Electrical Division in Large General Contractor

[SparkyEst.]

I currently work for a large general contractor, and this general contractor has an excavation division, electrical division, concrete division, and carpenter division. As the lead of the electrical division I have been awarded a lot of jobs based on early budgeting/conception to implementation. We do a lot of design builds, so I also do a lot of preliminary/final electrical design to get approved and stamped by engineer. That's a quick synopsis/background.

Here is my question for guys in the same boat, or may have insight, typically if I were a sub-contractor the GC, and the owner or GC made changes I would have change orders processed accordingly. In-house makes that a bit difficult because as the GC our project manager may see the job doing well and decide to hold back the CO to customer and eat the cost themselves. Where that lies a problem with me is that it doesn't then report on the job cost reports I do because there was never a final CO to customer and then it doesn't get entered into my reports. Has anyone else ever had this issue and if so how did you handle it?

Right now I am currently making a excel spreadsheet log of all changes and if I see one that is approved, but doesn't show up on job cost reports then I make note. Ultimately when the owners look at the final cost for the job and see's electrical "lost" or was "over" budget because of the unreported changes by the project manager I essentially have to "throw" them under the bus. I am looking for advice to possibly smooth this transition out and figure a way to get that information across the board, without seeing the customer end of it.

Does this make sense and what are your thoughts?

 

[cdslotz]

Are you on salary? If so, why do you care?
Your boss will always cook the books in their favor.
You track the real numbers, so you know your pricing is correct.
This will come in handy when they kick you to the curb for speaking out

 

[hillbilly1]

I worked for a company like that in my early years, they were an umbrella corporation. They had a general contracting, fire sprinkler division, electrical division, hvac division and a fixture manufacture division. We seldom did work for the general contractor division, because they could look at our books and know what were making on a job. The gc division then would try to beat us up on pricing. Since they were under the umbrella of the main corporation, we did not have to work for them.

 

[hillbilly1]

Almost forgot, they had a property division too!

 

[brantmacga]

Are you on salary? If so, why do you care?
Your boss will always cook the books in their favor.
You track the real numbers, so you know your pricing is correct.
This will come in handy when they kick you to the curb for speaking out

I would care. And I would track any lost income to the division from lack of change orders. When it’s time to ask for a raise, if there are questions about performance of the division, I would want to be able to show how the employer caused a loss to my division.


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[Coppersmith]

There's nothing wrong with the company deciding to eat the cost of a change. There are lots of reasons to do so. However, they need to record the actual cost of doing the job or they are fooling themselves into thinking they are more profitable than they really are (or distributing the costs among divisions incorrectly). No good can come of that. I suggest having a talk with the head of cost accounting at your company and see what this person thinks of the situation. If you gain an ally, you can talk to the big bosses together. If the accountants are an outside firm, speak to the big bosses first and let them decide if they want to go to the accountants for advice.

 

[Hv&Lv]

As lead of the division, I would say TRUE job costing is your responsibility.
I do that where I work. I keep the true costs, the accounting depts and VPs can hash out what to do with the numbers.
Whether or not to transfer or true up these costs within divisions is the jobs of the higher ups.

 

[cdslotz]

I would care. And I would track any lost income to the division from lack of change orders. When it’s time to ask for a raise, if there are questions about performance of the division, I would want to be able to show how the employer caused a loss to my division.


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I said he should keep tracking just for that purpose. He can have leverage if it comes to a head.
We also don't know if he is the Master for that division....even more leverage

 

[SparkyEst.]

This is a very insightful thread. It seems as if most people would agree that keeping tabs on my own and presenting the owners the information when asked. It is just very difficult as I see how other sub-contractors are dealt with and for me I have to watch my back. It's a very difficult situation but as a growing business entrepreneur I am taking this learning and growing from it, because at some point this will all be another family business that doesn't make it out of the "second" generation of owners. I have done some research and find that most family run businesses run for about two or three generations before falling apart due to greed and the inability to continue to strive for customer service and quality. A lot of that has to do with integrity and ethics within the family structure, where most people end up putting business in front of family which causes rift and leads to the next generation exiting or leaving because of that dynamic. Interesting topic!