I signed a $936,000 subcontract on a commercial project two years ago.
The GC had sent over the contract after we’d already mobilized material to the site. We had a second project with them in the pipeline. The relationship felt solid. So I did what most of us do — I flipped to the scope, checked the price, and signed.
Page 27 had a pay-if-paid clause I didn’t catch. Page 14 had a 48-hour change order notification window I never read. And the scope language was vague enough that the GC later argued work we’d excluded in our proposal was “included in the contract.”
Here’s what happened next.
We submitted $42,720 in legitimate change orders — all identified before the project even started. The GC denied most of them. Then they hit us with over $77,000 in back charges, most of which we disputed. The gap between what we bid and what we signed was nearly $60,000. And every dollar of that gap traced back to contract language I didn’t review before I put my name on it.
That project taught me something I should’ve learned ten years earlier: the contract is where you make or lose your money — not the field.
I built a system after that job so it would never happen again. It’s called the Profit Protection System — the exact contract review checklists, change order documentation templates, and payment protection workflows I now use on every DSE and PSS project. If you want the complete system, it’s available here for $67. But today, I want to give you something you can use right now — before your next contract even hits your desk.
The 5 contract clauses that cost steel erectors the most money
I review 10 specific provisions on every GC subcontract before I sign. Here are the 5 that have cost me — and guys I know — the most real dollars.
1. Pay-if-paid vs. pay-when-paid If the GC’s obligation to pay you depends on the GC getting paid by the owner — that’s pay-if-paid. If the owner stiffs the GC for any reason, the GC has no legal obligation to pay you. Even if your steel is in the air and your scope is 100% complete. What to do: Push for pay-when-paid language with a hard Net 30 deadline from invoice approval. If they won’t budge, factor the risk into your price.
2. Change order notification deadlines A lot of contracts require written notice within 48 to 72 hours of discovering extra work. Miss that window and you waive your right to additional compensation — even if the GC verbally told your foreman to do the work. What to do: Know your notification deadline before the first pick. Train your PMs and foremen to send a written email the same day — even a two-sentence email preserves your rights. The formal pricing comes later.
3. Broad indemnification Watch for language requiring you to indemnify the GC for “any and all claims” — including claims caused by the GC’s own negligence. That means if someone gets hurt in your work area because of something the GC did, you could still be on the hook. What to do: Push for mutual indemnification. Each party is responsible for their own negligence. Many states have anti-indemnity statutes, but don’t rely on that. Negotiate it out upfront.
4. Scope gaps and ambiguity Vague scope descriptions like “all steel erection work as required” or “including all incidental work” create disputes. If your scope isn’t specific, the GC will argue that anything related to steel is your responsibility — even work you didn’t price. What to do: Attach your proposal as an exhibit and reference it in the contract. If it’s not in your bid, it’s not in your scope. Get that in writing before you sign.
5. Retainage tied to final project completion Standard retainage is 5-10%. But some contracts hold it until final project completion and owner acceptance — which could be 12 to 18 months after your steel work is done. That’s your money sitting in someone else’s account. What to do: Negotiate retainage release upon completion of your scope, not final project completion. Push for release within 30 days of your substantial completion and punchlist sign-off.
