How Subcontractors Can Level the Playing Field

Claire (00:10)Hi everyone, and welcome to Billing & Chilling, the show where we get real about construction billing and what it actually takes for subcontractors to get paid. Every episode, I sit down with people who live and breathe the business of subcontracting to figure out how subs can avoid risky moves and get paid what they're actually owed. Today I have two very good friends joining me, Dick Roberts and Martin Press. I've known both of these guys through ASA for years, and between the three of us, we've had more than a few conversations about the issues we're going to get into today.Martin Press (00:55)Thank you.Claire (00:55)So to kick us off, I'd love it if you two could share a little bit more about your backgrounds—what got you into the construction industry, what you love about it, and what sets your company apart. Martin, do you want to go first?Martin Press (01:06)Sure. Hi, I'm Martin Press, the owner of Press Mechanical Contractors. I've spent the past 35 years in the construction industry, starting my career as a subcontractor and building a business dedicated to excellence in mechanical contracting. The things I'm passionate about are advocating, educating, and legislating for the rights of subcontractors, and trying to make subcontractors value-added companies in the process. Because if you're a value-added subcontractor, you have a better chance of succeeding.Martin Press (01:40)I'm also a past board director of Associated Builders and Contractors of Metro DC. I'm a past chapter president of the American Subcontractors Association of Metro Washington, DC. I'm currently on the executive board of directors at the national level and will be the 2028 president.Claire (02:06)Love it. What about you, Dick?Dick Roberts (02:09)Wow, that's a hard act to follow. I'm the current president of DTR Landscape. I've been doing it for 47 years. My involvement in ASA began through state advocacy efforts. I originally started through the Landscape Contractors Association. I'm currently the past president and current vice president of ASA of Arizona, and I'm on the national board.Claire (03:00)And you guys met through ASA three years ago? How long have you guys been pals?Martin Press (03:06)It was at SUBExcel three years ago. We had the same taste in watches, so that's what attracted Dick to come up, say hello, and ask me about my watch. He had the exact same watch on. Ever since then, we've been very close and collaborative and just really good friends.Claire (03:32)And it's fun to see you guys like, learning from each other's chapters, connecting people. I think so much of what I love about this industry is how much people want to give back and get involved with these associations. So it's cool to see and I'm so excited that I had the opportunity to meet you guys through ASA as well. So a topic that comes up a lot when you know we're all texting or chatting on the phone is the prequalification process. It's supposed to help general contractors manage risk. When they're considering subcontractors on a job, they run a prequalification process to make sure that they're bringing on subcontractors that are going to do the project safely and actually follow through with their contract, have the finances to do so, et cetera. Where do you guys feel like this process has become unfair to subcontractors?Martin Press (04:20)So, two things. First, ASA and I—and I think Dick would agree—believe the prequalification process for subcontractors is very important. We support it both nationally and through our local chapters, and as a business owner, I absolutely believe in it. What I don't necessarily agree with are these third-party platforms that charge subcontractors to go through the prequalification process. You don't have transparency or insight into how these third-party processes actually work, and the scoring system can be so rigid that it fails to reflect the full reality of a subcontractor's business. Not having input into or information about how the prequalification process works is definitely a challenge for subcontractors.Claire (05:17)Yeah. If it's inaccurate or doesn't really tell a true, full story, what can you guys do as subcontractors to advocate for yourself and, be able to like market the business to general contractors around these things?Dick Roberts (05:31)Well, I can speak on a local level in Arizona. We don't have a lot of GCs using a third party right now, but with Textura and some of the other things that have come on, I can see it going that way. One of the problems, like Martin said, is these prequalification companies give you a score based on your balance sheet and financials. I understand risk. I'm taking a risk by working for that general contractor, but at the same time, that risk needs to be shared. When they give you some random score and you can't even protest it, that's a problem. At least when it's one-on-one with the GC, like we do here in Arizona, I can sit down and explain why we've done something a certain way on our balance sheet. With a national prequalification company, it's just data. It's farming data.Claire (06:27)Yeah. It's hard because there are a lot of software solutions that are built to solve the general contractors problem in the space, right? Of like collecting all these prequalifications from subcontractors And that's like an area that we've really focused on letting the subcontractors be the one pushing information to generals. So I think that's probably like a gap in the space right now is giving subcontractors really the opportunity to push this information to the clients that they want to work with. Here's what we want to highlight about ourselves. Here's maybe some things that you might see as red flags, but let me explain them or whatever it may be. But yeah, any thoughts?Martin Press (07:00)I'm going to use the term value-added subcontractor a lot because if you're a value-added subcontractor to a general contractor, they shouldn't be asking