Getting Paid for Mobilization and Demobilization Costs

Trent Cotney, PA

Most disputes in construction arise out of change orders or disputes over extra work. One of the most difficult “extra work” charges for roofers to recover is mobilization and demobilization costs. Often, a roofer may be told to proceed with work on a certain date or
suspend work due to owner delays. These delays cause the roofer to lose money on equipment rental and labor and result in increased overhead allocated to a specific job. It also prevents a roofer from allocating crews to other jobs.

In addition to delays or suspensions on projects, roofers may be asked to secure materials or remove roof-topped materials when a tropical storm/hurricane is imminent. The removal of these materials can be considered a demobilization task. The labor and equipment rental costs to secure materials are usually not addressed in the contract leaving roofers to either request a change order which will likely be denied or absorb the cost.

Roofing contractors should consider inserting a provision in their contract that allows for them to recover costs without the need for a change order in the event they incur additional demobilization/remobilization costs. Here is a sample provision:

In the event a roofing contractor is required by Customer, Owner or any third party to secure and/or remove materials and equipment from the jobsite prior to project completion, Customer shall pay roofing contractor its actual costs for demobilization and remobilization without the need for a written change order. Roofing contractor shall submit an invoice reflecting the actual costs to Customer which shall be paid by Customer within 14 days of receipt.

Similarly, a more simplistic version can be inserted solely relating to named storms:

In the event of the issuance of a tropical storm or hurricane warning, Customer shall pay roofing contractor the actual cost to secure materials without the need for a change order.

Although no contract provision is foolproof, these provisions may help the roofing contractor obtain payment if they are required to incur costs to demobilize or remobilize on a project. Contract provisions serve another equally important purpose – the education of
the customer. When asked to remove roof-topped materials, a roofer can point to the contract provision and remind the customer of the increased cost associated with the removal. Anytime a roofer can remove uncertainty, it will decrease project disputes and increase the bottom line.

FRM

Author’s note: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

Trent Cotney is Florida Bar Certified in Construction Law, General Counsel and a director of the Florida Roofing and Sheet Metal Contractors Association (FRSA), a director of the West Coast Roofing Contractors Association (WCRCA), and a member of the National Roofing Contractors Association (NRCA), Midwest Roofing Contractors Association (MRCA) and several other FRSA affiliates. For more information, contact the author at 813-579-3278 or go to www.trentcotney.com.