As a general contractor, you might resonate with this frustrated colleague we happened to eavesdrop on!
I should be asleep, but here I am, staring at the ceiling, running numbers in my head.
Payroll’s due Friday, and TxDOT still hasn’t released last month’s payment. That’s fine. I’ll just pull another chunk from the line of credit – if the bank doesn’t throw a fit first.
And then there’s the rebar delay. Again. They promised delivery last week, now it’s “next Tuesday, maybe.” I’ve got crews lined up, waiting. Burning money.
And one crew just ghosted me. Another is behind, blaming the heat – which, yeah, fair, it’s Texas – but that doesn’t mean the contract shifts in their favor. We’re all sweating out here.
The equipment lease is up next month. Do I extend it? Buy used? It’d be nice to have a little predictability, but what’s that anymore?
Let’s review those problems and look at some possible ways forward!
1. Contract and Compliance Challenges
State contracts often leave you on the hook for delays, weather issues, and even supply chain problems. And delays in progress payments can create cash flow nightmares for you (although TxDOT is usually good).
However, as a general contractor, you can try to negotiate milestone payment terms to suit you better. Don’t forget to push back if payments are late: Texas’ Prompt Payment Act requires agencies to pay within 30 days.
A harder option is to – over time – amass a reserve of three months of payroll and equipment costs as liquid assets!
2. Workforce Nightmares
Texas weather can shut down projects for days, but you still need to retain and pay key workers. And if you’re a mid-sized general contractor, you can struggle to find reliable subcontractors and staff against the competition.
Overall, it’s good to provide completion-based incentives instead of just raising hourly wages. Also, assess any trucking companies for exactly how well they meet your requirements.
3. Equipment and Materials Issues for a General Contractor
The supply chain is another ongoing challenge! Materials are often subject to delays that affect your scheduling. And with fluctuating costs, you can find your fixed-price contract leaves you absorbing the difference.
This aspect is unavoidable at times. But in partial mitigation, try never to rely on a single materials supplier, even when using a single, reliable trucking company.
4. Scheduling and Project Efficiency
One challenge in being a general contractor is that projects often overrun, and delays (weather, utilities, permit approvals, etc.) can put you in penalty territory.
And because infrastructure jobs often require you to coordinate with multiple agencies and utility companies, it can feel you’re being penalized for someone else’s inactivity! Always buffer into your bid some time for delays. Why suffer for someone else?
However, with improved technology, you can keep ahead of many issues using project management software to track schedules, costs, and delays with real-time visibility. Don’t rely on paper! Choose trucking subcontractors who also use GPS and telematics solutions to enable fleet management from both sides.
5. Competitive and Market Pressures
Competition can be brutal despite the large number of new projects emerging in Texas for infrastructure, waterworks, airport extensions, new roads, and renewable power.
If you’re a mid-size general contractor, big firms can outbid you by leveraging scale, while smaller firms can undercut you on pricing.
And possibly one-off wins make it hard for you to have a steady workload all year to retain subcontractors.
One solution is to bid for less-competitive contracts (e.g., specialized infrastructure).
Another is to partner with DBEs because state contracts often require, or favor, bids that include not only DBEs but also SBEs and MBEs. These strategic partnerships can help you win bids.
6. External Factors
External factors can always challenge a general contractor:
- Extreme weather increases costs and sometimes forces full site shutdowns.
- New safety, labor, or environmental rules (like emissions regulations) add surprise compliance costs.
- Rising interest rates increase financing costs for equipment.
- Inflation erodes your profit margins.
- Infrastructure projects are often politically charged, leading to litigation risks and delays due to public pushback.
You cannot control the uncontrollable! But you can plan to use a few mitigating tactics – from faster-curing concrete to advanced weather tracking software – to work around challenges before they happen. You’ll have your own ideas from experience!
Even subtle changes in how you counteract challenges as a general contractor can affect your success overall.
Cowboy Trucking Supports You as a General Contractor
Cowboy Trucking embraces technology and excellent communication to help you stay competitive and profitable as a general contractor. Our guiding principle is: We get the job done. Give us a call!