Your Last 20% Waits Behind the Owner's IT Department
Everything is mounted and terminated, and none of it works until the owner's IT group cuts the VLAN. The job parks at 90 percent complete with the contract tail on your balance sheet.
The Division 28 head-end lives on the owner's network, so cameras, controllers, the VMS, and the access control server all need IP addressing, a dedicated VLAN, PoE ports, firewall rules, AD service accounts, and often a cybersecurity review before you can program one device. Every one of those belongs to the owner's IT department, a group that signed no contract with the GC and has no schedule obligation or liquidated damages exposure, so the GC can neither accelerate them nor extend you for them. Every other trade on the job finishes when its own work is finished, while you finish when somebody else's network engineer finds time.
The size of it
The final 15 to 25 percent of contract value plus retention stops at 90 percent complete with no schedule remedy. On a $400K job that's $60K to $100K of earned work held as underbilling while you cover payroll out of pocket.
Get the network cut onto the GC's schedule as a dated deliverable with an owner IT contact attached to it, and split your schedule of values so physical completion releases physical money. Most integrators bill one line that says install and commission, which lets the GC hold the whole tail hostage to a network engineer who has never seen your contract. Send a written requirements packet at buyout listing VLAN, IP scheme, PoE port count, firewall rules, and service accounts, with a required-by date, and log the day you sent it. Then count the days from that request to the VLAN cut on every job and put the count in front of the GC in writing every month it grows. Documented request plus measured delay is the only leverage that exists here, and it's the difference between a schedule conversation and absorbing four months of cost that never gets acknowledged.
Three moves, in order
Step 06: Project management
Billing dates, change orders, and notices, written as standards that work without anyone following up on them.
What else costs security systems contractors money
The same mechanism in other trades
What security systems owners ask
Can't commission access control until owner IT sets up the VLAN?
Everything is mounted and terminated, and none of it works until the owner's IT group cuts the VLAN. The job parks at 90 percent complete with the contract tail on your balance sheet.
What does it cost?
The final 15 to 25 percent of contract value plus retention stops at 90 percent complete with no schedule remedy. On a $400K job that's $60K to $100K of earned work held as underbilling while you cover payroll out of pocket.
What do I do first?
Split the schedule of values so device install and termination bill separately from commissioning, and get it approved before the first pay app.
What are security systems contractors supposed to be making?
Security systems has 22% gross margin, 16% overhead and 6% net profit after taxes at $1M to $5M. The all-trade average is 7%, so this trade is 1 point 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 following up on them. It comes from chapter 6 of CONTROL: C.F.O.S. Construction Financial Operating System.
Everything on this page is something you can install yourself, and CONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for security systems contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, led by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.