Yesterday, 07:08 PM
From quora user David Stroud
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Since Donald J Trump has stiffed so many contractors, why do contractors continue to bid for his contracts?
You won’t like this answer.
I have many years of experience in managing the large contracts and subcontracts of the type that are often brought up in connection with The Donald. I have also done business in the NewYork/NewJersey/Connecticut “tri-state” area, and this whole world is an unreal den of thieves.
General Contractors (like Trump’s organization) hire subcontractors on a “lowest bid” basis, and the subcontractors invariably bid the jobs at a loss. They do this in order to get the job, and their strategy from the beginning is to make themselves whole with claims, some of which are completely bogus and all of which are grossly inflated. Everybody knows this. Claims are typically settled at 40–50c on the dollar, and the subcontractors complain, but in the end they are satisfied.
Also, because many subcontractors work on job sites simultaneously, there is always a chance that one contractor will interfere with others - either with a mistake or not - and the general contractor has to compensate the impacted subcontractor because THAT claim is legitimate. They then try to back charge the impacting subcontractor (i.e., deduct the claim from their payment), which leads to complaints that “We didn’t get paid!”
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