Firing a contractor in the middle of a project is like getting a divorce:  it’s ugly, and it’s expensive.  Dishonest contractors know something you might not:  once work commences, your project is no longer desirable for any other contractor.  If you’ve been talking to contractors, just ask them how they would feel about taking over a contract that was stopped in the middle of work from which the previous contractor was fired.  You might be surprised to hear—EVEN IN THIS ECONOMY—what the answers are.  Add to it that most likely if you fire a contractor that you will not feel like paying them as much as they feel is owed to them at that point, so they will likely slap you with a mechanic’s lien and law suit, and you’ll want whoever takes over the project to help your counter-suit by acting as an expert witness for you.  You’re now asking for them to volunteer to be embroiled in a law suit.  Thanks, can I get a side of kick-in-the-teeth with that?  If you manage to get them to agree to pick up the work, do you think they’ll do it for the amount the dishonest contractor bid was, or even their own original price, minus what has already been done (if they bid on the original project)?  NO WAY!  The previous contract was underbid, so that number’s a fantasy, and your project just became the ugly red-headed stepchild, so kiss your visions of bargain-basement costs goodbye.  Think of your situation now as one huge unexpected change order.  Any decent contractor walking into a stopped project that smells of law suit will build a big profit buffer into their pricing, to include re-work of things the other company didn’t do, unknown issues, and enough to cover their time should you decide to subpoena them when your case goes to court.  Most likely you’ll have to accept any price at that point, or go without the work being done, and depending on when the work stops, your home might not be habitable.  You might not have the luxury of bargaining at that point.

On the other hand, if you decide to sue your contractor (or counter-sue them if they sue you for a mechanic’s lien), you will have to hire a lawyer, and most likely you didn’t budget for that, and because many suits are settled out of court, you will have to pay your lawyer for their time.  Beyond that, it will likely take more than a year to get this through to a hearing, so be prepared for a lot of extra prep work for you (i.e. eating into your personal time) and that your project, unless picked up at a premium by another contractor, will remain “on hold” for that year.  On the dishonest contractor’s side of a law suit, many have lawyers on retainer that they need to keep busy anyway, so the law suit you bring will not represent much (if any) additional cost to them, and if it is, it’s likely a tax deduction. In fact, you just gave them something to do as the money they spent on their attorneys is a sunk cost to them.  Beyond the law suit, dishonest contractors know honest contractors hate taking over projects mid-stream, and won’t take on projects that might be involved in litigation unless they are well compensated for it.  Either way, once you decide to sue, your project cost will go from a bargain-basement blue-light special to a private shopper premium quicker than you can say, “Law Suit.”  That is why you should do all you can to vet your contractor before you sign a contract, because you will suffer from litigation, not them.
Just like marriages have prenuptial agreements, construction projects have contracts, but neither makes the process of divorce or termination fun or easy.  The bottom line with choosing a contractor is the same as choosing a spouse:  don’t get involved with anyone with whom you’re not reasonably sure you will go the distance.

There is a saying, (well, it’s more than a “saying” but anyway…) that every Plebe learns at the U.S. Naval Academy, and it goes, “Time, Tide, and Formation wait for no one….”  It’s something that I learned when I was a Plebe, and it has stuck with me throughout my professional life.  Time and tide (or weather) wait for no one; that is self-evident.  Similarly, clients, if they are to be loyal clients, will not wait for slow contractors.  When forced to wait, loyal clients become angry clients.  Here is some general advice on how to approach the important question of time with a contractor.

Time is one of the toughest things for contractors to estimate, so most avoid committing to a time line unless pressed to do so.  There are a lot of reasons for that such as weather, local inspectors’ schedules, and a variety of other legitimate unknowns, but if you sign a contract that does not bind your contractor to some sort of project deadline, you’re asking for a bad surprise.  You may find when you press a contractor on the time issue that they balk, especially if you make them give you a specific deadline or time penalty clause.  I’m not suggesting you can ask a contractor to perfectly predict their project deadline, but time needs to be addressed in the contract, and you need to make sure you’re comfortable with the window of time you agree upon.  Some honest contractors won’t accept deadlines, so you need to be careful not to scare them away because most consumers don’t know to bring it up.  If you love everything else about your contractor, this could be something you soften on in the course of negotiations, but make sure you address it.  Just bringing it up verbally will, at the very least, identify you as a time-sensitive client, and should get you priority attention because you’ve identified the importance of time to your contractor from the start.  There is no panacea for overcoming the time delays inherent in construction, but identifying time as a critical component to your contractor early on should improve your chances significantly to getting the project done in a predictable window of time.

