Back charge allocation
It is the practice of many GC’s to back charge the same amount to multiple subs. We perform new construction cleaning of multi-family apartments. We generally are requested to re-clean an area, a building, or an apartment through a change order. For example, the change order to complete the work is $1,000 which we get paid when the work is completed. The GC then back charges the $1,000 plus a 15% administrative cost to all the subcontractors responsible for the extra cleaning. This amount could be many times the GC’s actual cost. Is this practice common and proper? It appears to me that this is fraudulent. Shouldn’t the back charge be divided among the subs responsible rather then each paying the entire cost of the back charge?