How to Avoid Common Submittal Mistakes & Get Paid Faster

Ever feel like understanding submittals is important to your job, but you’re always expected to learn on the fly? Did you know some subtle but common mistakes can lead to losing the right to get paid?

Join this webinar to hear from construction coach Amy Powell, a.k.a. The Girl in the Hard Hat on YouTube how to master submittals and avoid mistakes that delay payments.

Find out:

• The building blocks of the submittal process
• Common situations that impact lien deadlines
• Streamlined practices to get the job done & get paid faster

Transcript

Jonny Finity: (01:47)

Okay, well let’s go ahead and get started. We will be recording this webinar. So for anyone that shows up late or is unable to attend, or for everyone on this webinar, we’ll be sending out the link after it’s over. So to be able to go back and rewatch any parts that you met. So thanks for joining us today. My name is Jonny Finity. I’m the Content Manager at Levelset and I’m joined here today with our speaker Amy Powell, also known as the Girl in the Hard Hat and the founder of Well Works, who provides leadership training for construction businesses. So I’ll let her introduce herself in a moment, but first I just want to quickly go through our agenda.

Jonny Finity: (02:40)

Today we’re talking about submittals, so Amy’s going to walk through the submittals process from start to finish. She’ll cover some common problems and mistakes that caused delays, why you should be improving this process on a continual basis and how to take your submittals to the next level. And we’ll talk about a few ways that submittals affect your payment process and your ability to actually get paid for the work you do. If you have any questions throughout this webinar, feel free to use the chat function or the Q&A and we’ll cover those questions at the end of this webinar.

Jonny Finity: (03:17)

So first a little bit of background for those of you who aren’t familiar with us, Levelset helps contractors and suppliers get paid faster and reduce the stress of managing their payment paperwork. We publish payment data on Contractor Profiles with thousands of contractors across the country that helps with prequalification before you sign a contract and helps you spot payment problems with the customers before they actually affect you. But we also have a great community of national construction lawyers and payment experts who are standing by to answer any questions you have about lien laws, payment problems, and anything like that. With that, let me turn it over to Amy.

Amy Powell: (04:07)

Awesome. Thank you, Jonny. Thank you. Levelset for what you do for our industry. It’s very important. So, who is Well Works? We are leadership training built for construction. Again, I’m Amy Powell. I’m also The Girl in the Hard Hat, which is a YouTube channel. And both of these are really geared towards the people in our industry, our greatest asset actually. So we kind of hit on those top industry challenges and work with the people, since we don’t ever get people’s skills, we always seem to get processes and procedures skills, but never those people’s skills of how to deal with conflicts approaching and resolving difficult conversations and conflict. So, that’s what we’re here to do in the construction industry.

Amy Powell: (04:53)

So we’ll talk about submittals today. And a quick background. So I was with the general contractor for 13 years with the mechanical contractor for two years and with a high-end residential for two years. So I’ve been in industry for quite a while and from the general contracting standpoint. So all of the submittal process today will be brought to you from what our perspective is and our viewpoint as a general contractor, and this entire process. So this is the quick process we’re going to go through.

Learn more: Understanding the submittals process in construction

Amy Powell: (05:28)

So as soon as we get informed that we have won a project, we then inform our subcontractors and suppliers that, that we have hired, and then send out LORs if you won the bid or if you’re going to be working on the project, otherwise our letter of intent. And so our intent with this is to get you going on your submittals and that we’re going to start the contract process. We got to draft it. We got to make sure the exclusions and inclusions are all set up properly. While this is happening, when that is to you saying, Hey, can you start your submittals? Cause we got to get this going early on in a project. We are building a submittal log based on the specifications and the drawings, because that’s where you can find all the information about what we are required as a team to submit to the ownership group on products on these submittals and drawings.

Amy Powell: (06:13)

So you may get a call during this process asking for fabrication or detailing time, but also lead times and delivery challenges. If there’s a holdups in the factory, if there’s a manufacturing defect that’s or they’re backed up whatever that information is very helpful one and getting your contract dates, correct. But also the schedule and making sure when do we have to have submittals in when we have to have them back when we have to get them back to you to get going so that we stay on schedule and we’re all on time as a project. All right, next slide. Thank you. All right. So at this point, when you get that LOI, the subs and the suppliers are creating their submittals. Some of them are drafting. Some of them are designing. Some of them are shop drawings, but some of them are just the majority of them are just product data, sheets, samples, and certificates, certificates being like weld certificates.

