A backcharge is the GC's mechanism for recovering costs caused by a subcontractor's failure to perform. Common backcharges include: cleanup the sub left behind, damage caused to other trades' work, rework due to defective installation, missed schedule milestones, and unauthorized use of GC tools or materials. The GC notifies the sub in writing, performs the work (or has another sub do it), and deducts the cost from the offending sub's next payment.
Well-run backcharges include written notice before the work, a reasonable cure period for the sub to fix it themselves, documented costs (labor hours, materials, equipment), and a deduction from a specific pay application with backup. Disputed backcharges are a leading cause of payment fights at closeout. The cleanest approach is to handle problems contemporaneously rather than letting them stack up to a closeout reckoning.