Business, Contract, and Project Management Practices
Contract Essentials
A plumbing contract should define scope, price, payment terms, schedule, change order procedure, warranty, insurance, and dispute resolution. Public and private work differ in bonding and payment requirements, but the fundamentals are the same: get it in writing. Change orders must be written and signed before the work is performed, or the contractor risks doing extra work for free. Retainage is money held back until substantial completion and punch list closeout.
Liens, Bonds, and Risk
Mechanics lien rights protect contractors and suppliers who improve property, but the deadlines for notices and filings are short and strict. A bid bond guarantees the contractor will enter the contract; a performance bond guarantees completion; a payment bond protects subcontractors and suppliers. Workers compensation and general liability coverage are contract and legal requirements, and a certificate of insurance is often a condition of getting on site. Safety obligations under OSHA rules belong to the employer, and citations can fall on the contractor even for a subcontractor's acts in some circumstances.
Traps in Questions
- Letting a verbal change order stand without written confirmation.
- Missing a lien or notice deadline because the paperwork waited for final payment.
- Confusing markup and margin, or forgetting that retainage delays cash flow.
- Assuming the critical path is the longest list of tasks rather than the longest dependent chain.
- Ignoring the difference between substantial completion and final completion.
Rule of Thumb
No written change order, no work. If the owner asks for extra work in the field, document it the same day with a description and signature, and price it before starting. A denied claim is far more expensive than a delayed signature.