Something has been troubling me lately. I am seeing contracts that are requiring a 30-45 day payout and a 10% retainage to be held for 6 months to a year. I understood this practice in Florida during the hurricanes because the Cable Companies where overwhelmed and needed the time to process the flood of invoices they had coming in and they wanted to make sure the work was being done and being done properly. However under normal circumstances this is not normal. I am calling on all small operators to challenge this in the contracts that you are considering signing. There is no need for both. If a Cable company has a slow accounting process then they will require a 30-45 day payout, but that should be plenty of time for them to inspect the work that was done and approve the invoice. On the other hand if they can approve invoices within a couple of weeks then they should keep the 10% retainage but only for a month or so. When you sign a contract allowing a Prime Contractor to hold a retainage for 6 months to a year AND payout 30-45 days they are simply collecting intrest on YOUR money. The only way this will change is if we collectively challenge it.
The Prime Contractors became comfortable with this practice and aren't going to change it unless they have to.
Prime Contractors IF you are signing contracts with the Cable Companies with this claus, then you need to challenge it with them. It is becoming increasingly difficult for the smaller operators to be able to sustain under these circumstances. Cable Operators need Prime Contractors for additional manpower for projects that they don't want to have to hire in house people for. Prime Contractors need the smaller Contractors for the same reason. So we all need to work together to keep each other in business.
