A construction contract reviewer explains why contractors lose money: their change orders and payment applications don't meet documentation requirements, even when the actual work is solid. Poor paperwork forces rejections that strain finances and sometimes put companies out of business.
Chapters
One of the things I started to notice being client side was that contractors and subcontractors were losing money all the time and going out of business. And I was on the dark side, I would say. It was me receiving people's change orders and rejecting them, me receiving payment applications and rejecting them. But the thing was that they didn't understand the documentation that they were giving me was so poor and they didn't understand that I'd have to take this documentation, turn around and present it internally. And so what I would do is essentially, you know, well, no, I'm not. That's terrible. Like, you've not complied with the contract, I can't pay you, basically. So many of these guys were so good on site, but their paperwork was so bad.