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We are subcontracted by the general contractor on a job for materials. We then sub-subcontracted the installation to another company.

FloridaDefects Payment Disputes

We are subcontracted by the general contractor on a job for materials. We then sub-subcontracted the installation to another company. The company we sub-subcontracted to did a very poor job and refuses to do anything about it. Is there anything we can do at this point? We have invoiced the sub-sub for replacement steel panels, etc. however, they refuse to pay.

1 reply

Mar 23, 2020

The contract between a subcontractor and a sub-subcontractor should usually set the stage for how issues with workmanship should be handled. Often, the agreement will designate specific steps - like notifying the sub-sub, creating a timeframe for when repairs must be made, and how to handle the financial aspects of the repair. Even if the contract is silent on that front, though, a sub isn't out of luck when their sub-sub does shoddy work. Levelset discusses that here: An Implied Good Workmanship Warranty Exists for ALL Construction Work. Ultimately, before taking any specific action, it might be worthwhile to reach out to the customer to try and resolve the issue. And, simply threatening to use one of the options described below could be enough to get them to repair their work.

Forcing a subcontractor to perform repairs

It can be hard to force a sub-subcontractor to perform repairs when they're being unreasonable. Again, before taking any action, it's important to refer back to the contract to make sure all necessary procedures are followed or to see what kinds of tools might be outlined there for forcing them to return to the job. With that being said, the most common tool used to force repairs is withholding payment - whether that be directly from an invoice or simply kept from retainage. And, if payment hasn't been fully released to a sub-subcontractor, threatening to withhold pay from the next invoice, or threatening to keep retainage funds in order to pay for repairs, might move talks in the right direction. Note, though, that withholding payment is an extremely common source of payment disputes - even when there are questions about the quality of the work performed. Alternatively, fixing the work yourself or bringing someone else in to repair the work might be an option if the sub-subcontractor won't listen to reason. And, back charging a sub-sub for their faulty work could serve to pay for that expense (though, practicaly, that might not be all that different from the invoice you described above). Plus, if payment was made by check or direct deposit, performing a chargeback directly through your bank to recover some of those funds might be an option, too.

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