Subcontracting Can Be a Win-Win

Cleaners who subcontract for trenchless repairs can boost profits, but first there are a few important things you must know.
Subcontracting Can Be a Win-Win
When looking for an appropriate company to perform trenchless repairs, it is always important to get some referrals and to talk with others who have knowledge about the company.

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Contractors may be missing a bet by not offering pipe bursting or relining through a subcontractor for damaged lateral lines in the residential community.

Justin Moe, owner of All Ways Drains in Saint Paul, Minnesota, has been subcontracting these services to his clients for the past three years, and it has been a profitable move for his company. However, his advice to other cleaning companies is to learn what the state requires in order to be in compliance.

Moe found out the hard way that in Minnesota anything that has to do with plumbing requires a bond with the state. Although he subcontracted with a fully licensed and bonded plumber to provide the service, he was fined. This brought about a significant change for his company; he hired a master plumber in order to continue to offer relining through a subcontractor.

“We are a big enough shop to make this a profitable service,” Moe says. “A small shop could probably not afford the expense.”

Moe says there is not a problem when a subcontractor shows up to perform the actual work, and All Ways Drains is up front in explaining the arrangement to clients. The billing will include the work performed by the subcontractor.

When looking for an appropriate company to perform trenchless repairs, it is always important to get some referrals and to talk with others who have knowledge about the company, Moe says.

Campbell Plumbing & Drain in Eastlake, Ohio, has been using a subcontractor to perform pipe bursting and relining services for some time, and it has proven to be a profitable venture that takes care of situations where a no-dig repair is required.

Scott Haymer, one of the owners, says they use a subcontractor that specializes in these services. He says the most important criteria in looking for a subcontractor is a company with a good reputation and experience.

Haymer says his subcontractors work under the license of Campbell Plumbing & Drain, and there are no other state regulations they have to be concerned about.

“When working with a subcontractor, we include their price in the estimate for our customer and include that in the billing,” he says. “Although their trucks are clearly lettered, it is clear that they are not the prime contractor. We would prefer to have someone without logos on the truck, but we have to be realistic. The contractor we use is not there to take away our customer.”

Haymer says he likes to have someone on the job site, but it is not a necessity, as he has confidence in anyone he would bring in for the job.

From the Pueblo West region in Colorado, G. B. McHenry III has operated On The Move Septic since 2006, offering drain cleaning, septic service and excavation. For the past four years, McHenry has subcontracted to provide pipe bursting and relining to his customers who want to avoid dig-and-replace repairs.

“We kept running into situations where it was not cost-effective to do open cutting because of landscape issues and rising permit fees required by the city,” McHenry says. “We also had situations where the lines were too deep. We had a project where the line was 17 1/2 feet deep, and we would have had to close down two roads.”

Also of concern are the impact fees that triple when asphalt is less than 5 years old, thus another benefit to the customer when pipe bursting or relining provide a solution.

McHenry says they began to have customers asking about the service and if his company could fix the problem. He says if his company did not provide trenchless repair, then the client would simply have gone elsewhere.

He found a Mr. Rooter franchise in Colorado Springs that offers these procedures. He then visited several different work sites where he saw firsthand the work they were doing and how they interacted with customers.

“That is a big thing — how they treat the customer,” McHenry says. “We are protective of our customers. That is big. We also talked with them, and they explained the whole process to us.”

A subcontractor will act under the license of On The Move Septic (the prime contractor) in their area, and the subcontractor will submit their bill to McHenry. On The Move Septic will do all the required excavation and the reclamation. When the job is finished, they will take a small mark-up, but their profit is primarily in the excavation work on the project; work they are equipped to handle.

“We have built a rapport with our customers, and we will always do the best thing for them as far as product and price are concerned,” McHenry says. “If we need to sub out a service, then we will sub it out. That is how we have built the business … through our relationships where they trust us when we do the job.”



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