Can Construction Contracts Be Negotiated?
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One of the questions that I see my construction-based customers struggle with the most often is whether or not their construction contracts can be negotiated. Oftentimes, as a tradesman, they’ll be handed a big stack of papers by a huge construction company and be told that there’s nothing to be done about it. However, this might not necessarily be the case.
The Truth About Construction Contracts
If you’re working with a contractor and they tell your client that the deal is non-negotiable, they’re either lying or mistaken. In almost every case, they have a nearly identical contract for another client that’s got a better deal.
The confusion comes in because contractors tell them it’s not up for negotiation. They claim that no changes are allowed to be made to the contract. In some cases, the contract will even say at the top that the contract cannot be altered.
In reality, you can ignore that. All contracts are completely negotiable.
That said, the ability to negotiate a contract is dependent on your relationship with the contractor, your price, and how much they need you. The last point – how much they need you – is especially important. If you have something they need that they can’t find anywhere else, they’re going to be a lot more willing to bend here and there.
Examples of Negotiable Contract Situations
If there’s a small business or CSBE goal on your public project and you happen to have that designation, the contractor has no choice but to use you to ensure that they make enough of the contract value as a whole to meet their goal. In this scenario, you have far more negotiating power than you think.
Another scenario is if an architect designed a project that only you and a handful of others can achieve. Whether it’s a certain type of window, generator, etc, this will give you a higher standing with them because the contractor really needs you.
Closing Thoughts on Contract Negotiations
In summary, it’s all about supply and demand. The more they need you, the more they’ll be willing to make changes to the contract. No matter how much they insist otherwise, every contract is negotiable. In fact, the more insistent they are, the more likely it is that there is a way to get them to negotiate.