Trade Damage, probably the most important principle to learn in construction.
Years ago, I was a partner in my own painting business. We did mostly residential with a light spattering of commercial. We ran the gamut, everything from track homes to Ultra-High end Residential. We had come up from the field and actually did really well from 2004-2008. I learned the pains inherent from dealing with homeowners. It’s not something I wish on most people.
One of the major pains that most contractors deal with are the “never-ending” projects. As a painter, you are usually onsite before most of the finishes are installed. You want to be able to perform a majority of your work and not have to protect other trades finishes. By coming in right after the drywall you can paint an entire house as fast as your sprayer can atomize the material. You’re in, you’re out, and you’re off on the next project. The only problem is that your once perfect paint job, now has to survive all the rest of the finishing trades.
Now cue the cabinet guy putting holes in your walls, and the electrician moving the placement of a light fixture, or the carpet layer, scratching up the baseboard. Splatter from plumber’s solder, drywall patches, any number of surfaces getting either dirty or damaged from other trades performing their work. You come back to the job site, expecting some punch-list items and realize that you now have to repaint 90% of the house, and this time you have to cover all of the OTHER finishes to do it.
It’s something that you will deal with on every job site you work on. The purpose of this post is to help you understand:
- What is Trade Damage
- Trying to Avoid it
- How to Resolve it
I was recently in a meeting with a large GC for a project we are doing at a major metropolitan airport. They wanted to talk about the large amount of Time & Material tickets we were submitting. I explained to the Project Engineer (PE) that the T&M amounted to “Extra Work” because we were having to go back and repaint surfaces that had been damaged after we had finished the room. He honestly couldn’t figure out why we would consider it “Extra Work.” I explained the difference between touch-up (problems/deficiencies with our workmanship) and Trade Damage (Something damaged by another person/contractor) When he said to me: “But there was never technically any damage…” I realized that even with a massive GC (This one consistently ranks in ENR’s top 30) not everybody is clear on what is or isn’t trade damage.
So What is Trade Damage?
For a Painting Contractor, it’s pretty clearly defined. The P.D.C.A. has established industry standards that can be applied to almost any work performed. One of the major points it defines is:
2.1. This standard defines the repair and repainting of finished painted surfaces that have been damaged by individuals other than those employed by the painting and decorating contractor. This type of damage is defined as “damage caused by others.” Damage caused by others will be corrected by the painting and decorating contractor after a change order is received from the contracting entity.[PDCA P9]
What was happening on the project in question was The GC would send the drywall contractor in to fix deficiencies in their work after we had already finished our work. They would patch right over our finished surfaces. We would then be directed to go back and spot prime the patches and repaint those surfaces. There was a lot of push back from the GC as to why we were entitled to extra compensation. They argued that it should be considered Touch-up work, and went as far as to claim that we were not doing sufficient QC for the drywall contractor’s work. (Note: the P.D.C.A. also has inspection standards See P4 Section 5.1.1)
It took some explaining but eventually, they somewhat grudgingly accepted that we were correct. One major point in our defense was that we had been directed to complete our work before they had repaired any deficiencies in the existing surface. The GC Superintendent, the Inspecting Agent, and the Drywall Contractor had all verified that we could complete the work.
It may sound like a Dick move…Understand, this is not something you want to just drop on your GC or Subs, without some explanation beforehand. I know that the GC for a while felt like we were just out trying to screw the owner out of money. We had done everything in our power to lay the foundation for this. Trade Damage was defined in our Bid Proposal. In Multiple Pre-Mobilization meetings (Before we ever set foot on the Jobsite) We would discuss the difference between Touch-up and Trade Damage. We referenced the standards. But it still took a while for the PM team to understand where we were coming from.
It comes down to accountability. If we spill paint on the new carpet, we have to fix it. That might mean we have to replace it. There is no way around it. That is Trade Damage. It is correct to expect the same from everyone else on the job. Understand, you will have to have this conversation on every job, multiple times. Do it often, and do it early. Nobody ever knows who screwed up the painters work, but it’s blatantly obvious when the painter screws up somebody else’s.
Trying to Avoid it:
We know ahead of time that this will be a problem. We try our best to paint a clear picture when we are in talks about signing the contract. We add language referencing the P.D.C.A. standards in our contracts. We talk about it at the Pre-Mobilization meetings. Inevitably, you will still get treated like the bad guy. The important thing is to try and mitigate the damage before it happens.
We don’t want to have to come back and redo the work a million times. The markup for commercial T&M doesn’t even cover the hourly rate of the employees who have to organize, document, and submit the paperwork for a change that may not even come out to $500. So what can you do to try and avoid being seen as the guy out trying to stick it to everybody else?
- We have a system in place where our crew will come right after the Drywall is done and perform a full prime, and first finish. After this we relinquish the area to allow all of the other trades to install their finishes. When we go back to install the 2nd/final finish coat, they may have had to patch some minor dings or damage to the surface. We will then Spot Prime any new patches and apply the final finish as part of base contract work. (Yes, we now have to protect all of the installed finishes) In a perfect world this would amount to: zero trade damage. All it would take is to schedule enough time, between the first coat of finish and the final coat of finish to allow all other contractors to finish their work in between.
- Our Foreman will verify that they want us to paint the surface. We don’t play QC for the preceding subs, but if there are blatant deficiencies in the workmanship, we will point it out and make sure they want us to proceed.
- Most of our large contracts will have a certain amount of hours priced in (like a 500 hour allowance) that the GC can use however they want. “Oh, you want us to repair that room that got flooded by a sprinkler pipe and count it against your 500 hour allowance? OK!”
There is no such thing as a job where everything goes 100% as planned. It’s important to be upfront about it, and try to help stop it before it becomes an epidemic.
Is there a peaceful Resolution?
Not always. But there are things that you as a contractor need to do, to make sure you are covered in the case of trade damage.
- Make sure that Touch-up is clearly defined in the contract. We will add wording to the contract that references the P.D.C.A. Standards. By doing so we define the standard that our bid is based upon. (Yes we negotiate contracts before signing them.)
- Fill out some sort of Documentation for the extra work performed. It might be a Change Order Directive/Time & Material Ticket/Extra Work Request/etc. whatever your company uses, fill it out and get it signed to verify the hours worked and the material used. Get them signed daily. Some Superintendents will do ANYTHING to avoid signing the ticket. Draw a hard line. Our guys will explain that the signed ticket only serves to document the work. It may later be determined that it wasn’t extra work, and the ticket can be voided. A signed ticket will not only help in case of a claim, it is more likely to keep you out of court, because you have proof of the work performed. If we don’t get the first ticket signed, we WILL NOT perform any more additional work.
- Be honest with the GC/Owner. You are not going to get rich performing Trade Damage repair. You’ll be lucky to break even on your cost. Try and do everything to avoid trade damage in the first place. The party that gets back charged to pay for your re-work may be upset for a while after, but they will be much more careful the next time around.
- Most contracts will have a clause or item that charges you with protecting your work. It’s important to review the fairness of those clauses and revise them if necessary before you sign a contract. Understand that you have no control over anybody else on the job. You’ll have a hard enough time keeping track of your own employees, you can’t be responsible for somebody else’s too!
I know that there are a lot of owner and contractors out there that are losing money that they shouldn’t be. This is a very basic explanation of one example of Trade Damage. But it scales to every trades’ scope of work, on any project you might find yourself. Learn about it, be aware of it, and use it to help your career or business.