PLUMBING · MECHANICAL AND LIFE SAFETY · FIXED BY STEP 08

Every Leak Comes Back to Your Job Cost

The concrete crew knocked the stub-ups off layout, somebody put a drywall screw through the copper, and the backcharge still comes to you.

WHY IT'S A PLUMBING PROBLEM

Plumbing installs early, stays in everyone's way for months, then disappears inside the building while other trades work directly on top of it. That combination of long exposure and total concealment belongs to piping, and it means your damage gets discovered at the worst moment by the worst symptom. The general contractor takes the shortest path to a dry building, and that path runs straight through your invoice.

WHAT IT COSTS

The size of it

Cut and patch, repair labor, and sometimes mitigation get absorbed as a cost of doing business on a job that already billed. No change order gets raised, no claim gets filed against the trade that caused it, and the job's real margin drops after everyone stopped looking at it.

OVERHEAD AT $1M–$5M

16%

CFOS target 15% for plumbing.

GROSS MARGIN AT $1M–$5M

25%

CFOS target 27.5% for plumbing.

NET PROFIT AT $1M–$5M

CFOS target 12.5% for plumbing.

Every leak gets charged to the plumber, and the general contractor will tell you to go chase whoever caused it. Stub-ups get knocked off layout by the concrete crew, roughed in copper takes a drywall screw or a mechanical hanger, and tube walks off the site because it's the only material on the job with real resale value. Set fixtures get chipped by the tile crew or used as a step ladder. Once the walls close there is no proving who did any of it, and the sub you would have to pursue is one you still want to work alongside next year.

WHAT TO DO

Three moves, in order

STEP 01

Photograph every rough in wall and floor before cover with a tape and a room number in frame, and store the folder somewhere the office can find it two years from now.

STEP 02

Send a same day damage notice to the superintendent with the photo, the location, and the responsible trade written in, every single time, even when the repair takes an hour, so the history exists in writing.

STEP 03

Open a damage and rework cost code, charge every repair to it by job, and bring the total to the monthly meeting so that history gets priced into the next bid with that GC.

THE FIX

Step 08: Standards and accountability

Five hours a month of owner time, spent projecting the work.

CFOS-08 · CHAPTER 8

Five hours a month, spent projecting the work

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

BENCHMARKS

Plumbing 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

PMs aren't accountable for margin

Your PMs are measured on schedule and on the client being happy. No role in the company is measured on the number at the bottom.

SAME TRADE

What else costs plumbing contractors money

PLUMBING · CFOS-06

Your Water Heater Deposit Goes Out Eight Months Early

The domestic hot water plant is 30 weeks out, the rep wants a big number at release, and the unit doesn't get set until the mechanical room is finished at the very end of the job.

PLUMBING · CFOS-06

Concrete Is Booked Thursday and Inspection Opens Monday

The underground is holding test and ready to cover, the pump truck is scheduled, and the inspector's first open slot is after the pour date.

PLUMBING · CFOS-04

Copper and Resin Move Apart and Your Bid Covers One

You bid copper in March, bought it at buyout in September, and the escalation language you fought for only protects half the scope.

PLUMBING · CFOS-07

You Earn It in Month Two and Collect in Month Twenty-Six

You were in the dirt before the steel got there, and you'll see that retention when the building opens.

PLUMBING · CFOS-01

You Restart the Job Five Times and Price One of Them

Site utilities, underslab, rough per deck, top out, trim, and final test are six visits, and the estimate priced one mobilization.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CIVIL

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.

CONCRETE

Six Trips Back for Pads and Sidewalks, One Unit Price

You were first on the site and you're still coming back for stairs, pads, curbs, and exterior flatwork, all priced inside a per-yard number that assumed you never left.

DRYWALL

You Go Back Six Times And No Ticket Gets Signed

You hung the corridor in March and you're still sending a guy back in June, one hole at a time, on somebody else's dime.

QUESTIONS

What plumbing owners ask

How to push back on a plumbing backcharge another trade caused?

The concrete crew knocked the stub-ups off layout, somebody put a drywall screw through the copper, and the backcharge still comes to you.

What does it cost?

What do I do first?

Photograph every rough in wall and floor before cover with a tape and a room number in frame, and store the folder somewhere the office can find it two years from now.

What are plumbing contractors supposed to be making?

Plumbing runs 25% gross margin, 16% overhead and 9% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is 2 points above it. The CFOS target is 12.5%.

Which part of the system fixes it?

The step is number 08, standards and accountability. Five hours a month of owner time, spent projecting the work. It comes from chapter 8 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 plumbing contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.

What a fractional CFO does for plumbing contractors

AUTHOR

JOSH LUEBKER

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

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