Amy Powell: (07:06)

With this there’s also the substitution requests. And so substitution requests are when we are submitting on something outside of the specified manufacturer in the specifications. And so this can mean, you know, where it will say have a certain brand or certain manufacturer. And then it says an approved alternate. This is our invitation to submit something different or better based on our experience and our knowledge. But we do typically need a substitution request with that. And this entire process can typically be found in division one and sometimes even a form that the tricky part about substitution requests is if you bid on something that’s lower cost than what was actually specified, then that is, that is your risk. If it’s not approved by the architect and they say, Nope, you gotta, you gotta provide this and it ends up being more money. That’s your cost?

Learn more: How to make a substitution request

Amy Powell: (07:59)

That’s your risk? So trying to get that approved earlier, or just making sure that whatever was bid is, is specified that’s important. In addition to this, we have to be able to justify why it is of equal or better value than what’s actually specified. And again, that’s the tricky part. If it’s a lower cost, that cost typically is required to be then transferred. That difference is then required to be transferred over to the architect or the owner they’re expecting that money back. But again, equal or greater value. That value is a very loose term because who’s what is value and it, and that’s determined by the architect and the owner value could mean the quality. It could mean cost. It could mean time to get the material. It could mean environmental aspects, whatever. So just be careful with those substitution requests.

Amy Powell: (08:52)

Those are our biggest challenges in the submittal process. But once we get those from you, we then as the general contractor are reviewing it for compliance, this typically takes anywhere from one to five days, depending on how, how much information it is. And if it looks good enough, there’s a few questions or there’s a few changes, then we’ll send that on. If it’s completely wrong, we’ll send it back to you and say, sorry, try again. We won’t even send it right onto the architect. All right. So, in the submittal review, so now it’s in the architect of the consultants and sometimes the owners hands, uh, determines who we send it to based on who wants to see these, who needs to review them. They typically get 10 working days.

Amy Powell: (09:37)

That’s two weeks, that’s a large amount of time. It might be fine if it’s paint at the end of the project and there’s no lead time, but if there’s a lead time and it’s going to affect our schedule, we’ve determined this as a team. We need to be aware of that so that we can communicate it to the architect or the consultant asking them to make it a priority or asking them to expedite that. So then we can get it back and get stuff going and stay on schedule. So once it’s returned to us, we quickly just send it right back to you. That typically takes a day is just whenever we could get to our email quick enough. But they are returned as approved, approved as noted or make corrections noted. That typically means you’re good, make, make changes, but still go keep moving forward. It’s rejected or revise and resubmit. We got to start that entire process over and it can take up to two weeks again. You can see the time commitment on this. So really spending the time. This is a part of the quality process, really spending that time to make sure that those submittals are quality is very important. All right, next slide.

Amy Powell: (10:41)

All right. And then again, uh, get to work or please get to work as I would say, but if, again, if the submittals are approved, we can start ordering materials so we could start manufacturing. We could start,  you know, whenever the schedule permits, we can start installing that communication with the superintendent, uh, is pretty important that that part does gauge. When does he need the material? When does she wants the material? Is there room on site for the material and just starting that coordination process? Am I good to go? Perfect. Let’s do this. Let’s go. All right. Next slide. Common submittal mistakes,  poorly time and scheduling. It’s not, it’s not as much lead time and scheduling as it is getting your submittals in early. I don’t, I don’t care if you were the marker board supplier at the very end of the project, we try to get all of the submittals in at the very beginning of the project to get it out of the way.

Amy Powell: (11:34)

So we don’t have that unforeseen unknown. How long is this going to take,  give the architect as much time to make a different decision in, in options as possible. So we want those decisions. We want to get that out of the way so that when we’re ready to order, we can order it gets there on site. It gets installed on site on time, not clearly identifying what will be used. So within product data, I typically see this with metal stats.  there’s just lists and lists of different gauges. What do you plan to use? Typically there’s a certain gauge at doorframes. Sometimes it’s different on the exterior than the interior. So just circling or highlighting which ones you’re using based on what is specified. That’s a very important piece. What has huge list of different things? Which one are you using on this site?

Amy Powell: (12:21)

That is the biggest thing that we, you see that’s missing, uh, using unapproved substitutions again, kind of went through the substitution process, but using a material that has not been approved officially by the architect that can result in some major, major, uh, charges and rework,  tearing out drywall to get to mechanical installation because it wasn’t correctly.  it wasn’t installed per the specifications, whatever. So being very transparent in those substitutions is important proceeding. Without submittals, this one gets sketchy.  I really don’t like to do this. Sometimes it happens, but it takes a lot of communication, documentation and agreement,  between the teammates of the, you know, the GC and then the supplier, the subcontractor, this doesn’t happen very often. I really do not like to do this. I really strongly just push the approval of the submittals more than anything. There’s something called submittals parties, where everybody just comes and reviews it in one day just to get it out to everybody.

