Fixed price bid, lumber went up mid-job, GC wants another $6,800

In my price band there's nothing to negotiate with. Total budget on the last house I looked at was $58k and there's one crew inside 40 miles who'll take the whole scope. If they ask for six grand more I either pay it or the house sits open through winter with a tarp on it, and the tarp costs more than the six grand.

So I'd pay it and then fix the contract for the next one. Losing a capable crew in a thin market is a much worse outcome than a blown contingency.

The mechanism you want is a material escalation clause with a trigger and a cap, and you write it so it can only fire on named commodities. Something like: lumber, steel, and copper only, escalation applies when the supplier's documented cost on those line items exceeds the bid basis by more than 5 percent, contractor's share of the first 5 percent, owner's share above that, capped at a fixed dollar figure for the job. Attach the actual dated supplier quotes to the contract as the bid basis. Without that attachment there's nothing to measure against, which is exactly the argument you're having now.

The cleaner alternative for volatile items is allowances. Pull the lumber package out of the fixed price entirely, carry it as an owner-purchased allowance, and pay the invoice yourself. Your GC loses the markup on it and usually stops caring about the price swing.

On this job, before you release anything extra, ask for the two dated quotes side by side and get a conditional lien waiver from the GC and unconditional waivers from the framing sub and the supplier covering the draws you've already paid. Waiver forms and retainage limits are set by state statute in a lot of places, and some states cap what you can hold, so have someone check the rules where the property sits rather than reusing a form off the internet.

One thing your draw structure is doing to you: 30/40/30 with the second draw at rough means you're 70 percent paid out around the point where the remaining work is all finish labor, which is where schedule slips happen. That's the leverage you'd want later and you'll have spent it.