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T RUMP B UILDING P ROJECTS

ments. The GC’s profit is computed as a certain percentage of the
costs (typically 1% to 4% depending on the size of the project—the
larger the project the lower the percentage).

CREATE INCENTIVES FOR BEING EARLY RATHER
THAN HAVING PENALTIES FOR BEING LATE

There are usually delays in any construction that are unforeseen.
However, if a contractor knows that if he finishes before a certain
date he gets a bonus, he will move heaven and earth to earn that
bonus, so if there is a delay, he will figure out how to work around it.
Maybe they’ll put in overtime, or maybe they’ll just make every ef-
fort to get the job done early.
Instead of getting into an argument with a contractor, such as,
“You said you were going to complete this building in December, and
now it’s January and you’re nowhere near completion. You agreed
that you would pay a penalty for every day you’re late past December
except for delays for causes beyond your control. I’m going to insist
on the penalty.” With that scenario, all that happens is that the con-
tractor comes up with a list of all the things beyond his control that
caused delays. So, at best, you end up in a dispute with the contrac-
tor, which ultimately has to be resolved by negotiation or litigation.
The contractor is unhappy knowing his profit is diminished or wiped
out entirely. So you would be dealing with an unhappy contractor
contrasted with a happy contractor who has an opportunity to make
an even greater profit by finishing early. By far the worst thing that
can happen is that a contractor walks off the job. In addition to the
inevitable delay, the costs incurred in hiring someone new can be
astronomical. Any “savior” knows you’re in a bind and will charge a
premium to bail you out. You will be told how much more it will cost
to correct the work done by the departing contractor. Try to keep

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