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Article: Rash of subcontractor failures leaves contractors holding the bag. (low bids result in subcontractors' inability to finish projects) (Special Report: Construction) (Industry Overview)
- Article from:
- Los Angeles Business Journal
- Article date:
- March 22, 1993
- Author:
CopyrightCOPYRIGHT 1993 CBJ, L.P. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Competition for Los Angeles construction projects is so intense that subcontractors are bidding work too low, going broke and walking off jobs before they are finished, leaving general contractors with big liabilities that can quickly eat up profits.
And construction industry leaders said the problem is escalating.
"There was a rash of instances where subcontractors went under and could not finish the jobs in February," said John Hakel, spokesman for the Los Angeles County branch of the Associated General Contractors. Hakel would not identify the subcontractors.
The trade group's local chapter has 510 members, including both subcontractors and general ...