Your rental line is funding the GC's cash for two years
The GC holds ten percent of your monthly rental invoice the way they hold it on installed work, and keeps holding it until the building is done. Nothing on rent waits to be completed.
Scaffolding is the only trade that bills three different economic events off one subcontract number: a labor scope, a time-and-materials asset charge, and a second labor scope months or years later. Every other sub on the site either installs something permanent or rents something and leaves, so the sub form was never written to separate a rental month from work in place. Scaffold is first on and last off, so the retainage clock on your rent runs longer than the retainage clock on anybody else's contract.
The size of it
On a 20-month facade job, ten percent of eighteen months of rental billings is often the entire net profit on that job, parked in the GC's account for two years while the payment on that same steel comes out of your account every month.
Rental is a consumed time charge, so there's no punch item, no warranty callback, and no completion event for a holdback to attach to. The standard sub form doesn't make that distinction: it reads erect labor, monthly rental, and dismantle as one scope of work in place, and the GC's accounting group applies the same 5 to 10 percent to all three lines starting with the first month's billing. Scaffold goes up before the mason starts and comes off after facade punch, caulking sign-off, and shed removal, so the hold runs the full calendar of the job and not some slice of it. The equipment rental house that dropped a boom lift on the same site invoices monthly and gets paid net 30.
Three moves, in order
Step 01: Job cost structure
Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words.
What else costs scaffolding contractors money
The same mechanism in other trades
What scaffolding owners ask
Can a general contractor hold retainage on scaffold rental invoices?
The GC holds ten percent of your monthly rental invoice the way they hold it on installed work, and keeps holding it until the building is done. Nothing on rent waits to be completed.
What does it cost?
On a 20-month facade job, ten percent of eighteen months of rental billings is often the entire net profit on that job, parked in the GC's account for two years while the payment on that same steel comes out of your account every month.
What do I do first?
Split the subcontract into three separate lines in your schedule of values at award: erect labor, monthly rental, and dismantle. One number invites one retainage rate.
What are scaffolding contractors supposed to be making?
Scaffolding runs 26% gross margin, 18% overhead and 8% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is 1 point above it. The CFOS target is 11.5%.
Which part of the system fixes it?
The step is number 01, job cost structure. Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words. It comes from chapter 1 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 scaffolding 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.