TELECOM · ELECTRICAL AND TECHNOLOGY · FIXED BY STEP 07

Month-Three Retainage Comes Back in Month Twenty-Four

You pulled cable in month three and saw the retainage on it in month twenty-four. In between, you mobilized four more times against the same lump sum.

WHY IT'S A TELECOM PROBLEM

A trade that mobilizes once has retention aging from one date and can chase it as one number. Yours ages from five separate dates, and the oldest dollar is the one that waits the longest and gets forgotten first. Every return trip is also a crew day and a truck day that a single lump sum bid usually assumed you'd spend once.

WHAT IT COSTS

The size of it

On a $600K subcontract that's roughly $30K to $60K held an average of eighteen months, and each unplanned remobilization burns a crew day and a truck day that was never in the bid.

OVERHEAD AT $1M–$5M

15%

CFOS target 14% for telecom.

GROSS MARGIN AT $1M–$5M

22%

CFOS target 24.5% for telecom.

NET PROFIT AT $1M–$5M

CFOS target 10.5% for telecom.

Retention on your month-three rough-in gets released by a closeout binder you can't deliver until month twenty-four. Telecom mobilizes with the framers for sleeves and pathway, again for cable pull before ceilings close, again for device trim after grid, again for rack build, and once more for testing and owner cutover: four to six discrete mobilizations across a two-year build, priced as a single lump sum. Five to ten percent comes off every draw including the earliest one, and release is tied to the last deliverable on the job. Your contract value is small next to mechanical and electrical, so the GC closes those packages first and you wait at the back of the line.

WHAT TO DO

Three moves, in order

STEP 01

Break the subcontract into the mobilizations the job really requires, and give each one its own schedule of values line and cost code.

STEP 02

Age retention by job and by draw date on the monthly review, so every old dollar has a date, a job, and someone to call.

STEP 03

Bid a stated number of mobilizations and write the trigger for a change order when the GC's schedule pushes you past it.

THE FIX

Step 07: Monthly cadence

Weekly bookkeeping, cost to complete, and one CEO report, on the same days every month.

CFOS-07 · CHAPTER 7

The monthly close that takes a contractor 5 hours

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

BENCHMARKS

Telecom 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

Profitable on the P&L, out of cash

Your P&L says you made money and your bank account says you didn't. Neither is wrong.

SAME TRADE

What else costs telecom contractors money

TELECOM · CFOS-01

You Pay the Pole Owner Months Before You Hang Strand

You cut a check to the power company in March for work your crews don't perform, and the first foot of strand goes up in August. In between there is nothing to bill.

TELECOM · CFOS-06

The Inspector's Signature Starts Your Pay Clock

Twelve thousand feet went in the ground in June and the invoice didn't move until September. The crews got paid in June.

TELECOM · CFOS-06

A Pre-Term Trunk Cut Wrong Is Scrap You Own

Pre-term trunks run eight to twelve weeks and get cut to a number you took off the ceiling grid. Miss the number and you own an assembly no one can use.

TELECOM · CFOS-08

Links Fail in November, Cable Was Crushed in April

Forty links fail at certification in November. The HVAC crew crushed them above the ceiling in April and demobilized in June.

TELECOM · CFOS-02

Standby Days Cost What Bore Days Cost

You get paid per foot. The bore rig, vac truck, and four-man crew cost the same whether you shoot 1,200 feet or wait all morning on a locate that never got marked.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CIVIL

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.

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.

QUESTIONS

What telecom owners ask

How long does a low voltage sub wait for retainage on a two year build?

You pulled cable in month three and saw the retainage on it in month twenty-four. In between, you mobilized four more times against the same lump sum.

What does it cost?

On a $600K subcontract that's roughly $30K to $60K held an average of eighteen months, and each unplanned remobilization burns a crew day and a truck day that was never in the bid.

What do I do first?

Break the subcontract into the mobilizations the job really requires, and give each one its own schedule of values line and cost code.

What are telecom contractors supposed to be making?

Telecom runs 22% gross margin, 15% 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 07, monthly cadence. Weekly bookkeeping, cost to complete, and one CEO report, on the same days every month. It comes from chapter 7 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 telecom contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.

What a fractional CFO does for telecom contractors

AUTHOR

JOSH LUEBKER

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

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