Ken,
When you have been sub-contracted for a job who’s name should be on the
contract? I will be installing security for an automotive dealership, the security
was included in the bid for the electrical contractor. He has sub-contracted
the security to me, who signs the contracts? The electrical contractor, the
automotive dealership or both.
Bobby
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Answer:
If you can get the subscriber to sign your contract that would be the best
situation. The electrician general contract may not permit that however, or the
subscriber may say he has a contract with the electrician and doesn't have to
sign another contract.
If you were using my standard subcontracting agreement you would see that it
requires both parties to be licensed [assuming a license is required in your
state].
You have to be concerned with your liability exposure. Assuming the
subscriber will not sign a contract directly with you, you can only do the
installation and warranty work. You cannot do monitoring or service because that would
be for the subscriber and you don't have any contract with the subscriber. If
the sub wants monitoring or service it must sign your contracts for that
service. The electrician signs your sales contract.
Make sure you have errors and omissions insurance and that the policy does
not exclude claims if there is no approved contract.
Our electrician friend Scott, better known for denigrating alarm techs,
has really come through this time. His advice regarding subcontracting for
an electrical contractor is right on the money. The contract he refers to,
AIA, is the form recommended by American Institute of Architects, and I
have consistently advised clients that they would be nuts to sign it. That
contract should not be used by a security company. Why? Well, Scott gives
you several reasons below. Others are that in the AIA contract you will be
giving up all of the protection found in the standard alarm contracts
[exculpation, limited liability, etc] and assuming all kinds of liability
for injury, delay, performance, and exposure not just to the owner, but the
general contractor and whatever sub contractor hires you. A dispute could
land you smack in the middle of litigation in federal or state court [or an
even worse fate, the American Arbitration Association, where you will pay
not only for your lawyer, but 3 highly paid arbitrators]. Some of you will
no doubt succumb to your more basic instincts when offered a lucrative
subcontract from an electrician, or owner directly, and required to sign
the AIA contract and abandon your standard alarm/security contract. Just
remember to keep your fingers crossed and perhaps keep in mind one of my
favorite lines from Dante, "Abandon all hope Ye who enter here."
Here are Scott's comments.
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As a licensed electrical contractor we rarely sub-contract work out but
when we do the sub-subcontractor (second tier) signs our contract. A
standard AIA form of subcontract between us and the sub-subcontractor
(alarm, data or CCTV) We will under no circumstances EVER sign a standard
alarm type contract. The terms of the alarm contract are more for a
monitoring / service type agreement, whereas the AIA form is for
construction projects.
I caution the alarm company that the electrician may have sub contracted to
save money. Assuming that the project is a substantial size (hundreds of
thousands) assuming that in all standard subcontracts there is a provision
that states that the contract between the owner and the general contractor
becomes part of the contract between the gc and the electrician, and then
becomes part of the contract between the electrician and it's sub
contractors the small alarm guy may be in for a surprise as to work harmony
(union) provisions, liquidated damages for delay etc. It may be that the
electrician has not even gotten the approval of the gc and the owner and
the architect to subcontract some of it's work, such approvals are
requirements of all owner, gc and subcontractor contracts. The standard
job we do has a subcontract agreement of about a dozen pages, plus riders
for insurance requirements, listing of plans and revisions etc. The
average contract & specifications between the owner, gc and architect is
about 300 to 400 pages. The contract book for the last couple of Office
Depot projects we did were over 400 pages and the electrical, alarm and
data work was almost $500,000. This is for an existing building, tenant
fit out of about 25,000 square feet. The cost for a ground up car
dealership would be more, lots more.
Our contract which included a link to the prime contract required
completion in 56 days, with $10,000 per day in damages for delay
Lastly lets not forget about OSHA safety requirements. A requirement in
every subcontract along with weekly meetings, fall protection devices and
equipment. Does our local alarm guy have the provisions to prepare and
generate CAD generated mylar coordination drawings and overlays for
approval of the other trades (assuming they know he exists ).
A construction project IS VERY DIFFERENT THAN INSTALLING An ADEMCO OR NAPCO
PANEL IN JOES DELI OR THE SMITH RESIDENCE
be careful........
Scott Diamond
Electrical Solutions
Licensed & Union Electrical & Alarm Contractors in NJ, NYC & LI
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