you to prequalify without being willing to provide you the same information they're asking of a subcontractor. We want to know about their payment history and their reputation and their financial strength and their credit report and bonding capacity, all the things that they're doing. To prequalify us, we should have the same transparency in prequalifying them. As it is, we're spending thousands and thousands of dollars on an estimate just for the right to bid a job. And we don't expect any compensation, we don't get paid for it And then the biggest problem with the prequalification process is if you talk to a general contractor and they get an unsolicited subcontract bid time from a subcontractor that is not currently prequalified for that GC, they're going to have to use the bid in order to stay competitive. And then they're going to have to evaluate if they're the low subcontractor how to get them prequalified. So the prequalification process, although It's being used by the GCs. It's not the end-all be all for a GC's decision on who they're going award the subcontract to.Claire (08:15)Yeah. Dick, anything to add there?Dick Roberts (08:18)No, he said it perfectly. I agree with him a hundred percent.Martin Press (08:21)Yeah, and then these third-party platforms that want to charge you. Why should we have to pay to have the right to do estimates for the company? And if you do four, five, six estimates a month for a general contractor and then they want you to pay a fee to get pre qualified, there's something wrong with that. I don't mind prequalifying if there's no cost involved and it's an internal process for the general contractor and we're able to have a Zoom call to review our financials, but I absolutely don't understand the third-party process where we there's no transparency. We're uploading, we don't know how the third-party secures the information, we don't know how they score the information, and don't get the right to dispute it. Yep.Claire (09:04)Yeah. How often do you guys push back and ask those types of questions of GCs? Do you feel like empowered to ask those questions or ask for their prime contract?Martin Press (09:15)I ask for the prime contract 100% of the time. I'm not sure Dick and I are on the same page on that because every market and every GC is different. But in my market, we do not proceed without the prime contract. If they won't provide it, we strike the references to the prime contract from our subcontract agreement—as many as 56 times. So they have a choice: allow us to strike those references or provide us with the redacted prime contract.Martin Press (09:22)And every market is different and every GC is different, but in my market, we do not proceed without the prime contract or we strike through our subcontract agreement as many as fifty-six times that prime is mentioned. So they have a choice. Either we either allow us to strike through the word or provide us the Redacted prime contract.Claire (09:45)Dick, why do you disagree with that?Dick Roberts (09:47)It's not that I disagree. It's just that we don't see a lot of that in Arizona. We don't ever get to see the prime contract. We've asked for it and basically been told that's between the GC and the owner and none of our business.Claire (09:55)Interesting.Dick Roberts (09:56)Asked for it and basically been told that's between the GC and the owner and that's none of our business.Claire (10:02)Huh. That's interesting. Yeah. Whenever I'm doing any sort of presentation, that's one of the tips that I always encourage subcontractors to ask for, especially if the terms are referenced in your contract. It seems kind of crazy that they wouldn't share that information with you.Dick Roberts (10:15)Believe me, we've we push it as far as we feel we can without alienating.Dick Roberts (10:20)A client.Claire (10:22)Yeah. A guest we had on earlier this season talked about like prequalifying her GCs in a way. And I guess it was kind of in the realm of like what you were talking about, Martin, with like asking some of these questions, including running credit checks on certain general contractors. How do you guys think about as a business which GCs you should work with and which ones you should maybe not pursue work with?Martin Press (10:41)Between Dick and me, we've been doing this for almost 90 years. I know all the GCs in my market. It's the ones that come from out of state—one and done, coming into the market to bid a project—where you have to find out whether they're going to pay you or not. One of the things you can do is be a member of an association, because associations give you the opportunity to talk to other business-minded people in the subcontractor industry and ask those questions: Does anybody have information about this general contractor? You'll get feedback and answers. I believe subcontractors and general contractors want to do the right thing; it just doesn't always happen. So get the best information you can to make the best business decision. Be a member of an association, develop relationships with other subs on projects you're currently doing, and ask if they've worked for other GCs they would recommend.Martin Press (10:55)I know all the GCs in my market. It's the ones that come from out of state, one and done, come into the market, bid a project, and then you have to find out whether they're, you know. Going to pay you or not. One of the things is be a member of an association because the associations give you the opportunity to talk to other, business-minded individuals in the subcontractor industry and ask those questions. Does anybody have any information about such and such a general contractor? And you'll get feedback and answers. And I believe that all subcontractors and general contractors want to do the right thing. It's just that. It doesn't always happen. So making sure you get all the best information to make the best business decision by being a member of an association, by you know trying to develop relationships with the other