The Subcontractor's Guide: Bidding to Getting Paid

By Wyatt Cooper · Published October 12, 2026 · 9 min read

Key takeaways

A subcontractor gets paid in proportion to the paper it controls: a clear bid, a subcontract it has read, approved submittals, written change orders and complete pay applications.
Most payment problems are set at the subcontract: retainage, pay terms, notice deadlines and closeout obligations are all in it before the first day on site.
Never do extra work on a verbal instruction; get it in writing and price it before you build it, or as soon after as your contract allows.
Closeout is part of your scope: punch items and closeout documents stand between you and your retainage, so start them early.

A subcontractor gets paid by controlling the paper at every phase: bid exactly what the documents show and say what you exclude; read the subcontract's pay terms, retainage and notice deadlines before you sign; get submittals approved before you buy; put every question in an RFI and every change in writing; bill monthly against your schedule of values with the right lien waiver; and finish punch items and closeout documents early to release retainage.

Bidding: price exactly what the documents show

Read the whole bid package before you price it: the drawings and specification sections for your trade, Division 01 (general requirements, which carry closeout, submittals and temporary facilities), the bid form, every addendum, and the subcontract form the GC will use. A bid is compared line by line against the GC's scope, so say what you include and what you do not.

Bid the scope on the GC's bid form, in its order, so your number can be compared without a phone call.
Price each alternate separately; do not fold it into the base bid.
List exclusions and qualifications in plain words: "Excludes fire caulking at rated penetrations; by others" is clear, "standard exclusions apply" is not.
Acknowledge every addendum by number. A bid that misses an addendum is often thrown out or carried with a risk adjustment.
Ask questions in writing before the due date, so the answer goes to every bidder.

To see how a GC reads your number against the others, and why a missing scope item or an unacknowledged addendum costs you the job, see how GCs level subcontractor bids.

The subcontract: where payment is decided

The subcontract decides how and when you are paid long before your first pay application. Read these clauses before you sign, and push back on the ones you cannot live with while you still have leverage.

Scope: does the scope exhibit match your bid, including your exclusions? If not, fix it now.
Pay terms: when you are paid after the GC is paid, and whether payment depends on the owner paying the GC. Some states limit or void pay-if-paid clauses; check your state's law.
Retainage: the percentage held, and when it is reduced or released. See how retainage is calculated.
Change orders: who can direct a change, the form it must take, and how many days you have to give notice of a claim. Missed notice can lose you the money.
Flow-down: the prime contract's terms that the subcontract passes to you, including the owner's warranty and closeout requirements.
Closeout: the documents you owe (O&M manuals, as-builts, warranties, attic stock, training, final lien waiver) and whether final payment waits on them.

On federal construction, prime contractors must put a payment clause in each subcontract: pay the sub for satisfactory work no later than 7 days after the prime is paid, pay an interest penalty on late payments, and give written notice of any withholding with its amount, the cause and what is needed to release it (FAR 52.232-27). The same clause lets the subcontract hold retainage if the parties agree. Most states have their own prompt payment laws for public and sometimes private work; their terms vary.

Before you mobilize: submittals, insurance and schedule

Before the first crew arrives, the GC will want your certificates of insurance and other compliance documents, your schedule of values, and your submittals: product data, shop drawings and samples for every spec section in your scope. Submit early, in the order the materials need to be bought, and do not buy or fabricate anything that needs approval until it is approved. A long-lead item submitted late becomes your delay.

Your schedule of values is your billing for the whole job. Break it into lines you can measure progress on, keep labor and material apart where the GC asks, and do not front-load it; a GC who sees an unbalanced schedule of values may reject it or hold back your first pay application.

During the work: RFIs, daily records and changes in writing

When the documents conflict or leave something out, ask in writing before you build: one question per RFI, with the drawing and spec section, a proposed answer, and the date you need it by. See how to write an RFI. An answer that adds work or time is a change, not just an answer; say so in writing.

Keep your own daily record: crew size, work done, deliveries, weather, delays and who directed what. When a dispute comes months later, the side with records made that day usually wins the argument.

For changes, get written direction before you do the work wherever you can, price it with your backup (labor hours, material quotes, equipment), and give notice within the time your subcontract allows when you cannot. The GC side of the same process, including how markups are applied, is in how to price a change order.

Getting paid: pay apps, retainage and lien waivers

Bill every month, on the GC's cutoff date, against your schedule of values: the percent complete on each line, stored materials if the contract allows them, retainage held, previous payments and the amount due now. Attach the lien waiver the GC asks for, usually a conditional waiver for this payment and an unconditional one for the last. Step by step: how a subcontractor fills out a pay application.

