In the construction world, Shawmut Design & Construction is a powerhouse, with 10 branches that stretch coast to coast across the US. For subcontractors, winning a contract with a large general contractor like Shawmut can feel like winning the lottery. However, in an industry filled with extreme cash flow challenges, it’s important for subcontractors to understand the payment challenges ahead, and what they can do to get paid faster. This is a subcontractor’s guide to working with Shawmut Construction — and resources to help them get paid faster on every job.
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About Shawmut Construction
Shawmut Construction is a major general contractor in the United States with 10 branches that stretch coast to coast. With headquarters in Boston, MA, Shawmut Construction holds construction management offices in:
- Chicago, IL
- Irvine, CA
- Las Vegas, NV
- Los Angeles, CA
- Miami, FL
- New York, NY
- North Haven, CT
- Providence, RI
- Springfield, MA
Throughout the country, Shawmut Construction designs and builds a variety of facilities, such as academic buildings, corporate/commercial facilities, sports venues, healthcare facilities, luxury homes, and more.
Before working with Shawmut
There are a number of tools and strategies that subcontractors can use to get paid on time – one critical step is to prequalify the general contractor before you sign a contract. A good prequalification process will include looking at their recent payment performance, and hearing from other subcontractors who have worked with them.
According to Shawmut Construction’s Payment Profile, the GC has a “Low” payment score and has been subject to at least 63 reported instances of slow payment.
Overall, subcontractors give Shawmut a rating of 3.2 out of 5 stars, with wildly mixed reviews.
One subcontractor gave the GC a 1-star review, saying “Had to file a lien on a job where Shawmut Design and Construction was the general contractor. It’s not fun.”
A 4-star reviewer reported a different experience, saying that Shawmut “typically pays on time and within the natural rhythm of the job. When there are issues they come up with a plan and take care of their subs.”
Of course, payment problems aren’t always the fault of the GC. However, they are responsible for managing payments on the project, and ensuring that everyone gets paid on time. According to a staff member from the accounts payable department in Shawmut’s Boston office, payment problems aren’t typically their fault. “It happens when the subcontractor doesn’t pay the supplier, and then the supplier comes [after] us.”
“If subs have everything approved in our system, it’s automatic and there’s no need to check back with us on payment,” the staff member said. “As soon as we get a payment from an owner within ten or fifteen days, which can depend on the owner, we will make a payment to the subcontractor.”
Recent payment disputes
While Shawmut Construction is currently faced with at least $200K in unpaid construction debt, the company speaks highly of their working relationship with their subs and for their prompt payment. As stated on Shawmut’s Subcontractor Information page, “Subcontractors prefer to work with us because there is predictability in trade scheduling and they know they will be paid promptly. We are able to successfully complete projects anywhere in the country because of our excellent relationship with a national network of subcontractors.”
As of June 29, 2020, the GC is facing at least three mechanics lien claims filed against them in both California and Florida, totaling $200,744.96 in unpaid construction work to three different subs.
$140k+ claims in California
Back on December 9, 2019, subcontractor Metro Mechanical, Inc. filed a lien valued at $123,383.28 against Shawmut Construction. The project consisted of a six-story office building in Santa Clara. According to the lien affidavit processed with the Santa Clara County clerk’s office, Metro Mechanical provided the entire HVAC installation.
The latest known lien claim filed against GC Shawmut Construction was from Kone, Inc. on June 29, 2020. The subcontractor claims they are still owed a total of $20,924.25 from Shawmut Construction for work taking place at the Silver Lake Pool & Inn located at 4141 Santa Monica Blvd, Los Angeles, CA.
According to the lien processed with the Los Angeles County clerk’s office, the sub constructed the elevators and escalators for the luxury inn. The inn reportedly includes 54 rooms with layouts that range from 250 square feet to 1,440 square feet in size.
$50k claim in Florida
As of June 1, 2020, Future Interior, Inc. is still owed a total of $56,437.43 from Shawmut Construction for a project at the Surf Club Apartments in Surfside, FL.Located nearly 14 miles from downtown Miami, FL, the project consisted of 150 new residencies that range from 1,800 square feet to 7,800 square feet. The lien was processed by the Miami-Dade County clerk’s office.
