May 11, 2016
Read through the contract.
Most companies will want you to sign a contract, locking you into their service for a given amount of time. However, you need recourse if you aren’t happy with the service that the company is providing. For example, you may want to look for a company that has a trial period or one that goes on a month-to-month contract rather than a yearly contract. The information below summarizes an article by George Hedley that outlines 9 steps to follow before signing a contract. While these steps are worth keeping in mind, we at DCS Global Enterprise aid all our clients in properly reviewing contracts and ensuring that all terms correspond with the intentions and wishes of all parties involved. After all, a contract should be the beginning of an efficient and effective relationship between your business and your commercial cleaning company.
Business is risky enough without contractual unknowns. Lower your risk by using this basic checklist for reviewing a contract.
Often times, general contractors and subcontractors are so excited to get a new job they will sign any contract put in front of them. Most contracts are never awarded until the last minute. This often occurs the day before you’re needed out on the jobsite. Pressure is on to get started and sign the contract as fast as possible before you have adequate time to read it. But contractors must take the time and effort to review every contract before signing them.
For every project, large and small, go through each step in the following checklist before putting your pen to paper and celebrating a new job.
CONTRACT SIGNING CHECKLIST
1. REVIEW YOUR BID
Before gearing up to start or hire work, review your bid carefully. Have your bookkeeper check the math. Have a qualified person check the labor and equipment figures. Call your major suppliers and subcontractors to confirm their bids. If all looks good, go on to the next step.
2. REVIEW COMPLETE PLANS
Subcontractors don’t often get to see the complete set of plans when asked to submit their bids. Before signing a contract, review ALL plans and project documents. NEVER – NEVER – NEVER sign a contract without reviewing the complete set of plans.
3. REVIEW ALL SPECIFICATIONS
It is imperative to review ALL specification sections before you sign a contract, even if they don’t seem pertinent.
4. HAVE ALL PARTIES INVOLVED VISIT THE JOBSITE
Always send involved parties to the jobsite to look for any unforeseen conditions, conflicts with the project plans and logistic concerns that can cause you grief later. Every job looks different in person than it does on paper.
5. REVIEW THE JOB SCHEDULE
Before committing to any project, make sure all those involved completely understand and agree with the project schedule. Lost job profits generally can be attributed to improper scheduling of crews, poor supervision and lack of field coordination. And a schedule that’s too optimistic will result in a crunch at the end of the project which costs everyone money.
6. COMPLETE A PROJECT CHECKLIST
When reviewing contracts, use this simple project checklist so you and your project team won’t overlook any important items. On the list be sure to include:
· Scope of work, inclusions & exclusions
· Insurance requirements
· Bonding requirements
· Payment procedures & cash flow requirements
· Person(s) authorized to approve field changes, etc.
· Project schedule & long lead items
· Meetings required to attend
· Permit requirements
· Site access, logistics & parking
· Special tools & equipment requirements
· Contract close-out procedures
7. VERIFY PROJECT FUNDING
Ensure there is proper and adequate funding.
8. READ COMPLETE CONTRACT
Signing a contract prepared by someone else can be scary. The days of a handshake contract are long gone. Today, CONTRACTING Is About CONTRACTS! If you don’t understand what you are signing, you won’t stay in business very long. Many contracts contain clauses that are one-sided and unfair.
Carefully look over contract clauses dealing with such issues as:
· Payment, retention & pay when paid
· Authorizations, notices, approvals & administration
· Conflict resolution and disputes
· Arbitration vs. court
· Schedule issues:
– Failure to perform
– Delays and weather
– Acceleration & termination
– Liquidated damages
· Change orders & back-charges
· Cleanup & supervision
List out the most important “red-flag” clauses to look for and decide what you will and will not sign. Remember, you have the right to sign only what you agree with. Never sign an unfair contract. Cross out and change what you don’t agree with, initial the changes & then sign the contract.
9. EXECUTE CONTRACT ONLY IF YOU UNDERSTAND IT AND FEEL COMFORTABLE MOVING FORWARD
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