subs on a project you're currently doing and ask them if they've ever worked for other GCs that they would recommend.Dick Roberts (11:52)I was going to mention associations, too. At a lot of our mixers and events, if a GC has contacted us to bid and I've never worked for them before, I'll talk to other people in our association. Have you done any work for them? What were they like? Did you get paid on time? I have my own little mental checklist I go through.Dick Roberts (12:12)Did you get paid on time? I kind of have my own little mental list checklist I go through.Claire (12:18)That was my next question. What's on that mental checklist? It sounds like did.Dick Roberts (12:22)It's good.Claire (12:22)They pay you on time? What else?Dick Roberts (12:26)Payment first, safety second.Claire (12:27)Is that the biggest thing?Dick Roberts (12:29)Payments first, safety second. Actually.Martin Press (12:33)And the ability to escalate within the organization if there is a problem. Are you only talking to an APM, or can you get an executive on the call, explain the situation, and get some empathy or assistance working through the issue? Or do they just shut you down, send you a 72-hour cure notice, and tell you to get it done? As a value-added subcontractor, I don't take bullying from anybody. There are a lot of bullies in our industry who think that because they bully you, you're going to do what they tell you to do. Don't take direction from anybody without verifying it. Trust but verify, and make sure it's in your contract. We have more responsibility for knowing the project and the project documents than we probably take seriously, and we need to be more conscious of doing everything we can to get the best results.Claire (13:32)Anything to add, Dick?Martin Press (13:32)Does I still answer.Dick Roberts (13:33)We look at things differently, obviously. One of the big things for me is how they process change orders. A lot of times you'll get a request for a change order that's almost immediate: “We've got to get this done right now so the next step can happen.” You do the work, and then you're fighting for two months to get your change-order paperwork done so you can bill for it. Those are my top three things: safety, payment, and how they process and communicate change orders.Dick Roberts (13:55)Done so you can bill for the work. So that's Those are my top three things that I look at. That it's safety, payment, and how do they process change.Claire (14:04)And change orders.Dick Roberts (14:04)Orders and the communication for it?Claire (14:07)Yeah. I feel like that piece that you mentioned, Martin, of being able to like escalate it within the general contractor also just comes from like your relationship building. You know certain individuals at these general contractors that you can call on, which like someone who's just getting started is going to have a harder time with that. And I think that's like a little bit less tangible maybe. But something to work towards and continue to build these relationships with your clients over time so that you have that phone number that you can call when things are going south on you.Martin Press (14:36)I think Dick and I will both agree that the most important thing in our industry is relationships. Your relationships are what make projects successful or unsuccessful. There are challenges in every project we do, but when you're directed to proceed on a change order and the project team later doesn't want to issue it, you need a way to escalate and get to a decision-maker—someone you can call and explain the situation to.Claire (15:06)Yeah. Jumping into a slightly different topic, Martin mentioned contract terms and how you have to pay very close attention to all of the details. A standard in the industry for subcontractors is pay-when-paid contracts. So.Claire (15:19)I had an interesting, I know Martin's like prompt pay laws are so boring. Why would we ever talk about that? One question I do want to ask you guys though is I was speaking with a f a good friend the other day who's actually a construction lawyer. And What he said to me was that there are so many laws protecting subcontractors. He feels that the majority of laws are written to protect the subs, but that the issue really is like the gap in knowledge and knowing the ins and outs of these laws that are built to protect you. What's your reaction to that?Martin Press (15:48)I'll let you take that one, Dick.Dick Roberts (15:50)Ha three thanks.Dick Roberts (15:53)Yeah, he's right. The laws are there, which makes you wonder whether it's because there are enough shady general contractors out there that these laws had to be passed. Martin thinks it's boring to talk about pay-when-paid, and I think it's crucial. I helped advocate for prompt-pay legislation in Arizona. Unfortunately, the way they got around it was pay-when-paid. If I want to keep my relationship with the general contractor but I don't believe the owner hasn't paid him, do you really think I'm going to risk that relationship by calling the developer or owner and asking, “Have you paid the GC yet? Because I haven't been paid”? I've never done it because I'm afraid I'm going to burn a big bridge right there.Dick Roberts (16:04)Be passed? Martin and I he thinks it's boring to talk about pay when pay, and I think it's crucial to talk about it. But I helped advocate for it in Arizona to get it through. Unfortunately, Way they got around it, and that was pay when pay. Well, if I want to keep my relationship with the general contractor, but I don't believe that the owner hasn't paid him. Do you really think I'm going to risk that relationship by making a phone call to the developer or the owner? Hey, have you paid the GC yet? Because I haven't been paid. I haven't, I haven't found where that where that lies. Is it 60 days? Ninety days, I've never done it because.Dick Roberts (16:48)I'm afraid that I'm going to burn a big bridge right there. And I know Martin, I think you feel differently.Claire (16:52)'Cause