They Found A Tank A Year After You Demobilized
An old UST turns up under the pad twelve months after your last load left, and every finger points at the contractor who isn't on site anymore.
Other trades get callbacks on work somebody can walk over and look at. Demolition gets claims about what was underground and what was next door, discovered by another contractor's machine, months after your iron left the county. The evidence can't be re-opened, because removing the evidence was the scope.
The size of it
A single tank or one adjacent-building settlement claim can exceed the gross profit on the job that created it. It hits a period where that job is already closed on the books, so it comes out of current P&L with no revenue against it.
Your only protection is the record you made while the machine was still there. Demolition has no warranty in the finish-trade sense; its tail is what got left behind or never found: undocumented underground storage tanks, buried foundations and grade beams the excavation contractor hits later, abandoned utilities cut live, over-excavation the earthwork sub has to backfill with structural fill, and adjacent-property claims for settlement, cracked party walls, and vibration that turn up a season later. Waste manifests come with generator liability that follows the load with no expiration, so you remain the generator of record long after final payment cleared. All of it comes back after you've been paid, which leaves the GC two levers: retention or a direct backcharge. Document the site as though you'll be defending this job eighteen months from now, because that's when the phone rings.
Three moves, in order
Step 06: Project management
Billing dates, change orders, and notices, written as standards that work without anyone chasing them.
What else costs demolition contractors money
The same mechanism in other trades
What demolition owners ask
Who is liable when an underground tank is found after demolition is finished?
An old UST turns up under the pad twelve months after your last load left, and every finger points at the contractor who isn't on site anymore.
What does it cost?
A single tank or one adjacent-building settlement claim can exceed the gross profit on the job that created it. It hits a period where that job is already closed on the books, so it comes out of current P&L with no revenue against it.
What do I do first?
Standardize a closeout media package on every job: pre-demo condition of adjacent structures, every cut and cap location with a tape in the frame, and final grade tied to survey or GPS points.
What are demolition contractors supposed to be making?
Demolition runs 20% gross margin, 16% overhead and 4% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is 3 points below it. The CFOS target is 10%.
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.
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 demolition contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.