Most contractors can have a reasonable idea of what a typical customer expects, so why do they spec it lower and give you an unreasonably low price?  Two words:  Change Order.  Change orders, while a perfectly legitimate instrument of contract modification, are the dishonest contractors’ tool to bring his profitability up and turn a loss for him into a gain.  I think back to a contractor some friends of mine had used to put an addition onto their home, and how they were shocked when, after the rough-in phase (so, bear studs, wiring, heating ducts, and plumbing, no insulation or drywall), the contractor said, “I’m done.”  Steve (name changed) was beside himself because the work was not done to his expectations, but sure enough, there wasn’t a clearly defined set of specs stipulating where the project ended.  The contractor knew that, so he played him.  You can imagine what Steve’s bargaining power was with that contractor when they sat down to discuss that change order and heard the pricey new cost involved… pretty dirty trick.  Why the change order tactic works for the dishonest contractor is because there is a legitimate additional cost associated with changing things mid-stream compared to doing it differently from the start.  Changes require re-work, ordering new material, slowing down other phases, bringing in different workers, or having to re-do any of the previous work, which translates into legitimate higher costs to the contractor, so you can’t simply use the change order practice or relative steepness in price as a means of spotting a dishonest contractor.  The fact is, change orders are expensive, so avoid them by planning and choosing well before work begins.  And have the discipline not to change things once work is underway.  If you have done enough planning and specified the job right, any changes you make mid-stream should not result in a significant enough gain for your project.  Be confident!  Guard against buyer’s remorse and stick to your original plan.

Without a clear scope of work, you really don’t know what a bid for construction work includes, and the more complex the job, the greater the chance of this unknown factor coming back to bite you. But I would say, if you haven’t discussed the specs, or didn’t understand them, or didn’t probe for more detail, you as the buyer have set yourself up for the fall. It’s amazing that consumers have gotten quite savvy about shopping and negotiating for the purchase of a car than a large renovation project. The former typically involves a much smaller sum of money and yet customers have no bones about negotiating here. Gone are the days people walk onto car lots and look at stickers—if you don’t have the buyer guide report in-hand when you meet a car salesman, you’re living in the 80’s (and I’m not talking about leg warmers and Duran Duran). Why is it, then, that when it comes to remodeling a kitchen, building an addition, or even building a new home, contracts that are $30K – $1M+, all you ever hear is “I found someone to do it for $5K cheaper than the others.” What does that mean? It’s like saying “I got a red car cheaper than a blue car and saved $1,000.” Huh?

Understanding the scope of work is important when looking at different bids because if you blindly trust the contractor will deliver the level of finish and workmanship you expect, their perspective will likely not match yours. Just like you hope to get the level of finish and craftsmanship you want for the least amount possible, your contractor wants to get the project done for the least amount of cost possible to him or her. If you don’t make sure that they understand how you expect it to be done and look once it’s done, then you are leaving yourself wide-open for a big, ugly surprise. It is a rare thing these days that a contractor delivers a project that exceeds expectations. Even honest contractors have a level of finish they need to solve to, and while you might expect them to deliver a sexy Italian sports car, they might build you a Japanese sedan. While both are desirable in their own way, one is much cheaper to do than the other. In fact, I would say that if your expectations were exceeded without reviewing scope of work, it would be plain dumb luck and good for you! Usually, if you haven’t gone over the gritty details and set mutual expectations, it will be unlikely that the contractor will intentionally “wow” you.

Why do some contractors bid work under their cost? What dishonest contractors aren’t telling you is sometimes more important than what they ARE telling you. It’s a negotiation, and their bid was just round one. If you don’t dig into what their bid represents and go a few more rounds, you will lose. Ask what their estimate includes exactly! How much time approximately will it take, what is the price of each component, what kind of quality of materials and labor does this involve?

When bidding out the work, the ultimate goal is to get the project done for the least amount of money in the right amount of time—for both parties. But what are we naturally inclined to do as consumers? We look at the price tag first. How many times have I heard someone tell me that some guy will do the work for $5,000 less than some other guy? To that I always say, “And?” Without a specific Scope of Work, (a.k.a. “Specs”), the comparison between two bids is almost meaningless.

Time and time again I’ve heard contractors say that they undercut other bids to get the work. This occurs often at or under the project’s cost. In other words, they know that they can’t do a good job AND make money on the project unless something changes! I used to ask myself why those contractors did that, and how they could possibly stay afloat. Being a straight-shooter, I had a hard time understanding their reasoning, but over time I’ve come to figure it out. There are a few factors that play in favor of a dishonest contractor that make this practice work for them:

• Unlike honest contractors, dishonest contractors aren’t interested in doing the best job they can in the first place, so the lost profit in pricing a job at-or-below the cost for an honest contractor doesn’t really affect them, because they will use cheaper materials, less skilled workers, and band-aid solutions instead of good craftsmanship. When it comes to bidding, the more important part of a bid is the less clear aspect: the Scope of Work.

• Dishonest contractors count on you to notice sometime after work begins that you want them to do something different, so they know you will have to sign a Change Order.

• If you are solely price-motivated, dishonest contractors know you won’t think to ask about time. They might use your project as a “get around to it” time-filler which allows them to keep their workers and subcontractors busy instead of sending them home for the week. That means unless the contract includes a Project Deadline, you really don’t know when it will get done, and your contractor will not be in any hurry to get it done quickly. What’s worse, they will feel justified because you wanted it done on-the-cheap. Should they be worried that their lack of speed might cause you to fire them or take them to court? No, because of the next secret they know that you might not:

• Once work begins, the tables have turned. If you decide to switch contractors, your project will become a Tainted Project. Dishonest contractors know that there is very little you can do to help yourself once they begin work, no matter how long it takes or how poor a job they do. You will undoubtedly cost yourself more money, time, and stress if you decide to fire or sue them, so dishonest contractors aren’t afraid of law suits or of being fired.

Matt Morse

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