Mutual Contractor Vetting Protocol
Vet the GC as rigorously as the GC vets you to protect cash flow and culture
Clay Hudspeth's position at HudX is that the subcontractor relationship with a general contractor must be a mutual vetting process, not a hierarchy where the GC selects and the sub accepts. Hudspeth describes vetting his GCs on payment speed, communication style, and whether the GC expects the sub to subsidise their own profit margin through underpricing. In return, his GCs vet HudX on reliability, quality, and whether the team is easy to work alongside. The result is a small, stable portfolio of GC relationships where cash flow is predictable, disputes are rare, and both parties treat the relationship as worth preserving. He explicitly contrasts this with prior experience of two-to-three-month payment cycles that damaged his crew's pay continuity.
- A GC relationship is a two-way qualification, not a hierarchy where the sub must accept any available work
- Payment speed is a qualifying criterion, not a negotiating variable
- Subcontracting to a GC who squeezes margin on their subs is not cost of doing business, it is a business model mismatch
- A small, stable GC portfolio with reliable cash flow is more valuable than a large, unstable one with higher volume
- Easy to work with is a measurable criterion: it means communication is clear, scope is agreed before mobilisation, and payment happens on schedule
- Establish payment terms before mobilisationAgree on payment cycle in writing before committing to the first job. Net-30 from invoice is a reasonable standard for small excavation. Payment beyond that requires a corresponding pricing premium.Pro tipA GC who resists putting payment terms in writing is signalling their payment culture.
- Run a trial job before committing relationship depthTreat the first one or two jobs with a new GC as a trial. Evaluate payment speed, communication quality, and scope discipline before offering capacity or priority scheduling.WarningDo not discount the first job to win the relationship. It sets the wrong price expectation and prevents clean evaluation of the GC's margin expectations.
- Assess margin pressure tacticsAfter the first job, evaluate whether the GC is treating your margin as their contingency fund. Requests to re-price after mobilisation, scope additions without change orders, or payment deductions for normal site conditions are disqualifying signals.Pro tipA GC who says 'we don't really make money off your piece' is about to ask you to make less.
- Build a short, stable GC portfolioIdentify two to four GCs who meet the payment, communication, and margin criteria. Concentrate capacity with them rather than spreading across many relationships that each carry unknown risk.Pro tipA reliable GC who pays in 30 days is worth more than three GCs who pay in 90 days and keep the same revenue on paper.WarningCustomer concentration is a business risk; ensure no single GC accounts for more than 50 percent of revenue.
- Maintain the vetting standard on renewalRe-evaluate each GC relationship annually. Payment behaviour can degrade as GCs take on more debt or larger projects. A relationship that qualified two years ago may not qualify today.
Clay Hudspeth described a deliberate shift from working with any available contractor to a small portfolio of GCs who pay quickly and who he can trust to remove themselves from the homeowner-facing landscape portion of a project. His current GCs pay on short cycles, do not require Hudspeth to hold or finance their receivables, and give him direct access to the homeowner for the landscaping scope. The result is that HudX can plan crew scheduling and payroll without relying on debt to bridge payment gaps.
Extracted from Blue Collar Business Ep 32. Hudspeth described the mutual vetting relationship with his current GCs, noting that easy to work with is the qualifying criterion on both sides, and referencing prior contractor relationships where payment took two to three months.