Running the Business · Part 2
Subbing to general contractors: how to get on the list, what they check, and the four clauses in the subcontract that matter
Subcontracting to general contractors is the steadiest early work a C-36 can get and the easiest to lose money on. The GC will check your license, your insurance, and your references before you get on the list, and then hand you a subcontract written by their lawyer. This lesson explains what the GC is actually checking, how to get onto the bid list, and the four clauses in every subcontract to read before signing: payment timing, which California law already regulates in your favor; retention; indemnity, which the law limits on residential work; and scope, which the law does not protect you from at all.
What the full lesson covers
- Before a GC puts you on the list they verify the license on CSLB's lookup, demand a certificate of insurance with additional-insured and waiver endorsements, and call two references. Have all three ready before the first conversation.
- Payment: B&P 7108.5 requires the GC to pay you within seven days of receiving each progress payment, with a 2 percent per month penalty and attorney's fees if they do not, and lets them withhold only 150 percent of a genuinely disputed amount. A "pay-if-paid" clause that makes owner payment a condition of yours is unenforceable in California.
- Retention of 5 to 10 percent held to the end of the whole project is normal on commercial work; price it, and know when the GC must release it.
- Indemnity: on residential work under a contract signed after January 1, 2009, the GC cannot make you indemnify them for their own negligence, their design, or work outside your scope (Civil Code 2782(d)). Strike anything broader.
- Scope is the clause that loses money. "All plumbing per plans and specs" means every fixture in the addendum you did not read. Attach your own scope sheet with exclusions to every subcontract.
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More lessons in Getting Work
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- 2Supply-house relationships and credit: the account, the terms, the personal guarantee, and the notice your supplier sends your customer
- 3Subbing to general contractors: how to get on the list, what they check, and the four clauses in the subcontract that matterYou are here
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- 6Advertising law for a licensed contractor: the number on every ad and the van, the word you can never use, and what a misleading ad costs
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- 9Estimate vs. quote vs. bid: the legal difference, and the moment a number becomes a contract
- 10Public works: DIR registration, prevailing wage, certified payroll, and apprentices. A separate world; know it before you bid
- 11Template: the estimate worksheet, blank and worked
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