Shawmut’s Payment Process for Subcontractors
On Shawmut’s page for subcontractors, the GC publishes a number of documents and guides intended to help their subs and suppliers get paid on time.
In the GC’s PDF guide, 9 Essential Steps to Getting Paid by Shawmut, they outline a variety of ways in which subs can reportedly earn their pay quickly. The document states that Shawmut Construction looks to “pay you in a timely fashion.” They suggest that subs can expedite the payment process by having their outlined documents completed and submitted by the 20th of each month.
In addition, their Application for Payment Procedure provides a checklist of steps required to get paid before, during, and after a job.
In order to be qualified to work with Shawmut Construction, you must submit the following:
- Letter from your surety company with a per project and per aggregate bonding capacity
- The two most recent years of audited financial statements
- Letter from your insurance agent or NCCI with your past 3 years experience modification rating (EMR)
- Copies of your most recent safety manual/program and/or quality assurance/quality control program
- A sample insurance certificate
- Correspondence pertaining to your line of credit i.e., banking institution, amount of line of credit, and outstanding borrowings as of the date of the correspondence
Shawmut requires subs to meet specific insurance requirements. These documents should be sent to:
Shawmut Design and Construction
Risk Management – Partner Insurance
560 Harrison Avenue
Boston, MA 02118
Before the job begins
The following documents should be sent to the Project Administrator on your particular job:
- Contract (view sample)
- Bonds (as required by the project)
- Proof of insurance
Applying for your first payment
A major part of getting paid on time during a project is providing complete and accurate payment applications. Shawmut uses AIA billing forms, e.g. the G702 Application for Payment and the G703 Continuation Sheet. If you fail to fully complete the documents, Shawmut states, “you will be paid in the billing cycle following the receipt of the proper documents.”
These documents will be required for your initial payment request, sent to email@example.com:
- Payment Application (due by the 20th of the month)
- Partial lien waiver
- Proof of applicable Sales and Use Tax Regulations (e.g. State Registration Certificate, etc.) – required if working outside of your home state
In addition, subcontractors must supply a fully executed Lien Grid to the Project Administrator, listing all subcontractors and suppliers that you are hiring for the job.
Applying for progress payments
Shawmut requires these documents for each subsequent progress payment request:
- Payment Application (due by the 20th of the month) with partial lien waiver
- 2nd-tier partial unconditional lien waivers signed by each of your subs and suppliers, sent to Project Administrator
Note: The 2nd-tier lien waiver document that Shawmut provides is an unconditional lien waiver, which waives lien rights whether or not payment has actually been received. It is highly recommended that a construction lawyer reviews this and any other documents you provide in application for payment.
Applying for final payment
- Final Payment Application with final lien waiver
- 2nd-tier final unconditional lien waivers signed by each of your subs and suppliers, sent to Project Administrator
- O&M materials / close-out documents (Warranty Letter, Product Data, As-Builts)
3 Subcontractor Tips to Get Paid on Shawmut Projects
Working with any GC can potentially lead to a slow payment or even non-payment, which makes Shawmut Construction on different than most.
Here are three tips for subs to use when looking to get paid on not just Shawmut Construction projects, but most construction projects in general
Send preliminary notices
Sending a preliminary notice on every job will ensure that your company is known on the job site when submitted at the beginning of a project. Preliminary notices are used to inform the GC and property owner of a sub’s work on the project.
Many states require subs and suppliers to send a preliminary notice in order to preserve their right to file a mechanics lien if they don’t receive payment. Sending a preliminary notice is a best practice on every project. Given the information about Shawmut Construction’s recent lien cases, it may be a particularly good idea on any projects when Shawmut is involved.
Carefully review lien waivers
As you wonder if you should sign a lien waiver, especially on Shawmut jobs, it is important that you carefully read the language listed in the lien waivers when agreeing to an unconditional lien waiver. Always have a construction lawyer review contracts and lien waivers before you sign them, to ensure you know exactly what you’re agreeing to!
File a lien if you aren’t paid
Subs should always stay mindful of their mechanics lien window to file a claim. In some cases, GCs may continuously promise payment, keeping subs and suppliers on their toes while they do not make a motion to file a lien. There are also lien deadlines by to file by every state, which must be considered on every job you work on.