Back-Charge
A cost the general contractor deducts from a subcontractor's payment to cover work the GC had to perform, correct, or pay a third party to do because the subcontractor failed to do it properly: cleanup the subcontractor left behind, damage they caused to other trades' work, or a corrective fix after a [[concept-non-conformance-report|non-conformance report]] went unaddressed.
Why it matters
A back-charge is a direct hit to a subcontractor's payment application, so documentation matters enormously: a GC that back-charges without clear photos, dates, and prior written notice to the subcontractor invites a dispute, while a well-documented back-charge is difficult for the subcontractor to contest.
On a real project
A subcontractor repeatedly leaves construction debris in a shared work area despite verbal reminders. The general contractor eventually has its own cleanup crew clear the area and back-charges the subcontractor's next payment application for the labor cost, attaching photos and dated notices as documentation.
Who this matters most to
A Project Manager or Superintendent has to decide in real time whether an issue is worth escalating to a formal back-charge or just handling informally, since back-charges strain subcontractor relationships and are worth reserving for situations with clear documentation and real cost impact. A Contracts Administrator reviews back-charges before they're applied to make sure they'll hold up if the subcontractor disputes the deduction.
Where this goes wrong
A general contractor back-charges a subcontractor's payment application for cleanup costs without ever having given the subcontractor written notice or an opportunity to fix the problem themselves first. The subcontractor disputes the deduction, and without documentation showing prior notice, the GC has a much weaker position than if they'd followed a documented notice-and-cure process before self-performing the fix.