ASA has both a short form addendum for limited scope projects as well as a full addendum. They both do exactly the same thing: modify the terms of a general contractor's boilerplate subcontract form so that it is modified to be more fair and reasonable by inserting favorable contract language into the relationship. Both addendums provide that the terms therein take precedence (or control) over conflicting terms in the general contractor's boilerplate language. This aspect is essential since it is certain that language in the ASA Addendum will conflict with some of the most one-sided, unfair terms found in almost all general contractor boilerplate language. Finally, both the short form and full addendum eliminate some of the same unfair terms, including broad form indemnification, listing of additional insureds, waiver of subrogation, no damages for delay, and pay-if-paid. Combined, the elimination of these terms will help to "level the playing field."
The best way to use the ASA Addendum is to sign and forward it under a cover letter to the general contractor, stating that the attachment includes proposed revisions to their subcontract. Request that they review the terms and contact you to discuss. Be aware that the Addendum does not incorporate your bid proposal by reference. As a consequence, your scope of work must be included on the front of the form or as an attachment.
The art of negotiation begins with staking out a position, regardless of what the parties are negotiating about - whether cars, homes, or terms and conditions for a construction project. To be successful, you must follow these steps:
1. Read the subcontract carefully and understand the impact of key provisions.
- Contingent payment may be more important than change orders.
2. Prioritize the provisions most important to you.
- If you anticipate possible delays to your work, you'll want input into the schedule and the right to an equitable adjustment of time and money.
3. Discuss proposed revisions from a position of knowledge and strength.
- Know what effect certain terms will likely have on you.
4. Analyze the changes/revisions the general contractor agreed to as well as those rejected.
- What changes did he consent to?
- What is overall impact?
5. Do a cost-benefit analysis.
- What are the risks?
- How much profit in the job?
- Is this an opportunity for profitable future work?
- Are you willing to assume the risks?
- Should you pass on this project?
In the final analysis, a successful trade contractor will try to use the ASA bid form and addendums in an educated effort to obtain and complete successful, profitable projects. Remember: you need profitable work, not just "work." Use these ASA tools as a means of becoming as professional in your business management as you are in the actual work you perform. If you do, your company will stand out from your competitors and profits will increase.
Michael P. Davis is a shareholder in the Atlanta office of Chamberlain, Hrdlicka, White, Williams & Aughtry. His construction law practice is centered on representing a wide range of trade contractors, prime contractors, owners/developers and design professionals. His work focuses primarily on construction contract disputes in state or federal courts, as well as arbitrations and mediations throughout the United States.