Resources & Insights

Hurricanes: Another Reason to Bond Your Subs  

September 21, 2017

It would take fewer than 30 dominoes to wipe out the Empire State Building.

hurricanes subcontractors bonds
CCIG’s Tom Patton.

Unbelievable, right? Perhaps, but a University of Toronto physics professor theorized as much in a demonstration showing that dominoes can actually knock down things about one-and-a-half times their size. Thus, starting from a domino five millimeters tall, it would take just 29 progressively-larger dominoes to collapse the Empire State Building.

Along these lines, there’s a domino effect under way at the moment that is likely to make itself felt for a while all across the construction industry, whether you do business in places like storm-wracked Florida or as far away as Colorado.

It’s the disruptive effect that Hurricanes Harvey, Irma and all of the other big storms will have on the supply chain for key materials and labor.

While the rebuilding work is a boon, demand for these things will push up costs and leave contractors scrambling to secure supplies and workers.

“Harvey will further tighten an already tight labor market,” Emily Crowley, a labor economist at Global Insight, told Engineering News-Record.

Trades such as flooring and drywall will feel it first, followed by a demand for higher skilled workers, such as electricians and ironworkers, she said.

A survey by the Institute for Supply Chain Management after Hurricane Harvey’s landfall found that 67% of supply chain managers felt that materials pricing would be at least somewhat negatively impacted in the short term.

There’s not a lot that can be done to minimize the pain, but there is one thing that any general contractor or project owner will definitely want to make sure they do protect themselves and their clients: work strictly with bonded GCs and subcontractors.

GCs need to be sure to bond subcontractors on especially large, complex projects. Same goes when a few subcontractors represent large or critical segments of the work.

One of the best things about working with sureties is that they prequalify your subs. That means they take a lot of the guesswork out of the process of finding a sub by analyzing a number of things, including:

  • the financial strength of the subcontractor;
  • the subcontractor’s experience and character;
  • the subcontract to be bid on;
  • the subcontractor’s exposure and progress on other contracts; and
  • the size and location of the work and
  • the subcontractor’s ability to perform that work.

Remember, the only time you fully know you have the right subcontractor is at the moment when the subcontract has been performed, according to the terms and conditions of the subcontract, for the agreed-upon price and within the time limit specified.

Tom Patton is a Surety Advisor with CCIG. Reach him at or 720-330-7922.

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