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Navigating Construction Cleanup

19 Feb 2016

Navigating Construction Cleanup

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For building service contractors (BSCs) looking to grow their businesses, construction cleanup can be the single fastest means to growth—or the end of it.

To successfully navigate these opportunities, BSCs need to consider the following:

Insurance coverage: Many businesses will require a BSC to hold US$10 million in liability coverage before considering the contractor as a viable option. Achieving this threshold may require landing smaller builders and projects. Requirements vary based on state and city requirements. Lower levels of insurance may be negotiable.

Payroll: Some construction projects require carrying payroll with the company for up to one year before BSCs are paid.

Retainage: A common consideration, construction companies may request to hold 10 percent of the vendor fee for 12 months to ensure quality and viability. In construction cleanup, we would all agree this is not applicable. However, the construction company will often try to apply retainage across the board to all types of vendors. BSCs should attempt to negotiate this out of the contract.

Frequency and walk-throughs: Upon construction completion, a lot of ambient dust can remain in the structure’s atmosphere. Left undisturbed, dust often takes 12 hours to settle. So, if cleaning was performed on new construction at 9:00 p.m., it may look like it wasn’t cleaned by 9:00 a.m. the following day. To avoid this, it is important to set realistic expectations by interacting with the project manager and performing a walk-through. If necessary, require a sign-off when services are complete. In some cases, a room may be sealed with tape or a poly tarp to keep it clean. For larger projects, some construction companies request the BSC to provide day labor to remove trash and facilitate clean up.

Punch lists: It’s common for other vendors—electrician, drywall, etc.—to receive a list of smaller items to complete or add to their services. This is called a “punch list.” It’s up to the BSC to decide what services to include and what services should render additional billings. For example, when an electrician wires and installs a new outlet, they may have to cut into drywall. In doing so, they’re required to clean up the debris. And, as I’m sure you can imagine, sometimes this is done, and sometimes it’s not. If the cleaners are called back to clean up the mess, the BSC may want to charge for that service.

After all of the previous considerations are looked at, there are still pros and cons to performing construction cleanup.

Pro: If a good job is done, repeat business may become more available as well as the opportunity to negotiate terms.

Con: Timing can be a challenge. Construction rarely ends as scheduled and time to perform cleaning is often far less than originally agreed upon.

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