Back charges: issuing one fairly and answering one
A letter from the general contractor arrives on Friday afternoon: a $4,800 back charge against your masonry company for cleaning mortar off the level 3 curtain wall. There is no photo and no date, and it is the first you have heard of it. Your foreman says his crew has not worked on that elevation this month.
A back charge is a deduction for work someone else had to do because a trade did not: cleaning, repair or correction that was theirs. It is fair when the trade was told in writing, could fix it and can see the cost. The inspection clause in US federal fixed-price construction contracts shows one sequence: the contractor corrects rejected work at no charge, and if it does not do so promptly, the government may have others do it and charge the cost.
Issuing a back charge
- Check the contract or subcontract: whether back charges are allowed, the notice required, the time to correct and any markup.
- Notify the trade in writing when you find the problem, with photos and a date to fix it.
- Give them the chance to correct it, unless safety or the schedule prevents it, and record why.
- If you correct it yourself, record the cost as you would on a time and material (T&M) ticket: crew, hours, materials and photos.
- Issue the charge promptly with the notice, photos, cost record and clause, not months later in the final account.
When you receive one
- Ask for the notice, photos, dates and cost records if they are missing.
- Check whether the notice and chance to correct that the contract requires were given.
- Check your daily reports and photos for who worked there, and when.
- Reply in writing within the contract's time: accept, dispute with reasons, or accept part.
Common mistakes
- Deducting first and producing evidence only when challenged.
- Fixing the work before telling the trade.
- Charging a round number with no record of hours or materials.
- Ignoring a charge you dispute instead of answering it in writing.
Action list
Before a charge goes out, or when one comes in
- Read the back-charge and notice clauses
- Give notice in writing, with photos and a date
- Allow a real chance to correct, or record why not
- Record the cost like a T&M ticket
- Answer every charge you receive in writing
Check your understanding
A trade's defect must be fixed today to keep a pour on schedule. How do you keep a later back charge fair?
