Hubbell Homes is happy to have all of our trade partners work with us to build not only homes, but communities. Building communities takes a lot of communication, teamwork, and collaboration of ideas and talents. In exchange for these talents, Hubbell wants to be a good partner in getting you paid for the goods and services we agree upon quickly.
In order to achieve this in a transparent fashion, we pay off of purchase orders with agreed upon prices and bids before the work commences. Our goal this year is for you to treat these purchase orders as a contract. We DO NOT want to you to start the work on each job unless you agree to the PO or contract. Therefore, Hubbell Homes is implementing a process which requires each trade to enter their personalized builder portal (paid for by Hubbell) and check "APPROVED", on each PO before they start the work on that job. This guarantees the trade and Hubbell Homes that there is no more negotiation for the work agreed upon. If the subcontractor does not agree, then we can have productive conversations before the work is done and that is a good thing.
We know that there is never a perfect job in the construction industry. Changes happen and variances to the scope change due to such items as damaged goods, theft, and weather to name a few. Therfore, Variance Purchase Orders are needed. Up until now, these VPO's were handled through a VPO portal accessed through the Hubbell Homes website. As of February 15, 2019, this will be shut down. If any subcontractor has a pending VPO that has not yet been submitted, please do so before 2/15/19. VPOs after this date will not be honored or paid. On February 18, 2019, all additional or alternative work not included as part of Subcontractor's original bid price or purchase order for a project must be documented and priced by Subcontractor and authorized in writing by Builder through a VPO PRIOR to proceeding. Subcontractor shall not commence additional or alternative Work until the VPO is authorized in writing by the Builder and any commencement of additional or alternative Work without written authorization of the Builder is at the Subcontractor's sole cost and expense if Builder does not approve the VPO. "ANY ADDITIONAL OR ALTERNATIVE WORK SHALL BE A PART OF THE BASE CONTRACT PRICE UNLESS ACCOMPANIED BY A BUILDER APPROVED VPO. SUBCONTRACTOR ACKNOWLEDGES THAT SUBCONTRACTOR MAY NOT BE PAID FOR ANY ADDITIONAL OR ALTERNATIVE WORK THAT DOES NOT HAVE AN APPROVED VPO." This verbiage was taken straight from our new contractor agreement, which will be sent via Docusign later this week. To simplify and reiterate, VPOs must be negotiated and approved with the job superintendent before work commences. Hubbell Homes will no longer pay for invoices and/or costs after the work is performed outside of the original PO or a negotiated VPO.
This will be a big change for our subcontractors and superintendents. However, the level of communication will rise to an unprecedented level, this is good. The trouble of negotiating costs after the fact will go away, thus making payments much quicker on VPOs. The increased time on the front end of the original PO and VPOs will be a fraction when compared to the time it takes all of us to reconcile "after the fact" VPOs.
Lastly, this new process should also clear up statements that some subcontractors have trouble reconciling. In the past, Hubbell Homes has had to put a large amount of resources toward reconciling statements for some subcontractors. Going forward, if we are asked to do any reconciliations of statements on behalf of the subcontractor, we will charge $100/hour if we find we have paid for items on the statement. If we find that payment has not been made, there would be no charge.
Hubbell Homes does thank every single one of you for your partnership. The main point of these new processes is to ensure fairness to all parties and to create productive conversations if in the even something needs changed. Fairness means the subcontractor is getting paid for their work and Hubbell Homes knows they are receiving a product they were promised for what they paid. These conversations are much better before the work is done than after.
Steve Sexton manages the builder portal I refer to in the second paragraph. He has been working diligently getting our superintendents set up for VPO processing. Please do not hesitate to reach out to Steve if you have any questions as to how the VPO process works.