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Improving Outdoor Living
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37 Posts
Discussion Starter #1 (Edited)
I know this is a somewhat of a common theme in these forum's because I read a few posts about it, but I'm in a weird situation and could really use some advice.

I lost a job to a guy who the property owner said was "drastically lower" than my proposal. It was not really a job that we market for as our niche is more outdoor living, sunroom and porch additions etc. The job consisted of moving a number of walls around in an office building. Our quote was somewhere around 12K. That was basically demo, framing, sheetrock, drop ceiling, trim and electrical (which I had an electrician quote.) That didn't include the hardwood floors, which I quoted separately for each room. To make a long story short, I lost the job to a guy who worked with me a few years ago as a lead man. I didn't bad-mouth him, thanked the owners for the chance to bid on the job, and left it at that.

Then they called me back about three weeks later, said they were already missing their deadline to move into the office and it was just a disaster. They apologized for not going with me from the beginning. After I did a walk-through, I told them I wasn't going to be able to do a fixed bid, because I didn't know how long it was going to take to make the doors fit properly, fix the drop ceiling which was just installed to sit on top of drywall without the corner trim. I gave them a maximum labor rate of 5,800 to finish the job for them, which included our full crew for a few days, and the drywall finishers. They told me they had all the materials on the job, as they had a huge pile of trim in the garage, and whatever else we needed they would cover the cost. After the first day, they decided to remodel two more offices in the corner of the building that had been left out from the original plans until they knew what they were going to do with the space. They knew it was going to be more, probably going over our maximum labor rate, but they knew our rate and told us to move forward with it. We also got the entire job done just working Thursdays Fridays and Saturdays for a few weeks because they were working in the building Monday thru Wednesday and we couldn't be there making noise!

So, we basically finished everything up except the doors and trim in those front too rooms and gave them the final invoice. Our labor was about 1000 more than our original maximum (before the two rooms were added) plus there were more than a handful of other additions that weren't in that maximum labor quote. They also had almost 3,000 in materials because we had to purchase a lot of drop ceiling material that was damaged from the last guy, trim that they didn't have but thought they did, and all the new material for the front two rooms. All in all, the final invoice was near what my original bid was for, about 11,500. They did pay along the way some, and after I gave them the final invoice they paid me up to 1,300 of it. After the final invoice, they told me they didn't want to incur any more charges because it was already way more than they had hoped to spend on the property. I told them that I understood and I went myself for two days to finish those last two rooms, trim etc.

A week or so went by after asking for the final 1,300 and now they're disputing the invoice, saying that in the contract I said it was based on a full crew and they don't think my crew reported their hours honestly, that they weren't there the entire time etc. They said they're tired of being taken advantage of and they aren't going to pay the 1,300. They also disputed the electrician's hours. I wish I would have known that before we finished the job or I wouldn't' have gone back to finish those last two rooms. I also would have liked to know before I paid the electrician so I have him come and discuss his hours with the owners. I'm somewhat at a loss of what to do now. I knew it was going to be a mess from the beginning, they were frustrated already and had already spent a lot of money. I feel bad for them that it ended up costing them so much more, but it's not my fault. I think next time I'll take a contractor friend's advice of never coming in after another builder mid way through a job. It's not worth reputation and liability of not making what you should.

Anyone been in a similar situation? What should I do. I don't want to go the legal route because the referral that they got are somewhat close friends of my wife and I. I know it's just 1,300, but that money can go a long way!

Any advice would be greatly appreciated!!!
 

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Super Moderator
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For starters................

You stated that you lost the job to a guy who was drastically lower. What does this tell you about this customer? Secondly, you have not mentioned a formal contract. I think you are lucky to still have your shirt!!
 

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Registered
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Man, go to the introduction section and start there.

What is this above ? Have you been at Starbuck's all day ??? Post a couple of short paragraphs at a time.....?
 

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Improving Outdoor Living
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37 Posts
Discussion Starter #5
contract

I type fast, sorry it's so lengthy.

We did have a formal contract. It was spelled out, what work we would do, maximum labor rate etc. We didn't have the new rooms in the contract, but we agreed that we would continue with our stated labor rate (which was basically 1,500 per day for the full crew) and get those rooms done. They knew it would go over the original "budget".
 

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Super Moderator
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I type fast, sorry it's so lengthy.

We did have a formal contract. It was spelled out, what work we would do, maximum labor rate etc. We didn't have the new rooms in the contract, but we agreed that we would continue with our stated labor rate (which was basically 1,500 per day for the full crew) and get those rooms done. They knew it would go over the original "budget".
Still sounding very vague. What constitutes a "full crew" How many work hours in a day.
 

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Improving Outdoor Living
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37 Posts
Discussion Starter #7
full crew = 5 workers, 8 hours per day plus management to make sure those 5 guys are doing a good job and working hard.
 