you feel like it's like breaking their trust.Dick Roberts (16:56)Yeah, that we don't trust exactly.Martin Press (16:58)Again, there are laws, and the contract protects you through its payment terms. You need to know your payment terms and manage the contract. It's not that pay-when-paid or pay-if-paid is boring to me. It's that you have control over who you will and will not work for. Don't work for general contractors that have a reputation for not paying their bills.Claire (18:42)Yeah. And I think it's something that we actually layered into our product after I had a conversation with I think it was with both of you when we were talking about time to payment and evaluating different clients that you work with and the importance of also going a step higher and looking at the actual owners and developers. So you know, okay, when I work with this GC, they always pay me in, let's say fifty-five days, but this particular owner pays a ninety plus. So even if I'm working with this GC, I need to pay attention to that because that's going to have implications on my cash flow. So it's a it's a good call out.Martin Press (19:15)Well, I got an education. Claire, you give me an education because I thought we got paid pretty well. I thought we got paid timely. I thought we were our average was thirty-five, forty, forty-five days. And after using Siteline as a as a tool for all of our billing,.Martin Press (19:30)I got information that I was not even close as accurate, that it was longer terms and longer payment turnarounds than I had even believed.Claire (19:39)Yeah. You'd be surprised how often that happens, especially when like contractors feel they have a really good relationship with the GC and they're like, no, they always take care of us. And then you actually look at the data and you're like, whoa, actually, it does take us a really long time to get paid with that specific client. Dick, you mentioned that you don't want to go and call the owner and say, hey, have you paid the GC yet? Because we haven't gotten paid. When you see payment timeline slipping, what Have you learned about protecting your cash flow without like blowing up that relationship with the GC? Are there different like methods or approaches that you take to try to kind of walk that tight rope?Dick Roberts (20:19)Most of our jobs aren't done within 30 days. They're 60 days to a year and a half long. I've threatened to pull guys off a job if I don't get paid. If they truly have an issue with the owner, let them deal with it, not me: “My contractor is going to walk off the job if we don't get our money.” That's been the biggest way I've finally had to pull the plug, if you will, and I've always gotten paid. I've never not finished a job because they didn't pay me.Dick Roberts (20:42)That's been the biggest way I've gotten where I finally had to pull a plug, if you will, and I've always gotten paid. I've never not finished a job because they didn't pay me,.Claire (20:55)If you run into a scenario where your client, the GC, is telling you, we haven't received funding from the owner yet, you guys ever try to like work with them as a team to be like, okay, how can we resolve this issue with the owner? Can I, as the subcontractor, go and say something to them, but you know, I'm mentioning it to you ahead of time. So it's not like I'm going behind your back. Or like, if I send in a notice of intent to lien. Or something, is that going to actually move the needle? Because the GC wants to get paid too. And I feel like that's a way to kind of like reposition the conversation so that you're saying it in a way that's like, let's work on this together. Does that ever do you guys ever do that or does that work for you?Martin Press (21:35)One thing I've realized—and I've done this a long time and am fortunate to have a lot of industry acquaintances and friends—is that more and more general contractors are delegating this to project managers who may not be experienced. More often than not, when I escalate within the GC and tell a project executive we haven't been paid, I find out the project executive had no idea. They'll escalate it within their organization and get someone to call the owner and push for payment. If you don't escalate and let somebody know there's a payment issue, sometimes even the GCs don't have the bandwidth to manage it properly. In my experience, escalating within the GC and making sure there's an executive calling on your behalf—and on behalf of all the subcontractors—has always been the best first step.Martin Press (22:31)Escalating it within the GC and making sure there's an executive in the GC organization that's calling on your behalf and all the behalf of all the subcontractors in my opinion and my experience and my success has always been the best first step.Claire (22:45)Yeah, I totally hear you. Something that is like I'm struggling with a little bit in my head is the idea of like the need to have these escalation points or these really strong relationships that you've built over decades in the industry and through all of your connections and associations to be able to like actually move the needle and actually get paid for the work that you're doing on a project. Like it just seems a little bit it seems like the system is like a little bit broken if that's what it takes to actually get paid for the work that you've completed.Martin Press (23:14)I'm going to let Dick chime in on this, but all of my relationships were made and have been nurtured through associations.Martin Press (23:22)Showing up, participating, and being in the room with people who weren't decision-makers or executives when we all started out. We all grew up in the industry together, and the people who were superintendents and APMs are now running the organizations I still choose to work with. The question I get asked most is: What happens when my generation and Dick's generation retire?Martin Press (23:48)Retires? So Dick.Claire (23:50)Yeah, and it's like someone said to me the other day