September 23, 2023


Making a New Home

Free online tool helps GCs vet subcontractors’ payment history

2 min read

Dive Brief:

  • In what could assistance them avoid challenges on their design projects, general contractors and material suppliers can read through performance testimonials, receive job histories and get payment rankings on far more than 23,000 subcontractors during the U.S. 
  • With the start of Subcontractor Payment Profiles earlier this month from building application firm Levelset, contractors have accessibility to data indicating how likely particular person subcontractors are to fork out their suppliers, consequently preventing potential routine delays and disputes.
  • The no cost profiles also include things like contact facts, license and bond facts, payment data from new building work, most well-liked payment paperwork and a portal to request paperwork or payment from the subcontractor. The details and material employed to populate the profiles arrives from Levelset’s expansive database of hundreds of thousands of development projects, vetted opinions from development providers that have utilized the respective contractor’s expert services and business info, according to a launch.

Dive Insight:

Quite a few GCs put a job out for bid and select partners based mostly on word of mouth with extremely small vetting, development credit score specialist Thea Dudley advised Construction Dive. “Contractors usually know practically nothing about the subcontractor’s relationship with its suppliers and whether or not they pay back them on time,” she claimed.

The impact to a GC when doing the job with a subcontractor with a historical past of slow payments can direct to suppliers putting liens on a undertaking, she extra.

The Subcontractor Payment Profiles sign up for Levelset’s additional than 37,000 Normal Contractor Payment Profiles that can aid subcontractors detect sluggish-paying out basic contractors just before using on operate with them.​

The challenge of gradual payments has been exacerbated by the challenges of the COVID-19 pandemic. Just one particular building enterprise in 10 normally receives paid out in complete, a 75% fall from just before the pandemic, in accordance to Levelset’s 2021 Construction Dollars Flow & Payment Report. Payment delays have also worsened: Just 9% of firms normally get paid out on time, a decrease of 60% from very last calendar year. 

In addition, subcontractors are four occasions much less very likely than common contractors to get compensated within just 30 times, and 50% much less likely to get compensated in entire. A person in five subcontractors, suppliers and other sub-tier events often hold out past 60 days to accumulate payment. 

The new resource displays a sub’s payment historical past and how and when they shell out their suppliers. “How someone pays their charges is a very good indicator of how they run their small business,” Dudley said. © All rights reserved. | Newsphere by AF themes.