Amy Powell: (13:25)

So it can happen. It’s out there, it exists. And then the last part is close out documents. This isn’t typically,  thought of as a submittal, but it is still a submittal. It’s just at the end of the project, but not getting these close out documents. We don’t get paid if we don’t have these close out documents. So,  if you’re holding this up, we won’t get paid. We can’t get you finally paid. So when you see that first request or even send it in within three months of the end of the project, just get it in quickly, just get it done. And then it’s out of the way as well. All right, Johnny, thank you. You’re up.

Jonny Finity: (14:00)

Well, so I just wanted to cover a few of the ways that submittals intersect with the payment process. Obviously any schedule or job site delay can have an impact on your bottom line and your cashflow. So there’s a few ways that submittals affect your right to get paid and the timing of your payments. So just go through a few of those, your billing deadlines, obviously the submittals process is part of your contract. So it’s really important to read your contract in full at the beginning before you even start any work on the job to understand what your contract says, especially when it comes to the submittals process. Uh, in some contracts, your billing deadline will be based on the approval of your submittals. Sometimes suppliers won’t be able to bill until the submittal is actually approved. So any delay in the submittals process can delay your payments and hurt your cashflow, change orders.

Jonny Finity: (14:57)

You know, if you had a submittal that was improved, but then the architect or the owner changes the specs or you get to the job site and the site conditions are different than what was in the contract. It’s so important to get a change order for anything that’s outside of the scope of work that was in your original contract. If you have to create a new submittal, uh, based on those spec changes, submit a change order and get it in writing before you actually do any of the work, uh, to create that submittal or order the material.

Learn more: A contractor’s guide to change orders

Amy Powell: (15:27)

Absolutely. And Johnny, with that there’s some times the architect or the engineer will actually request something completely different in the submittals and then expect you to, just to just go without changing the actual contract documents, that is also a trigger to know you need to change order for that. It needs to be through an ASI or an RFI or spectra, whatever it is. The submittal process is not a time to, to make contract document changes from the architect and owner standpoint, down to the subcontractors and suppliers.

Jonny Finity: (15:59)

So essentially anything that is not in your contract originally, that’s going to affect your cost or the schedule needs to have a signed change order to go with it.

And then, you know, especially for sub subcontractors inspires anyone that doesn’t have a contract directly with the GC, don’t assume that just because your company’s name is on the submittal, that the GC knows who you are, what materials are providing, what work you’re doing. It’s so important. Even for subs that have a contract with the GC to introduce yourself with a preliminary notice, sometimes called a notice to owner or a prelim or a pre lien. You know, these documents number one help to protect your lien rights, but even more important than that, they open a line of communication that lets the GC know you’re on the job and expect to be paid for the work you’re doing.

Learn more: Everything contractors need to know about preliminary notice

Amy Powell: (16:46)

Yes, please. We don’t the stuff that’s going through. Sometimes they’re not actual suppliers, they’re just a copy and paste on the product data. So we would like to know that you’re there.  and sometimes we don’t get that information. We even ask for superintendents sometimes to look for the delivery trucks and make a list on their daily logs. So we can keep an eye on who is working, who is part of our team here. We need to make sure that you’re seeing. So,  showing that you’re you’re here on the job site is very helpful.

Jonny Finity: (17:16)

Because GCs want everyone to get paid one payment problems too.

And then, you know, your lien rights; lien rights are the most powerful payment tool in a contract respires tool belt. So protecting your lien rights is really important throughout every project, but your lien rights, you know, they’re not directly influenced by the submittal. The submittal process that spindle profits doesn’t generally affect your, your lien rights or the deadlines to file. But there are two specific scenarios that can come up with,  submittals number one, custom material fabricators typically would submit,  you know, the, the shop drawings for the custom materials that they’re providing to a project.  and in some cases after they create that material,  and the, the specs might change on the project or their sites, site conditions are different.

Jonny Finity: (18:13)

It doesn’t fit. Maybe it’s not actually incorporated into the project at the end. And a lot of States, custom material fabricators still have the right to file a lien, even if that material wasn’t incorporated in the project. Uh, and that’s so important.  the second is a lot of States, their lien laws actually protect design work as well. So architects, engineers and designers, uh, are also protected under lien laws and in many cases. So even the work, you know, typically mechanics lien laws protect your right to payment for permanent improvements to property, whether it’s through labor or materials. Uh, but in a lot of cases, the design work is actually protected as well. So if you go through all of this work to, you know, create shop drawings or, uh, samples or mock-ups,  you have, in many cases you have a right to file a lien if you don’t get paid for that design work. So those are two, two specific scenarios,  in which some of this mental process is really affected or really affects your mechanics lien rights.

