Spring 2012
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| Mission critical — Prequalifying subcontractors important in today’s economy | |
 | Prequalification is one of the most effective strategies for minimizing the risk of subcontractor failure. This process benefits subs, as well, by providing them with a competitive advantage once they’ve made the list. This article discusses the specific information that’s required in the prequalification process, and explains that Web-based prequalification networks offer significant benefits for general contractors and subcontractors alike. A sidebar lists examples of red flags that may signal potential subcontractor failures or defaults. Read More |
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| Asking the right questions about your profitability | |
 | In today’s economy, contractors must take any threat to their profitability seriously. Regularly asking the right questions about their profitability can help them keep their guard up. This article offers a few to consider. They involve keeping track of indirect costs, managing receivables and payables effectively, and addressing change orders properly. Read More |
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| Owner compensation: What’s reasonable? | |
 | Controlling owners of closely held construction companies are generally free to set their own salaries and bonuses. But, under certain circumstances, the reasonableness of owner compensation can become an issue. This article examines a U.S. Tax Court case that outlines five factors to consider in determining whether a corporate shareholder/employee’s compensation is reasonable. Read More |
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| Contractor’s Toolbox — Beware of the invisible contract clause | |
 | Contracting with federal and state government agencies requires careful planning — especially when a public construction contract is involved. Not only can these documents be lengthy and complex but, in some cases, “invisible” mandatory contract clauses may be treated as part of the contract even if they’re not included. This article references a long-standing court case in which, following a contract termination, a contractor’s lost profits claim was rejected because the court presumed the contractor to be aware of a clause that wasn’t actually written into the contract. Read More |
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This publication is distributed with the understanding that the author, publisher and distributor are not rendering legal, accounting or other professional advice or opinions on specific facts or matters, and accordingly assume no liability whatsoever in connection with its use. ©2012 • CIAsp12 | |