Construction News from Contractor Magazine
Monday, April 16, 2007
From Contractor Magazine: "Home builder Lennar Corp. has sent letters to its subcontractors in Southern California, Nevada and other states, telling them to cut their prices by as much as 20% and resubmit invoices for work not yet paid for."
"The letters said the subcontractors have a choice of either cutting their invoice prices or being shut out of bidding on Lennar projects for the next six months. In some cases the work has already been completed."
"'Basically, they sent a letter out that said as the customers are paying us a lower price for our homes, we must pay you lower price for services,' said an Orange County plumber with more than 200 employees."
"'So they gave us a choice of either reducing all unpaid invoices under current contracts by a percentage that varies from contractor to contractor, but it's a range of 3% to 20%,' the contractor said. 'This is for work that we had already been lowest bidder on and it was ongoing like the fourth or fifth phases of the project. Lennar already demanded a 5% decrease from the previous phase, so this is the second time they’ve come to the well.'"
Labels: Construction Industry, Construction Trends
