I need help with subcontracting

Discussion in 'Business Operations' started by MJK, Feb 4, 2008.

  1. MJK

    MJK LawnSite Senior Member
    Messages: 356

    Ok, lets say I need to subcontract fertilizer, pesticides applications. I have a company that just does applications, how do I go about doing this? Kind of a dumb question but I have never subed anything out before and need help from those with experience. Also how do you do the contract work? Does the application company give you the price, you put the price in a bid, and then give it to the property manager? Then do you and the application company sign a contract? Thanks for the help.
  2. gene gls

    gene gls LawnSite Gold Member
    Messages: 3,213

    I sub my ferts out. I just called the company that I wanted doing my properties and asked to meet with who ever was in charge of the fert in my area. We met, looked over my properties, he set up service schedule and prices as to my cost. I added 5% to my customer contract when I worked up the contract. They do the work, bill me, I bill my customer, and wait for the customer to pay.
  3. LB1234

    LB1234 LawnSite Gold Member
    Messages: 3,208

    We used to sub out our pesticide/fertilizer applications. We since got our license and now do it ourselves.

    Anyway, when I subcontracted I contacted my insurance company. They asked to see the insurance certificates. They wanted to know that their GL was at least as high as hours, they were covered specifically for pesticide/chemical applications, AND they had workmans comp. My agent informed me the workmans comp isn't a huge deal seeing as I had it already. However, if this company didn't have WC I would be paying to cover them under my WC policy. In addition to all that stuff my agent set me a hold harmless agreement that the subcontractor should sign. They did no questions asked.
  4. Albery's Lawn & Tractor

    Albery's Lawn & Tractor LawnSite Bronze Member
    Messages: 1,674

    I actually am talking to chem lawn doing my apps this year. I know a couple of the spray techs and they seem to be fairly knowledgeable. They are the only company in town that can give me enough of a deal to justify subbing it out. It's got to the point where I can hire them, add say 5-10%, and it's still less then we can buy the supplies for. It's sad, as big on an area that we have we don't have a decent supplier near by.
  5. gene gls

    gene gls LawnSite Gold Member
    Messages: 3,213

    I started subing with C/L, nothing but problems. They had a cheap price, but they didn't put enough product down to do any good. Keep an eye on them.
  6. LB1234

    LB1234 LawnSite Gold Member
    Messages: 3,208

    I 100% agree with gene gls. They made me look terrible...although I had lawn doctor...which I believe is a brother company or something. This is what I couldn't stand....

    I get a call from the customers...you didn't blow off my sidewalks. So I'd call up and complain...it was useless. It would get done for the next application and then forgotten again. Next, since I maintained the lawn I could get a good idea of when things were starting to take a turn for the worst. I would call and say lawn a has a broadleaf weed problem, lawn b is starting to get a fungus, etc. They would say okay. There process involved the following.
    1. You call them to tell them about a problem
    2. They call you back (after a day goes by) and says they created a ticket
    3. Takes them 4-5 days to get out to the site
    4. Takes them another day to get back to you a report there findings
    5. They then set up yet another ticket
    6. You get a phone all stating they will be there next week.
    7. They finally show up
    8. They inform me of the application and say to call in 2 weeks to inform them of the problem.

    Guess what? Yep had to call them again because there broadleaf weed control wasn't that effective. So now we have to start the whole process over again...aarggggghhhhh:hammerhead:
  7. grass-scapes

    grass-scapes LawnSite Bronze Member
    Messages: 1,552

    Thats how their policy works....Get the money before the customer gets wise. Then on to the next sucker.
  8. Team-Green L&L

    Team-Green L&L LawnSite Bronze Member
    Messages: 1,775

    We sub a lot of work out also and it burnt us last year. I figured I'd share my story here for reference:

    We subbed all our fert work to a company that was moving into that industry only and in return we were subbed all their maintenance work. In the end we paid them on time (according to the contract) and they did not pay us at all. Our agreement bound us to the services regardless of payment and we had to bear that financial overhead burden for almost a full year before they paid up to avoid the inevitable lawsuit that was coming their way within days.

    Just to give a little guy a glimpse of how bad this could hurt you. We had over $12,000 in labor, fuel, and other expenses out on that deal and the outcome could've been a lot worse.

    My advise: Have an agreement that covers yours butt solid. We actually paid our attorney to draft a sub agreement to avoid any future issues.
  9. MJK

    MJK LawnSite Senior Member
    Messages: 356

    So you guys all have your attorneys draft up an agreement between you and the sub contractor?

    Also do you guys have to be licensed in the area you sub out?
  10. LB1234

    LB1234 LawnSite Gold Member
    Messages: 3,208

    I did not go the route of having my attorney draft a subcontract. Basically they provided a price including X-applications and there warranty. I signed, they billed me, and I then billed the customer. However, I did have my attorney review (and edit) the hold harmless agreement.

    Looking back, I lost more money than I made on the subcontracts after I factored in my time and sometimes (my labor) to clean up after them. Not to mention how bad it made our company look. We didn't lose any of the customers but I got an earful from a bunch of them.

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