too, they're like, I love the construction industry. It's like, you have all these gritty hardworking people and like it creates so many opportunities or so many family owned businesses. And I'm like, I feel a little bit frustrated with the industry in the way that I feel like the deck is stacked against subcontractors. And the tips to being successful is building all these really, really strong relationships that you can protect your business. But I'm wondering if there's more That we could say to like maybe someone who's just, they came up through the trades and they're starting their own business. It's like, what can you do to actually make sure you get paid on your projects? And it's like, take decades and you know, show up and get involved with associations. I feel like that's I totally appreciate it and I.Dick Roberts (24:37)Right.Claire (24:37)Respect it, but it's also sad in a way of like that's what you need to do to actually just like get paid and be able to like run your business successfully.Dick Roberts (24:45)Personally, I feel like general contractors are always looking toward the next job, and I respect that. If they have a client with more work coming up, they tend to rock the boat a lot less. They're not willing to say, “We haven't been paid either, so let's call the owner and push to get payment.” Sometimes they won't do that because they don't want to rock the boat. They'll just tell us as the subcontractor, “We haven't been paid yet. It's in your contract. We'll pay you when we get paid.” I've been in Martin's shoes, too, where the project manager doesn't stay on top of getting payments. Then you escalate it and all of a sudden the money appears.Dick Roberts (24:55)Client that's got more work coming up, they tend to rock the boat a lot less. They're not willing to, gee, we haven't been paid either, so let's call, the owner and let's push to get payment. I feel sometimes they won't do that because again, they don't want to rock the boat. And they'll just tell us as the subcontractor, well, we haven't been paid yet. It's in your contract. We'll pay you when we get paid. And I've been in Martin's shoes too, though, where the project manager doesn't do their job and stay on top of getting payments. And then when you escalate it, then all of a sudden the money appears.Martin Press (25:36)Yeah, with automated payments, sometimes they just don't click the button and they the right.Martin Press (25:42)The GC got paid. But you've got third-party platforms now that prevent, are helping that process be more efficient. So it's not a matter of pay-if-paid, If the general contractor gets paid, there's third-party platforms that'll automatically pay out. And that's the reasoning behind the GCs using them. Well, you get paid so much faster because we don't have to wait till we get paid, Yeah, but at what expense? Right now the expense of getting that money faster is what the general contractors are using as a reason to use those third-party platforms. And they've never asked the subcontractors if that matters to us or not, because the money's a lot.Dick Roberts (26:26)Well, and we're the ones paying for that third-party platform.Martin Press (26:29)Right.Dick Roberts (26:32)You're having us pay for a platform that's supposedly going to help us get paid quicker, but it really doesn't. The only benefit I've seen is that the money gets put into your account overnight, as opposed to waiting on the mail or going to pick up a check.Martin Press (26:49)But GCs have ACH. They can they can still do the same process of having the money deposited in your account overnight. I would ask like Claire, have you seen an improvement in turnaround days and time with third-party platforms? Do you see a significant difference in the time it takes to get paid?Claire (27:07)That's actually something I haven't really dug into. I've seen that there's a lot more transparency for subcontractors when they can look into one of these platforms that a GC uses because they can see if there's a specific compliance hold versus it just being kind of in a black hole of I don't know if the GC's waiting on anything for me. But we're trying at Siteline to flip the script a little bit and build a platform for subcontractors to manage it all. And sync to all these various portals that GCs may require of you and submit any custom documentation. And we're seeing with that process a decrease in time to payment for our subcontractors, just because it's like keeping all of your ducks in a row from a compliance perspective and having the collections follow up, some automation around the escalation process and things. We have a lot of data around. Clients that are billing their GCs outside of these portals and billing through the portals. So it's something we should definitely look into. It's a good idea. When you guys are, as all subcontractors, and it's like one of the biggest problems in the industry that we are trying to tackle at Siteline is how long it takes to get paid. And as a subcontractor, you're financing labor and materials while you wait for the money to catch up and move downstream. We've talked a little bit about all the, I guess, the lack of transparency between when actually a GC is getting paid and if the money is flowing quickly to you. But even if it flows quickly, you're getting paid in, let's say, best case scenario, under 50 days. Maybe you have a really great client who's paying you in 30, but like the industry average is over 90. And the average we see across our clients is in the 50s. How do you account for that? When you're deciding whether a job makes financial sense for your business.Dick Roberts (28:53)For me, part of your partnership is your suppliers. If you can't get good terms from your suppliers, or you have a credit limit and you're bidding a job that's going to put you over that limit, you better clear it with your supplier: “Will you raise my credit limit? I'm going to take on this job, and it's going to be X amount of dollars to you.” They have