On federal fixed-price construction, the prime contractor certifies with each payment request that subcontractors and suppliers have been paid from earlier payments and will be paid on time from this one (FAR 52.232-5). If you are not paid on a federal job with a payment bond, the Miller Act lets a sub or supplier that contracted with the prime or with one of its subcontractors, and is not paid in full within 90 days of its last work, sue on the bond; one with no contract with the prime must give the prime written notice within 90 days, and any suit must be brought within one year of the last labor or material (40 U.S.C. § 3133).

Punch list and closeout: the last 5% that holds your retainage

Near the end, the GC walks the job and gives you a list of your punch items. Fix each one, show the fix with a photo, and tell the GC it is ready for review. Self-punch your own work first so the GC's list is short; a sub whose items keep coming back slows everyone's closeout, including its own.

Start your closeout documents as soon as your equipment is approved and installed, not when the GC asks at the end: O&M manuals for the installed models, record drawings with your changes, warranties in the form the specs require, attic stock with a signed receipt, owner training, and your final lien waiver. Owners often want a contact for warranty calls too; San Diego State University's closeout procedures ask for 24/7 contacts for the subcontractors on critical equipment. What the GC assembles from your documents is described in how a GC assembles a closeout package.

Retainage is usually reduced or released at substantial completion, with an amount held for open punch items, and the rest at final payment; your subcontract sets the terms. Then the warranty period runs. On federal construction the contractor's warranty runs one year from final acceptance and the prime must obtain the warranties normally given in commercial practice, which usually means yours and your manufacturers' (FAR 52.246-21). Answer warranty calls quickly; it is the last impression a GC has before the next bid list.

Every guide for subcontractors

How it works in Conflo

Conflo is free for subcontractors and suppliers. When a GC runs its job in Conflo, you see only your own invitations, acknowledge each addendum before you bid, and submit your number with the scope items you include, alternates priced separately, and your exclusions and qualifications (trade bids). After the award, your bid does not change; changes go through a change order.

You submit your pay app against your subcontract's schedule of values, with this period's percent complete and stored materials per line, and Conflo calculates retainage, previous payments and the amount due to the cent; the GC approves it or sends back only the wrong lines with a note. On the punch list you see only your company's items and mark each fixed with a photo or a note. In the closeout package you see exactly which documents your company still owes, turn each one in, and see the GC's note on anything sent back.

The same pay app as the electrical subcontractor sees it in Conflo: waiting on the GC, the payment steps, what is holding payment, the application summary and the schedule of values with this period, stored and to-date amounts. — A subcontractor's own view of its pay app in Conflo: what is holding payment, the summary, and each line's this-period and to-date amounts.

The bottom line

From the sub's seat, every phase of a job is a chance to protect the money: a clean bid, a subcontract you have read, approved submittals, written changes, complete pay apps and early closeout documents.

Read your next subcontract for pay terms, retainage and notice deadlines before you sign it, and start your closeout documents the week your equipment is installed.

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Sources

FAR 52.232-27, Prompt Payment for Construction Contracts — Acquisition.gov, U.S. General Services Administration. Read October 16, 2026.
FAR 52.232-5, Payments under Fixed-Price Construction Contracts — Acquisition.gov, U.S. General Services Administration. Read October 16, 2026.
40 U.S. Code § 3133, Rights of persons furnishing labor or material — U.S. Government Publishing Office. Read October 17, 2026.
FAR 52.246-21, Warranty of Construction — Acquisition.gov, U.S. General Services Administration. Read October 16, 2026.
Facilities Design Guidelines, Section 01 77 00: Closeout Procedures — San Diego State University, Facilities Planning. Read October 16, 2026.

Questions

How do subcontractors get paid?

Usually monthly, by submitting a pay application to the general contractor against the subcontract's schedule of values, with a lien waiver. The GC includes it in its own pay application to the owner and pays the sub after it is paid, on the terms in the subcontract.

How long does a GC have to pay a subcontractor?

It depends on the subcontract and the law. On federal construction, subcontracts must require payment within 7 days after the prime is paid. Many states set their own prompt payment deadlines for public and some private work.

What should a subcontractor check before signing a subcontract?

That the scope matches the bid and its exclusions, the pay terms and any pay-if-paid clause, the retainage and its release, how changes are directed and the notice deadlines, flow-down terms, and the closeout documents owed.

What can a subcontractor do if it is not paid?

Follow the subcontract's dispute and notice steps first. Depending on the job, a sub may have mechanics lien rights (private work) or payment bond rights (public work, such as the Miller Act on federal jobs), each with strict deadlines that vary by state.

When does a subcontractor get its retainage back?

Usually part at substantial completion and the rest at final payment, after punch items and closeout documents are done. The subcontract sets the terms, and some states limit how long retainage can be held.