After the Owner Signs the Contract

Some general contractors will try to renegotiate a subcontractor’s contract amount, after you sign the contract and before signing a contract with the sub. Generals do this to ‘squeeze’ a little more profit out of the initial contract. While you can argue whether this practice is ethical, it isn’t illegal.

However, this tactic can have another effect. Often subcontractors who suffer this tactic have to find ways to reduce cost in order to make a money. Unfortunately, this often means the project quality suffers through the methods discussed in Bidding – Improper Contractor Shortcuts.

Reviewing bids, as discussed in Bidding – Reviewing and Analyzing Bids, helps ensure that any contractor savings don’t end up costing you in the long run.

Now that you’ve selected the winning bidder and let them know that they have won, take the budget you prepared while planning the project and set it aside. You now need to create a new project budget using the bid costs provided to you by the winning contractor or contractors, if you have multiple trades.

This step ensures that you are managing the project using a budget based on the agreed amounts.

Use the Project Budget Form to total up and track all your contracted project costs.