to make that determination, too. You need that line of communication. Then you have to look at your labor and make sure it all fits, because it is a cash-flow issue. You can't take on another job, work your guys 12 hours a day, and eat all that overtime just because you wanted to add another job. It has to fit into the schedule, too.Dick Roberts (29:20)Too. So I think you have to have that line of communication. And then you have to look at your labor and make sure that it all fits in that way because it is a cash flow thing. You can't you can't take on another job and work you guys 12 hours a day and eat all that overtime just because you wanted to add another job. It has to fit into that schedule.Dick Roberts (29:42)Too.Claire (29:43)So the first place you look is your payment terms with your vendors and seeing, is there the opportunity to pay them in 30 days or longer? What are your payment terms typically with your suppliers that you guys work with?Dick Roberts (29:56)Ours is between forty five and sixty.Martin Press (30:01)Ours is 30 to 45. But communication.Claire (30:04)Yeah. Right.Martin Press (30:07)Communication and transparency with those vendors is very important. But remember: We have to pay 100% of an invoice when we receive 90%. For all of our materials and equipment that we bill dollar for dollar, we get 90 cents on the dollar and pay out 100% to those vendors. I've been able to negotiate time frames of 30, 45, or 60 days, but I've never been able to negotiate with a supplier to accept 90 cents on the dollar or let me withhold retainage from them even though it's being withheld from us. It's a double-edged sword.Claire (30:50)Yeah. The subcontractors are always the ones getting squeezed. Then.Martin Press (30:54)You have to argue for a reduction to 5% at 50% completion. You have to ask for a reduction in retainage. The problem is that most subcontractors never ask. You have to be proactive, you have to be aggressive, and you have to be a value-added subcontractor. I've heard people on my board and members of our association say, “It must be nice to be a mechanical contractor. I'm a painter; we're a commodity.” First of all, stop thinking of yourself as a commodity. How does the painter become a value-added subcontractor? Are you providing estimates to the general contractor and supporting their preconstruction services? Are you showing up when you're supposed to and meeting the job conditions, contract schedule, and scope of work? You have to remind general contractors why you're a value-added subcontractor, because they're not going to automatically say, “You're a great guy.”Martin Press (31:55)That didn't come out right. But no, Dick and I have great.Claire (32:02)Okay, back. So.Martin Press (32:05)Businesses, but we have very different business, ways of achieving being value-added and achieving the same goals, but we go about it different ways. And there's a lot of different ways to prove your worth through a process.Claire (32:21)Yeah. I think it's very difficult to negotiate payment terms in your contract.Claire (32:26)I very rarely see subcontractors make any headway there. But I do think it is important to push back on the on your retainage terms. I think there's a huge opportunity there and subcontractors often don't you don't get what you don't ask for. So being confident in the value that you add, knowing that you're the best contractor for the job and going into the negotiation saying, what? You guys need me more than I need you, and here's what needs to happen in order for this project to make sense for us.Martin Press (32:53)Right. You threaten what if you threaten one time to the all the estimators and the pre construction team that you're not going to provide any more estimates until you get paid, you watch how quick that could turn around payment as well. Cause they.Martin Press (33:07)Do rely on you. I'm the walk-away guy. You're not going to be able to change terms and conditions on boilerplate contracts or bigger GCs are not going to let you manipulate or change the terms and conditions, but you sure can learn how to manage them. To be able to manage the schedule, manage the scope of work, and manage the process. We do have a lot more control than what we are taking advantage of. And managing a contract is probably one of the greatest things a subcontractor can do to, fight the terms and conditions. Because if you're not in violation of the terms and conditions, they can't withhold your money and they can't violate you. But if you don't know what they are and the superintendent telling your field that they need to do this and they don't ask the question, is this in our scope of work and just go and do it? Well, you just got a non-compensable change order that you can never bill for because nobody asked the question. They just took direction from somebody who said that we you own it, you need to do it, so go do it.Claire (34:12)Yeah. You said you're like the.Martin Press (34:14)Was it?Claire (34:14)Walk away guy. You're not going to take a project where the terms maybe aren't in your favor. What would you say to a contractor that's growing their business and they feel like maybe they have to take on some jobs that aren't the best terms necessarily for them to be able to kind of build out their backlog or book? Or like alternatively, maybe like when the market shifts a little bit. And folks are seeing their backlog drying up and they start kind of considering jobs that maybe would they would say no to. What advice would you give?Martin Press (34:40)Go ahead, Dick. I know you love this one. Walk away. But.Dick Roberts (34:42)Walk away. Walk away. Very simple.Martin Press (34:47)It's the hardest thing a subcontractor can do.Dick Roberts (34:50)It is. But it's also the quickest thing that can bury you and put you out of business.Martin Press (34:53)I just.Dick Roberts (34:53)You and put you out of business too.Martin Press (34:56)Correct. I just sent a subcontract agreement back that I wasn't willing to sign