Jonny Finity: (19:27)

And then the last is just, you know, on every project, keeping, having a very clear process for documentation. If there’s ever a dispute over payments or workmanship, or,  your payment isn’t coming in and the GC disputes it, or the owner disputes it, you know, the person with the best documentation is going to win. We like to say, you don’t get paid for the work you do, you get paid for the work and you can prove. And so keeping a detailed record of all of the submittals, you know, whether they were approved, whether they were rejected, what that process was like, and the dates, you know, whether you’re tracking in his spreadsheet or using software to do that, you know, it’s so critical for your payments at the end of the day. So we just wanted to go through a couple of common questions before we open up to your questions. This first one was if I don’t have a contract with the GC directly, is there anything specific I should do during the submittal phase of the project?

Amy Powell: (20:33)

I think the biggest thing is just somehow letting you know, don’t, don’t assume that the, the supplier or the subcontractor that we are contracted with is informing us. It may be unintentional, right? Everybody knows how busy our lives are at this point. But,  it wouldn’t hurt to just say, Hey, just figured, I’d let you know, I’m here, I’m here. I’m going to, I’m going to be on your job too. So,  just getting noticed that helps.

Jonny Finity: (21:03)

So that communication, communication is super important. So these three were all very related: When can I bill for my material? Does it have to be onsite to be billed? And can I bill from materials that are stored at my shop or in my yard?

Amy Powell: (21:22)

When you can build kind of, it depends, right? If you are, if you have detailing, if you’re a fire alarm, if your fire sprinkler and you’re, you’ve got those design costs, then you’re probably going to be billing,  sooner than again, like the painter of when they’re going to get the paint, but, uh, material to be on site to be built, not necessarily, but look at your contract documents, look at the specifications. Sometimes there’s not room on a job site to, to then be built. So you have to store it at your site or at the, at the yard. If that’s the case, again, look at division one, typically you need,  you need proof of insurance. Uh, you need pictures, you need a bill of sale. There’s certain things that we need to then to where we can bill and then get paid and then pay, pay you. But look at what’s required from the architect and the owner from that on if you can build a bill for offsite materials or not.

Jonny Finity: (22:19)

And then: Can I assume that as soon as I get my returned submittal, I should order my materials right away?

Amy Powell: (22:27)

This is, this is very tough. My recommendation is called the superintendent and ask because,  there’s, there’s some again, do you have storage space? Is the site ready for you? Would the materials that get damaged if they’re stored on site, because there’s everything going on or there’s just not much room. The best thing you can do is just communicate, ask the superintendent,  contractually. Yes, but that doesn’t, again, that doesn’t necessarily mean that we are completely ready for you on site yet.  so communication with the superintendent or with the foreman or whoever the GC representative on site is very important,

Jonny Finity: (23:08)

Right? If you have any other questions, feel free to put them in the chat,  put them in the Q and a,  Amy’s had a lot of experience with submittals and probably has as an answer ready to go for any questions that you have about the submittals process, how to get paid.

Amy Powell: (23:34)

Submittals are definitely one of those areas that you never are taught. You have to learn by fire. So the things you learned from submittals, at a very young age.

Jonny Finity: (23:59)

Well, if you do have any other questions,  feel free to email Amy at apowell [@] livingwellworks.org.  Or you can email me with any payment questions and the questions about mechanics lien laws, preliminary notices, etc. at jonny.finity [@] levelset.com. We will still stay on the line for a couple of minutes if you have any follow-up questions.

Jonny Finity: (24:27)

Sarah asked, is it typical to be able to file a lien for service work after the job?

Jonny Finity: (24:38)

Typically, as long as you’ve you followed your state law and protected your right to file a lien, any material suppliers, contractors or subcontractors will have the right to file a lien. The deadline to file a lien will be different in each state and is typically based on the last date of furnishing labor or materials. The bottom line is that you have a right protected by law to get paid for the work you do or the material that you provide. And in every state, there are some steps that you have to follow, like sending notice within a certain deadline. But as long as you followed the steps, and the work that you’ve done is covered under your state lien law, then absolutely after the job is completed, if you are not paid for any or part of that work,  you can file a lien under your state’s lien law.

Well, thank you so much to everybody that joined. Thank you so much to Amy for sharing your knowledge. Everybody go check out the Girl on the Hard Hat YouTube channel. Thanks again to everybody that joined and have a great day!