeks.

You could fire this guy and out of spite he places a mechanics lien on your property to screw with you and delays your ability to sell the property until you can clear it up.

@Thomas Fortune

I fire contractors if we simply don't get along or if I don't think they'll be able to finish the project. Sometimes you can tell when someone is defeated and it'd better to cut your loses and move on.

I have something similar to what @Jeff B. mentioned that I add to my contracts. After I get their bid and proposed finish date I add that, for every day before their projected finish date, I'll pay them an extra $100. For every day after their finish date I pay them $100 less. Gives them incentive on both ends to finish early, and so far I've never had to pay out the extra $100 once.

your contract should have a start date, pay schedule, termination clauses and liquidated damages for delays.

I just went through a termination. The contractor was asking for draws on work that was not complete, they fell four months behind schedule. I did not pay for incomplete work, I put them on notice that I was supplementing the work force, I had to put material on the project and deducted from the contract. After a few weeks they left the project. I gave them 72 hours to remobilize, or they were effectively terminated. I completed the project and had another GC pull a new permit for the final inspection.

If I wanted to pursue it, they are liable for the project overages and liquidated damages.

Keep projects well documented.

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