because they weren't willing to compromise on the prequalification process. They rethought their decision 10 minutes later, sent the contract back, and said, “All right, we'll waive the prequalification fees.” It's a little game of chicken. The hardest thing a business owner can do is ask, “How do I walk away from something I really need?”Claire (36:18)So the three of us were together in DC advocating for subcontractors through the ASA National Board. Just quickly like tying the loop on the prompt pay piece. How well do you guys feel like prompt pay laws actually work for subcontractors?Martin Press (36:30)Yeah, I don't believe they.Claire (36:30)Why is that?Martin Press (36:31)You have to break it down into four markets: the federal government, state and local government, municipalities, and private work. The answer is different in each market. When you legislate and advocate, you're doing it on a federal, local, or private-work platform; you don't legislate for all of them at once.Claire (37:27)Yeah. Dick, anything to add?Dick Roberts (37:29)He's right. But I do believe that if we pass it through the state and federal levels, it tends to drop down to the private sector, too. The laws are still going to be the laws; the question is how you enforce them. We got a really good prompt-pay law in Arizona, and then all of a sudden we started getting pay-when-paid put in.Claire (38:10)Yeah. It's kinda sad. That's depressing. But we won't give up the good fight.Dick Roberts (38:16)Well unfortunately, we could have this same conversation in 20 years and maybe with two different people with you, Claire, but it's going to be the same conversation. There's still not, no matter whatever we've done, there's going to be a different way that they've figured out how to not pay somebody in 30 days. And we as subcontractors have to figure out how we can make it work and still be profitable.Martin Press (38:44)You have to continue the conversation. Even if we change one general contractor at a time—one who understands this and advocates with the next owner for prompt pay or quicker pay—then we win. This industry is a project-by-project fight. You're never going to win the whole industry. The worst comment I've ever heard, and one I hope I never hear again in my career, is, “That's the way we've always done it.” That's not an answer. It's a philosophy people live by and accept. We have to stop accepting it and keep talking about it. We've got two generations now that have to stop thinking that way and start thinking more positively and proactively.Claire (39:42)Yeah. Well, my husband would tell you that if you tell me that I can't do something, that's going to be the biggest motivator for me. So hopefully twenty years from now, you guys are chilling by the pool and I'm texting you and saying, look where we've got in this industry. Subcontractors are paid in X amount of days and.Martin Press (39:59)Love your optimism and I think we're in great hands in the future with yourself and.Martin Press (40:03)Your husband and like-minded people.Martin Press (40:06)But the reality is, if you're not a member of an association or part of the process, you're part of the problem. You need to be part of the solution. Join an association. Talk about this. Be part of panel discussions and podcasts. Educate your employees.Claire (40:26)Yeah, and set it like understanding the laws that are set up to protect you, I think is an important piece too. Martin, you've been working on an effort in Virginia that would give subcontractors the option to use a retention bond instead of leaving cash upstream. I know we kind of got off topic from the retention piece, but going back to that. What are you trying to change and how would it work?Martin Press (40:46)This is more than a Virginia initiative. It's a national initiative that the American Subcontractors Association is working on with the Construction Financial Management Association and bond writers. Our goal is to have the option to use retention bonds instead of having general contractors and owners withhold cash retainage. Current retainage practices can tie up a significant amount of capital for months or years. A retention bond provides security to owners and GCs while allowing subcontractors to access their earned funds. I don't see a downside. You get the use of your money, and they get the security that's the reason they hold retainage.Martin Press (41:47)And their vendors.Claire (41:49)Yeah. What we one of the things we talk about a lot here at Siteline is getting contractors off the cash flow tightrope. And I think there's a misconception that only happens for these like smaller mom-and-pop shops or contractors that are just getting started. But even the really big guys who are growing really fast and maybe they're doing over three hundred million per year, they still are struggling with managing their cash flow. And that could be the thing that puts them out of business. They're spending the time figuring out are we going to be able to make payroll because they're taking on these projects and financing them. So it's a problem that doesn't go.Martin Press (42:20)Well,.Claire (42:21)Away.Martin Press (42:21)A GC said something to me the other day when we were having this conversation: “We're in the same boat. What are you talking about? They're holding 10% of our contract in addition to the 10% we hold on you.” GCs are now in favor of a retention bond because they want their money as well.Martin Press (42:34)They're in favor. GCs are now in favor of a retention bond because they want their money as well.Claire (42:41)Yeah. But GCs aren't financing the job. So they can say they're in the same position, but.Martin Press (42:46)Well, they finance general conditions and they finance their, their operation. But that's true. They're they're not they're not financing the way a subcontractor finances a project, And it's hard. It's it's not for the weak minded or the, weak of heart.Claire (43:03)Yeah. For a contractor that might be