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Super Moderator
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full crew = 5 workers, 8 hours per day plus management to make sure those 5 guys are doing a good job and working hard.
Once again, I hate to keep beating a dead horse but............. what constitutes "plus management" what is a "good job" what is "working hard". Surely these are not terms that were used in a contract. Also, what was specified as a payment schedule? Was there only one payment, and at the end?
 

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This whole situation is a mess. You did work that was different than what you normally do. You worked for someone who started with a lowballer. Your contract was iffy at best with only vague descriptions of how labor would be accounted for, and you considered not finishing the job if you had known there would be a dispute. No sympathy here bud, sorry.
 

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Improving Outdoor Living
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37 Posts
Discussion Starter #10
The proposal was a few pages long, describing what we would get done within our maximum allowance. For the explanation on the labor this was the contract:
"Labor estimate for the above items. This is an estimate considering the amount of work that needs to be done, however we will bill at a cost plus 20% rate up to this maximum amount. For the majority of the work that needs to be done this is based on a crew of 5 plus management. We are willing to work Saturday, although it may not be the entire crew at that point, and we would bill accordingly."

This was the first time I have ever done a labor contract. In the last 6 years, I have always detailed the work that we would do for a fixed proposal.

I showed them our labor rate separately, breaking it down per hour based on who would be there etc... That was way more info than I usually like to divulge, but I thought I needed to be as straight forward as possible.

The additional work that I said I wouldn't have finished, had I known they weren't going to pay, was for the two rooms that they decided to do so that they could rent the space. In conversation before we started it they said they might as well just go ahead and do those rooms now and get all the construction over with.

The only difference that we discussed was that because of those rooms, we were going to go over our maximum. That work wasn't written in the contract specifically, so it was a given that it was going to be more, and we had already worked out our cost plus agreement...
 

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Improving Outdoor Living
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37 Posts
Discussion Starter #14
haha, I like that.


I know I'm justified in demanding the money, I guess I'm just looking for advice on how to go about that without threatening the law or being a jerk about it.
 

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JimmyS
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224 Posts
Co?

I'm guessing you didn't write a change order when the scope increased. I'm guessing you didn't quote an amount for the new total, just said that it would go up. I'm guessing the client had a bad attitude about contractors or the project even before you got there. I'm guessing they didn't agree among themselves on how much this might cost or about increasing the scope.
After all that, it's hard to see how you can salavage this. If you are only short $1,300, grin and bear it. Unless you know your customer well, always get changes in writing. You know all this, but wanted to hear it again?
I wish you luck collecting, but you could try small claims if you have supporting paperwork.
Jim
 

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Improving Outdoor Living
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37 Posts
Discussion Starter #16
yea I know it was a mess, and I've heard a million stories of guys losing a job and or getting called to a job to finish someone else's shoddy work. We did a good job, I have the final email from the client stating that they are very happy with the work, our timeliness etc. I did know them (referral through a friend which was mentioned in my lengthy intro), so I guess I trusted them too much when we discussed the scope of the work increasing, and I figured we had established a 20% cost plus rate and discussed that it should take a few extra days to do that extra work (which I was spot on).

I've paid everyone from the job, and if I walk away I guess I just lose my time / profit, but I honestly feel like it's not worth their good opinion of us to simply state that they owe that money and strongly request final payment...
 

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You are not a jerk asking for money you are legitimately entitled to.

Signed change orders would have helped.

I personally think you need to sit down with the powers that be and describe what you have told us and ask why they are disputing after the work is complete.

You may have to threaten and follow through with a lien to get their attention to realize you are serious.
 

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Improving Outdoor Living
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37 Posts
Discussion Starter #18
"after the work is complete" - that's the key. That's what's so frustrating to me. I'll try to have a sit-down...again... They've been hard to get in touch with these last two weeks, surprise! I think I'll make that my main argument with them, that they waited to mention any disputes till well after the job was complete and after we did "extra" work to make them happy.
 

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Banned
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I just have to ask, but you do realize that these people are pros at screwing contractors, right? This isn't the first episode of this for them. This is their routine method of doing business. This was panned to happen from the day you first met them.
 

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Hate to pee on your parade mate but if its not in writing then it didn't happen. Especially "among friends". Also per memory contract disputes tend to go to the defendant if the contract is written too vaguely which is why we spell out in almost painful detail:

1. What we will be doing with verbage that if we come across something that we didn't expect to find which would change the scope of work, time, or cost and/or if the customer wants work done outside the original scope of work we will stop all work and present the customer with a change order with cost, work scope, added time and wait for the customer to decide to move forward (signing the CO) or not;

2. What we will be charging to do it;

3. How long it should take with escape clause in case of "unforeseen issues";

4. How/when we get paid to do it.

5. What constitutes completion of the contracted work;

6. What actions we will take if we aren't paid including them paying for our attorney fee's if we have to lien/sue/send a nasty letter etc

We then have the customer sign off at each stage that the work is done to their satisfaction before we move on to the next stage with final signoff at the end.
 
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