Control vendor pass-throughs (materials, freight, subcontractors, fees) so you don't quietly pay margin on top of margin.
Primary outcomes:
Beginner truth: Pass-throughs are where vendors "get paid twice" unless you require evidence.
A pass-through is any charge where the vendor is paying someone else (or buying something) and billing you.
Examples:
Define what's allowed and documentation requirements
| Pass-through type | Allowed? | Required evidence | Markup allowed? | Notes |
|---|---|---|---|---|
| Materials/parts | (Y/N) | (define) | (define) | |
| Subcontractors | (Y/N) | (define) | (define) | |
| Freight | (Y/N) | (define) | (define) | |
| Permits/fees | (Y/N) | (define) | (define) | |
| Rentals | (Y/N) | (define) | (define) |
Verify every pass-through invoice
Pass-Through Invoice Checklist - Pass-through line item is clearly labeled - Vendor provides original receipt/sub-invoice - Dates and quantities match the work - Markup applied matches contract rules (or none) - No duplicate receipts - Subcontractor charges match approved scope/CO (if required)
Track all pass-through charges
| Date | Vendor | Invoice # | Type | Amount | Evidence | Markup % | Compliant? | Action |
|---|---|---|---|---|---|---|---|---|
| (add rows as needed) | ||||||||
Template for disputing non-compliant pass-through charges
Subject: Dispute: undocumented or non-compliant pass-through charges — Invoice [#] Hi [Name], We are disputing the pass-through charges on Invoice [#] because: - [missing receipt / markup exceeds agreed cap / not in scope / duplicate] Please provide: - original receipt/sub-invoice - explanation of markup calculation (if applicable) Until resolved, we will approve payment for the undisputed amount only. Thanks, [Name]
v1.0 (2026-01): Latest release