like evaluating the differences between a retention bond where you're paying a fee, obviously, or having that retainage being held by the general contractor and like tying up your cash. What difference can keeping more of that cash in the business actually make?Martin Press (43:20)Look at the retention as your re as your retirement fund because basically that's what it becomes, right, Dick?Dick Roberts (43:26)Yeah, that's exactly right. We have a tendency, well, it's only 10%. Well, 10% of a million dollars, $100,000. That's a lot of money. That's how you know all are part of several payrolls you could cover. And I think Martin has said it a couple of times, and I think it's what's key to all subcontractors, especially the younger ones, meaning younger, been in business, younger, less time. The more education you have. In accounting, in project management, in safety, the better off you're going to be down the road. Education's the key to everything in my opinion.Claire (44:08)Yeah, absolutely. And I'm sure anyone listening to this conversation can like appreciate and hear you guys very confidently talking about the laws and contract terms and hopefully that inspires folks to also take the time to really learn this stuff. 'cause I think it puts you in a good position from a negotiation perspective with your client and people also respect it. They're like they're running a well-oiled machine, they know what they're talking about. Let's like paint the picture of, 10 to 15 years from now. What's the change that you really want to see in the industry?Martin Press (44:36)What I find more exhilarating and exciting than pay-when-paid or pay-if-paid is the prospect of AI in construction. There are things we don't even know yet. Dick and I are part of a task force at the national association trying to learn about all the different platforms out there that will make our jobs, our businesses, and subcontracting more efficient—and help make subcontractors value-added. A product like Siteline streamlines billing. We did 89 subcontractor requisitions this month. It used to take us almost 10 days; now we do it in two. There are also third-party tools that read contracts and tools that can help with estimating. Claude and ChatGPT can compare submittals with project specifications and give you a spreadsheet within three to five minutes, potentially cutting weeks off the submittal process.Claire (45:48)Okay, so efficiency as a business by leveraging AI is like the kind of biggest change you want to see. Dick what.Martin Press (45:54)To make yourself a value-added contractor.Claire (45:58)Yeah. What about you, Dick?Dick Roberts (46:00)He's right. AI is going to be key. But again, I'm going to fall back on my last point: education, and knowing how to do it and do it right. A few years ago, we had a class at ASA Arizona on the difference between cash flow and profit and loss. Two bankers and two accountants taught it. After 47 years, I don't know that I could give you the textbook definition, but I can sure tell you the reality of what those two terms are. I watched younger guys who had only been in business a few years have a blank look on their faces. That's where I agree with Martin: I think AI is going to make it even easier to learn what things mean and how to avoid the pitfalls.Dick Roberts (46:48)It. Yeah, I wish I wish it had been around twenty years ago.Martin Press (46:52)But it could also keep the next generation from having to learn. It's like calculators. When we had to learn math, we weren't allowed to use a calculator. These kids may never understand budget versus actual job costs because they'll just put the budget and job costs into AI and ask where they screwed up.Martin Press (47:01)We weren't allowed to use a calculator. Well, these kids will never understand a budget versus actual job costs because they're just going to put the budget and put the job cost into AI and tell ask it the where we screwed up. And it gave us industry specific. It wasn't generic, it wasn't general, and it gave us the.Dick Roberts (47:19)And then.Martin Press (47:20)It still shocks me how many people don't use AI on a daily basis. Claire, I saw you at our last national board meeting going through your emails and having AI sort them for you. I've been doing it ever since because I go through thousands of emails a week. Now the platform sorts them for me, moves the ones I don't need, deletes the ones I want, and even took me off subscription lists.Martin Press (47:38)I've been doing it ever since because I go through thousands of emails a week, and now the platforms sorts it for me, moves the ones that I don't need, and deletes the ones that I want. And it actually took me off of subscription lists. It I asked actually told.Claire (47:55)Yeah, that's the best. All right. Well,.Martin Press (47:57)So.Claire (47:58)AI will get us all more efficient so that everyone can spend more time at their beautiful pools. Martin is very tan, it looks like he's already spending a lot of time in his pool. But thank you guys so much. The time just absolutely flies by when the three of us are chatting. So I really, really appreciate it. I can't believe we're already up. But thank you guys. Any parting thoughts? Anything else to add before we close it down?Dick Roberts (48:22)Maybe look up your local ASA chapter in whatever city you're in and see if you have one. Join it. Learn from all of us who have been doing it a long time.Martin Press (48:32)And even if it's not ASA—if it's ABC, NAOP, or especially women-in-construction organizations, which are popping up chapters all over the country—get involved. And check out Siteline for billing. If you do a lot of billing like we do, it streamlines it and makes it more efficient. I can tell you we don't dread billing cycles anymore because it's so much easier to do through Siteline.Claire (49:18)Well, thank you. That means a lot. Thanks again for your time, and thanks everyone for listening. Have a good one.Martin Press (49:25)Have a great day.