Posted by
Thecontracorsside.com on Thursday, June 12, 2008 12:00:52 PM
Dear Fellow Contractors
Please resend this email to the Los Angeles Times (
robert.lopez@latimes.com) and then send this on to ten other contractors and so on, so we can let the press know how honest contractors feel.
Thecontractorsside.com
Read with interest your story on unlicensed contractors being busted.
This is of interest to legitimate contractors everywhere, however, I do not see and have not seen one
article anywhere, in any publication, that gives favorable mention to the contractors who slug it out
every day in a tough business.
Contractors already know that unlicensed contractors hurt the business, but reports of this nature
tend to tar all contractors with the same broad brush. In this state, contractors operate under the
most stringent rules in the country,
Contractors must not only be licensed, they must carry a bond, must carry workers' compensation
insurance or self insure, and are required to go to mandatory arbitration without recourse to appeal
in the case of dispute.
Add to these facts that the codes and regulations, price increase in permits, and heavy zoning restrictions,
and the cost to the contractor has skyrocketed in the past few years.
The customer does not know the intricacies of the business of contracting, nor does the customer
care. He looks at price, and there is where the cheap guys see an opening, i.e. unlicensed
contractors.
The licensing process (testing, evaluating, authorizing) is fairly good, but the process needs streamlining.
It can take months to move forward. But after the licensing process is successfully completed, the licensing
entity becomes the adversary of the contractor, rather than becoming the ally. The Board becomes solely
an advocate for the consumer, leaving little doubt that the contractor bears burden of proof of innocence.
Accusations of malfeasance against the contractor weights in favor of the contractee, and the contractor
bears the total burden of expense while the other party simply shows up, the State on his side.
The bonding companies, knowing they own the contractors' business, can charge maximum fees for a
"required product,' and they do. In my investigations into bonding companies, I have found not one
contractor who has received the advertised "preferred rate" for bonds. Bonding companies do an absolutely
perfect "bait and switch" maneuver that nearly always results in doubling the original cost of bond.
Workers' Compensation packages soar in expense as another "required cost of business." Due to the
overwhelming number of fraudulent claims, the snail-like pace of adjudication and settlement, the
ineptitude of investigators, the onerous medical proving up, the system is burdened at more than
quadruple its capacity, thereby increasing costs to the insured which, in turn, is passed on as
increased cost to the end user.
Add to these facts the unending number of stories of "bad contractors" who rip off the clientele, and
any story, repeat any story, dealing with the construction trades rises to a tacit indictment of all
contractors, unlicensed or duly licensed.
One might ask if the licensed contractor has any recourse but to report unlicensed contractors, and
the answer is no. Most contractors are loath to become involved with any authorities over any but
the most egregious of violations because it does not serve their interests and because most
contractors want to stay off officials' radar. Anonymity is the best protection.
One might further ask if anything has been done to help small contractors. Again, the answer is
no. Legislatures and government bodies have done absolutely nothing, passed no laws, written
no new regulations to help those whom "if you drove on it, if you work in it, or if you live in it, a
contractor built it."
Courts have been no better. In Southern California, according to the L.A. Times, seventy-five per cent of
all civil actions involve construction related cases. My research indicates that the contractor may as well
stay on his or her current job to make the money he or she will need to pay off the judgment because,
from Small Claims to Superior Courts, eighty-five per cent of the time the ruling is for the client.
This anti-contractor attitude has evolved from a belief that contractors make a killing on every last
project. The reality is that most small contractors work to a less than twenty percent markup that is
rarely achievable. Most small contractors do well to reach a ten per cent profitability, if that.
Across the nation, the situation is remarkably the same. Since I launched my website:
http://thecontractorsside.com, I have heard from thousands of contractors the same
series of complaints about identical issues, but the one foremost complaint is the use of
official bodies and rules to either reduce payment, or to not pay at all.
Why is this complaint so common? The easy answer is that there are a lot of cheaters out there,
but it could well be that cheating has become institutionalized as a product of unbalanced
regulation on a business which may be the only business in our country that remains
unable to be outsourced.
I heard recently from a contractor who boasted he had never been stiffed on a payment in
his twenty-five years of plying his trade. I thanked him for his call and asked if he might
have any advice to contractors who had not been as lucky. He rattled off a few well-known
practices and said if a contractor followed the rules, he would be paid. I thanked the man
and sat down to write my constituents his wisdom.
Yesterday, the same contractor called with the news that while he had played by the rules,
done his due diligence, he had just yesterday been stiffed for $8000.00. He was still stunned
by the event. Needless to say, he registered on the website ten minutes later.
What can be done to improve the lot of the small business contractor who has next to no power
with officialdom or media?
Because the small contractors have no true advocacy aside from small publications and loosely
organized trade associations, they have limited access to redress, and few speak on their behalf.
Their sole recourse is to become educated as to their market, and that means sharing information.
There are business seminars and coaching institutions which can help in the "business" of the
business, but these entities focus on individual practice rather than a group effort towards
commercial overview. Again, the contractor is isolated, insulated from information essential
to the conduct of informed practice, i.e. good customer, iffy customer, bad customer up to and
including suppliers, officials, banking institutions, architects, and engineers.
No one shows any intention of taking the contractors' side, therefore, the contractor must take
his or her own side in the work of improving the business, and this means in the area of
policing not only unlicensed contractors, but also in the area of policing every area of
contractor-societal interconnect, including self- and client-education.
If contractors initiate the improvements, the effect can be far-reaching and effective, but they must
take action to preserve the small business venue.
If the small contractor opts out, the results for the economy can be disastrous. Prices for construction
will soar when the only bidders are large companies who perforce control the market.
It is said that this country runs on small business. It employs more people than major corporations,
provides more peripheral and entry level jobs, is more responsive to market pressures, is more highly creative is
problem solution, and is truly the backbone of the nation.
The contracting business needs some good news and good press.
http://thecontractorsside.com is the only resource for this kind of information and the only
established advocate for the contractor. If you want to know what's happening in the construction
business where it really matters and where to take action, this is the place.
I am cc'ing this message to my constituents so they can sign onto it in agreement and
send it to you so the thousands of diligent, honest contractors can finally get some credit
where it is due.
Respectfully,
Lee w. Dodson
3232430404
thecontractorsside@gmail.com