What to get in writing before you mobilize as a subcontractor

Most subcontract problems are baked in before the first machine leaves the yard. The scope was vague, the pay terms were whatever the GC's form said, and nobody asked what happens when the schedule slips. By the time the dispute arrives, the paper that decides it is already signed.

Here is what an excavation or utility sub should have in writing before mobilizing. This is general information, not legal advice. Contract law varies by state, and having a construction attorney review your standard terms once is money well spent.

Scope, and what is not in it

The scope should say exactly what you are doing, by reference to specific plan sheets, spec sections, and bid documents, with their dates or revision numbers. "Sitework per plans" is not a scope. Our page on the scope of work covers what a good one includes.

Exclusions matter just as much. Write down what you are not doing. For dirt work the usual suspects are:

• Rock, with a unit price if it turns up. See our page on the rock clause.
• Removing and replacing unsuitable soil
• Dewatering beyond normal pumping
• Handling and disposing of contaminated soil
• Survey and layout, unless you are providing it
• Testing and inspection fees
• Permits, bonds, and fees you are not carrying
• Restoration beyond what you priced

If it is not excluded, someone will argue it was included.

What's the difference between pay-when-paid and pay-if-paid?

These two clauses sound almost the same and can mean very different things.

• Pay-when-paid is generally treated as a timing clause. The GC pays you within a set time after the owner pays the GC. If the owner never pays, courts in many states still expect the GC to pay you within a reasonable time.
• Pay-if-paid tries to make the owner's payment a condition of yours. If the owner never pays the GC, the GC may never owe you. It shifts the owner's credit risk onto you.

How these clauses are treated varies a lot by state. Some states limit or prohibit pay-if-paid clauses, and many courts want very clear language before they will enforce one. Some states protect a sub's lien or bond rights even where a pay-if-paid clause applies. Know which kind of clause you are signing, and find out how your state treats it.

Get the basics in writing too: when pay applications are due, what backup they need, and how long after approval you get paid.

Retainage

Retainage is money held back from each payment until the job, or your part of it, is done. Find out the percentage, when it gets released, and what triggers the release. Dirt subs are often first on a job, and can be last to see their retainage if it is tied to the whole project finishing. Ask whether yours can be released when your scope is complete and accepted. Some states set rules for retainage, especially on public work.

Backcharges

A backcharge is a deduction the GC takes for work they say they did or paid for on your behalf: cleanup, damage, a repair, or someone else fixing your work. The contract should say:

• You get written notice before any backcharge work is done, with a chance to fix it yourself.
• Backcharges have to be documented with time, material, and photos.
• There is a deadline for the GC to raise them, not months after the fact.

Your own dated photos of the site before and after your work are your best defense against a backcharge you do not owe.

The change order process

On dirt work, the ground changes the job all the time. The contract should say how a change order gets requested, who can approve it, how fast, and how it is priced. Watch for clauses that say no extra work gets paid without prior written approval, then make sure someone on site can actually give that approval when you hit something. Otherwise you end up choosing between stopping the job and doing free work.

Schedule and delays

• When you are expected to start and finish, and what you need from others first: site access, survey stakes, other trades out of the way.
• What happens if the site is not ready when you show up. Idle crews and remobilization should be compensable.
• How weather delays are handled.
• Whether there are liquidated damages, and whether they can flow down to you.

Insurance and indemnity

The GC will ask for certificates of insurance, and often for additional insured status and specific limits. Send the contract's insurance section to your agent before you sign, so you know whether your policy meets it and what it would cost to add anything missing.

Indemnity clauses decide who pays when something goes wrong. Some try to make you responsible even for problems you did not cause. Many states limit how far these clauses can go, but the wording still matters, and it is a good clause to have an attorney read.

Site access and markouts

Put in writing where you can stage equipment and materials, where trucks get in and out, where spoil goes, and who maintains the site roads. Also settle who calls in the markouts, who handles private utilities that the public One Call system will not mark, and what happens if a line turns up that was not marked. Tickets expire, too. Our article on the 811 clock covers keeping them current.

Before you sign

A short list to check before mobilizing:

1. The scope references specific documents, with dates.
2. Exclusions are written, with unit prices for the likely ones.
3. Pay terms, pay application dates, and the type of payment clause are clear.
4. The retainage percentage and release conditions are known.
5. Backcharges require notice and documentation.
6. The change order process is workable on site.
7. Schedule, delay, and remobilization terms are addressed.
8. Your insurance agent has seen the insurance requirements.
9. Site access, staging, and markouts are settled.

TrackOver keeps change orders, photos, and daily records on the job, where they can back up a pay application or answer a backcharge. If you want to try that, sign up free.

Pay terms on paper only help if the invoices go out on time. Our invoicing routine for excavation contractors covers that side.

Common questions

What should a subcontractor get in writing before starting work? The scope with references to specific plans and specs, a list of exclusions, pay terms and the type of payment clause, retainage terms, how backcharges and change orders work, schedule and delay terms, insurance and indemnity requirements, and who handles site access and markouts.

What is the difference between pay-when-paid and pay-if-paid? Pay-when-paid is generally treated as a timing clause, so in many states the GC still has to pay within a reasonable time even if the owner does not. Pay-if-paid tries to make the owner's payment a condition of yours. How these clauses are treated varies a lot by state, and some states limit or prohibit pay-if-paid. This is general information, not legal advice.

What exclusions should an excavation subcontractor list? Rock, with a unit price if it turns up, unsuitable soil, dewatering beyond normal pumping, contaminated soil, survey and layout, testing fees, permits and bonds you are not carrying, and restoration beyond what you priced.

How can a subcontractor protect against backcharges? Require written notice before any backcharge work so you can fix the problem yourself, require documentation with time, material, and photos, set a deadline for raising them, and keep your own dated before and after photos.