Main contractors hire closeout teams in the final quarter to recoup costs by scrutinizing subcontractor contracts and withholding or clawing back payments using delay and change clauses. One client lost funds this way. Subcontractors need meticulous paperwork from day one to protect themselves.
Chapters
If you're a subcontractor, you need to know about what a closeout team is in construction. So in the last quarter of a construction project, a closeout team, which is a team for the main contractor designed to save costs on a project. So the last quarter of the project, they're probably over budget. They need to recoup some costs so that they can make money. And so they're coming into the project to essentially not pay subcontractors for what they deem is not appropriate to pay for. That's when they take out the contract that you've probably not looked at this whole time. And they say, well, you've not complied with this delay clause, you've not complied with this change clause, and therefore we're not paying you for delays and for claims. We've had this happen to one of our clients where they had already been paid, and because there was a term in the contract that says, you know, it's payment on account, they said, well, actually, we incorrectly paid you for changes where you didn't comply with the contract. And these closeout teams are vicious. And so the best way to get around that is making sure that you're on top of your paperwork from day one.