The subcontract scope review: what to settle before you sign

A subcontract arrives as an email attachment on a Tuesday, and the GC wants it back before the preconstruction meeting on Thursday. You already won the job. The number is agreed. Signing feels like paperwork.

It is the last hour in the whole job where a sentence costs you nothing to change.

Every argument you will have on this project between now and retainage is, in some form, already decided in that PDF: whether the extra conduit gets paid, how many days you have to say so, what your markup is allowed to be, when you can bill, and how much of your money the GC holds until a year after you finished. None of that is negotiable in month seven. All of it is negotiable on Tuesday.

Not legal advice, and not the whole contract

This article is the operational half of the read: the clauses that change what your office does on Monday morning. Whether a term is enforceable where the project sits, what your state does with a pay-if-paid clause, and how far an indemnity provision can reach are legal questions. They vary by state and by how the clause is drafted, and they belong with a construction attorney. Nothing here is legal advice.

The highest-value thing you can buy once, for the whole company, is an attorney’s read of the two or three standard subcontract forms your regular GCs use. That read does not expire. After it, the per-job review below takes an hour and a PM can do it.

What actually defines your scope (it is rarely the scope paragraph)

Most subs read the scope paragraph, recognize the words, and sign. The scope paragraph is usually the least specific document in the stack. Three other things define what you owe:

The contract documents list. Drawings by number and date, specification sections, addenda, and often the GC’s prime contract with the owner flowed down to you. That list, not your estimate, is what you agreed to build.

The drawing and addenda dates. Check them against the set you bid. If the list names a revision issued after the set you priced, you may have just agreed to build the delta between them for nothing. It is one of the quietest ways scope grows in commercial work, and it is found by comparing dates, which takes four minutes.

The catch-all sentence. Some version of “all work shown, specified, or reasonably inferable as necessary for a complete installation” appears in most commercial subcontract forms. It is doing more work than the scope paragraph. Anything you exclude has to be excluded against that sentence, in writing, or expect the GC to read that sentence as covering it.

Read your own exclusions back

Here is the test. Open your quote next to the subcontract and read your exclusion list out loud. For each line, find where in the subcontract that exclusion appears.

If your proposal is not attached as an exhibit, the honest answer is usually that it appears nowhere. Your quote was an offer; the subcontract is the agreement; the agreement usually has an entire-agreement clause and an order-of-precedence clause, and neither of them is likely to mention your quote.

Two fixes, both reasonable asks on a Tuesday:

1. Attach the proposal as an exhibit, with a line in the subcontract saying its clarifications and exclusions are incorporated.
2. Or have the exclusions typed into the scope exhibit itself, which GCs often prefer because it keeps everything in one document.

What matters is that the exclusions ride in the signed stack. The usual suspects, by trade:

• Electrical: trenching and backfill, concrete housekeeping pads, fire-alarm programming and final testing by the manufacturer, temporary power and temporary lighting beyond a stated duration, cutting and patching, owner-furnished equipment.
• HVAC and mechanical: roof curbs and structural support steel, crane and hoisting, test-and-balance, controls integration with the owner’s building system, duct cleaning at closeout, factory start-up.
• Plumbing: site utilities beyond five feet of the building, sleeves and inserts set by others, core drilling, trench safety design, water treatment and sterilization.
• Drywall and framing: level 5 finish unless it is specified, fire-stopping and acoustical sealant where another section carries it, patching behind other trades after your crew demobilizes, final clean.

Every one of those lines is a change order you either gave away at buyout, or will fight for in month five against a clause that already answers it.

Nine facts to copy onto one page

The rest of the review is extraction, not interpretation. Nine facts decide how your office runs this job, and none of them will ever be read again out of the PDF. Write them where your PM and your biller both look.

1. The notice window for changes. How many days from discovering a changed condition until you must notify in writing. Often 7, 10 or 14 days, sometimes 48 hours for differing site conditions. This is the deadline most money dies on.
2. Whether a written directive is required before you perform changed work, and who may issue one. If the answer is yes, a superintendent saying “just do it” may not be something you can recover.
3. The markup cap. The percentage you are allowed on changed work, and what it has to cover. Where your cap comes from, and what it does not pay for is its own hour of reading.
4. Retainage. The rate, whether it reduces at substantial completion, and what releases the rest. When retainage is actually released covers the triggers.
5. Payment timing. Days from certification or from submission, and whether payment to you is conditioned on the GC being paid first. Pay-if-paid and pay-when-paid clauses read alike and are treated differently from state to state, so that one goes to your attorney.
6. The billing cutoff date. The day of the month your draw has to be in, which is almost never the day you would pick. Billing cycle deadlines is about building your month around it.
7. Schedule dates and liquidated damages. Substantial completion, any interim milestone that carries its own money, and the daily LD figure.
8. The compliance set. Prevailing wage, certified payroll, union labor, an owner-controlled insurance program, bonding. Each one changes your cost, your payroll processing, or both — and each one needs to be known before you bid the next job for this GC.
9. Insurance limits and additional-insured requirements, with your broker’s confirmation that you can actually meet them. A limit you cannot meet is a signature you cannot honor.

