My GC told me he prices every job assuming he will lose one sub before it closes

Seen that line called three different things across four GCs I've worked with, and only one of them ever explained it without being asked. On a $78k gut rehab in Cleveland last year mine had $4,800 tucked in there labeled "trade continuity." Plumber walked off week three, that money got eaten in about nine days finding a replacement and paying the premium to jump the queue.

The part that hit me harder than the line item was realizing he'd already done the math on my specific job and still took it. Meaning he looked at the scope, knew the risk, priced it, and moved on. That's a different operating mode than most owners are in when they're still trying to contract their way out of human behavior.

The thing I have never seen work is making the finish date enforceable through a contract penalty clause. Every investor I know who went that route either never collected because the relationship fell apart trying to enforce it, or they collected a small amount and the GC quietly blacklisted them for every future project. What your GC is describing is actually the honest version of something most of them just hide inside the labor rate or the contingency percentage and never name. At least you can see it and ask what it covers.

On the passive side I just accept that a forty-five day job on a single-family in the Midwest is realistically a sixty-day job, and I underwrite the carrying costs on the longer number before I make an offer. My last rehab in Peoria ran $68k total, and the HVAC sub disappeared on week three, no call, just gone. My GC had someone on-site eleven days later which sounds terrible but was honestly faster than I expected given it was February. The gap cost him about $2,800 of his own money on that one because it was not a job big enough to carry the coverage line he would have put on a bigger project. He ate it. That is the relationship you are actually buying when you hire someone who has been doing this fourteen years.

Negotiate that gap line into a contingency that rolls back to you if unused.

The one thing I have never seen work is assuming your contract language has any grip on a sub who is already half out the door on a better job. What actually happens is the GC starts calling in favors, pays a premium to get someone in, and that gap line gets eaten in about a week. My second deal in Dayton, 2021, we had a plumbing sub walk at rough-in on a 14-unit, and my GC burned through his coverage gap and then came back to me for another $4,100 on top of it because the replacement crew charged a mobilization fee he did not anticipate. The coverage gap is real but it is not a ceiling, it is more like a first buffer before the actual negotiation starts. Four months is enough time to ask every GC you talk to what happens when the gap is not enough, because that answer tells you more than the contract ever will.

Lost $4,100 in Cleveland, 2021, because I thought a tight contract would hold my tile sub in place.

Your GC is pricing reality, not padding. The question I'd want answered is whether that coverage gap gets reconciled at closeout or just stays in his pocket on a clean run.