CIVIL · CIVIL AND EARTHWORK · FIXED BY STEP 06

Your retainage is waiting on 70 percent grass

You finished grading in month three and utilities in month six, and the last 5 to 10 percent of your contract is locked behind a seed bed that has to hit 70 percent cover.

WHY IT'S A CIVIL PROBLEM

A trade sub's retention is released when the punch list closes. Yours is released when a plant grows. Civil is the only scope whose final payment is gated on a biological clock and a permit filing that belongs to the site owner, months or years after the last blade left the property.

WHAT IT COSTS

The size of it

On a $2M site package, $100k to $200k of earned money stays unreleased 12 to 24 months after your crew is gone, and a missed seeding window pushes it another full season. That's the same money that was supposed to fund the next mobilization.

OVERHEAD AT $1M–$5M

14%

CFOS target 13% for civil.

GROSS MARGIN AT $1M–$5M

21%

CFOS target 23.5% for civil.

NET PROFIT AT $1M–$5M

CFOS target 10.5% for civil.

Forecast that retainage to come in a full growing season after your crew leaves, because on a stabilized site that's usually when it gets released. Civil is first on site and last to get paid out: the construction general permit blocks the Notice of Termination until final stabilization, which in Texas means 70% vegetative cover or equivalent permanent stabilization, and final acceptance rides on the NOT. Seed put down in the wrong month waits for the next growing season, and nothing in the contract chain can speed that up, not the GC and not you. Find out the seeding window before you sign, build the cash forecast against that date, and push for release on the phases you already finished.

WHAT TO DO

Three moves, in order

STEP 01

Before you sign, ask when stabilization seeding is scheduled and compare it to the local growing season. If it falls outside the window, price the wait and say so in writing.

STEP 02

Ask for retention release by completed phase, so mass grading and utilities get released on their own acceptance and only the stabilization scope stays held.

STEP 03

Keep every held retainage balance on one schedule with the expected NOT date beside it, and build cash forecasts off that date, not off your completion date.

THE FIX

Step 06: Project management

Billing dates, change orders, and notices, written as standards that work without anyone chasing them.

CFOS-06 · CHAPTER 6

Billing and change orders that hold without chasing

What this step changes, what it depends on, and how to tell it's installed.

BENCHMARKS

Civil by revenue band

All 7 bands are published. The CFOS target is beside the figure up to $10M to $25M, and the 4 bands above that are labelled modeled.

ACROSS EVERY TRADE

The change orders you did and never billed

The field did the work. The paperwork never caught up. Ninety days later there is no record that proves it happened.

SAME TRADE

What else costs civil contractors money

CIVIL · CFOS-04

You bid cubic yards and pay by the ton

You bid 40,000 yards of import and every scale ticket comes back in tons. The biggest cost line on the job is measured in a unit your contract never defined.

CIVIL · CFOS-01

Four mobilizations, one mob line item

You clear and grub in month one, come back for wet utilities, come back again for paving subgrade at closeout, and the contract still has one mobilization line.

CIVIL · CFOS-06

The grading permit clock isn't on your schedule

Third resubmittal on the grading permit, the power pole relocation is six months out, and your crew and iron cost money while no party in your contract chain is at fault.

CIVIL · CFOS-08

Trench dips appear inside the bond window

The parking lot settled over your sewer line eighteen months after acceptance, and who pays comes down to whether the density test for that station and that lift is in a file.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CONCRETE

Done in June, Retention Releases When the Building Opens

Footings, foundations, and slab-on-grade are the first real dollar volume on the site, so you bill most of your contract early and then wait on a building you left a year and a half ago.

DEMOLITION

Demo Goes First And Gets Its Retention Back Last

You work five weeks and wait twenty months for the money. Your retention rides the prime's substantial completion on a building you left before the foundation went in.

ELECTRICAL

Retainage on gear is a loan you didn't agree to

Gear billed as stored material gets retainage at the same rate as labor, even though you funded 100 percent of it in cash before billing a dollar.

QUESTIONS

What civil owners ask

Why is my retainage held until the grass grows on a site work job?

You finished grading in month three and utilities in month six, and the last 5 to 10 percent of your contract is locked behind a seed bed that has to hit 70 percent cover.

What does it cost?

What do I do first?

Before you sign, ask when stabilization seeding is scheduled and compare it to the local growing season. If it falls outside the window, price the wait and say so in writing.

What are civil contractors supposed to be making?

Civil runs 21% gross margin, 14% overhead and 7% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is right on it. The CFOS target is 10.5%.

Which part of the system fixes it?

The step is number 06, project management. Billing dates, change orders, and notices, written as standards that work without anyone chasing them. It comes from chapter 6 of CONTROL: The Construction Financial Operating System.

OR HAVE IT HANDLED

Everything on this page is something you can install yourself, andCONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for civil contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.

What a fractional CFO does for civil contractors

AUTHOR

JOSH LUEBKER

MASTER ELECTRICIAN · 150+ PROJECTS · $2.1B+ MANAGED

Wrote CONTROL, the 8 step system behind these figures. More about the author.