That page is the deliverable of the review. An hour of reading that produces nothing written down was entertainment. It is also the first half of the job start-up checklist — the list of things settled with the GC before anybody mobilizes.

Quote validity is the clause subs give away for free

Your proposal said the price was good for 30 days. The contract arrives 90 days later with your number on it and no mention of validity.

On a job with copper, conduit, steel studs, sheet metal or switchgear in it, that gap is real money — and escalation is a conversation nobody will have with you afterwards, because the number was already agreed. Either the validity period gets honored in the subcontract, or you ask for escalation language, or you re-price before signing. Material price increases after the bid is about what you can and cannot recover once the ink is dry, and it is a far worse position than this one.

While you are in there, check whether your long-lead items can be billed as stored material, and on what terms. If they cannot, your cash flow on this job looks nothing like your forecast — see billing for stored materials.

Buyout is where the schedule of values gets decided

The subcontract sets the contract sum. The schedule of values decides how fast you collect it, and a GC will accept far more detail before signing than after.

Three asks:

• Split material and installation on each line, so delivered material can be billed before it is installed.
• Closeout as its own line, with a value. It gives the work a number instead of letting it be absorbed into punch.
• Enough lines to bill honestly by area or floor, because a four-line SOV on a two-year job turns every draw into an argument about percentages.

Once the first draw is approved, most GCs treat your SOV as fixed. The hour before signature is the cheapest time to get it right.

Who signs, and who can direct you

The last question takes two minutes. Find out who on the GC’s side can direct extra work and who can approve a change order, because on most jobs they are not the same person, and only one of them makes you money.

Get the name, the title and the email of the person whose written word counts. Then make sure your office knows that a text from anyone else is a change event to log, not an authorization to proceed — which is the whole argument in billing extra work without a signed change order.

How SubMark handles it

SubMark does not give legal advice, and nothing in it replaces your attorney’s read. What it does is keep the two documents the review depends on, and carry what you agreed into the job that follows.

• Your exclusion list stops being retyped. SubMark’s proposal module is opt-in, and once it is on, your inclusions, exclusions and standard terms carry forward as reusable boilerplate behind the proposal rather than a copy-and-paste from the last bid. Set a validity period once and it goes out on every proposal. The proposal exports as a GC-facing PDF, which is the document you ask to have attached as an exhibit.
• The bid carries into the job. A won bid becomes a project rather than a fresh round of typing, so the numbers the scope review was done against are the numbers the job runs on.
• The terms that have to be live every month land in the job. Your schedule of values line by line, with stored material tracked on the line, your draw deadlines per job and per GC, and approved change orders added to the SOV automatically as their own numbered lines.
• The review’s questions get a home per job. With the opt-in pre-construction review module on, your company keeps one list of the questions every job has to answer, and each job carries its own answers against it — the approved package, the scope boundary, the predecessor condition, logistics. The questions are company-wide; the answers are per job.
• Field users are free and unlimited, so the foreman who logs the changed condition your notice window runs from never needs a seat.

Honest limits: nothing in SubMark tells you whether a term is enforceable where your project sits, and no software should pretend to redline a subcontract for you. Our pricing is one company subscription that includes three office users, a per-seat price after that, and a 14-day free trial, no card needed.

Before the next signature

1. Compare the drawing and addenda dates in the contract documents list against the set you bid. Four minutes, and it is where free scope hides.
2. Read your exclusions out loud against the scope exhibit, and get the survivors into the signed stack — as an exhibit, or as typed lines.
3. Fill in the nine facts on one page, and put it where your biller and your PM both work.
4. Ask for the SOV splits now: material and install, and closeout as a line.
5. Get the name of the one person whose written direction counts, and tell your field.

Then do the same thing on the next one. The review is worth most when it is the same review every time, because that is the only version that catches the clause a GC quietly changed since the last job.