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JimmyS
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Discussion Starter · #1 ·
Normally I can work out most customer problems and don't ask for advice, but I have one that's stumped me. Big ($450k) remodel/addition job, we started last June. Was supposed to end 11/11 per contract. Changes have extended that to late Feb. This is a fixed price architected job with plans but few specs, (arch. is friend of owner from college and out-of-town), customers have means but don't want to overbuild for their neighborhood, etc. We do strictly custom work, and have for 35 years.

These folks have a real hard time getting to THIS IS WHAT I WANT. Each task we start they want to redesign to get it exactly "right". I spend lots of time drawing out built-ins that weren't just what they wanted when they signed the contract. Trim, floors, tile, kitchen cabs, siding, roofing, windows - everything has been changed since the beginning. My COs have not included the meeting time, just costs directly associated with the change, since meetings cover so much territory.

We can handle the delays, and not too worried about the money. My change orders have shown the time and money cost of changes. But we're all grumpy 'cause we can't finish a task until customer redesigns it a couple of times. I'm also concerned we look like slowpokes to neighbors, etc.

Now I am about to bill them for the hourly cost of the meeting time required to discuss the redesigns. I warned them a month ago this was coming, without putting a price tag on it. Amount is about $4k right now, and growing. I want to explain the way things NORMALLY work in a letter to go with the CO. I don't want to pizz them off since they're very likeable and have lots of friends, and we want to build them what they want. But, they're acting a little nuts about these decisions, and we're not shrinks.

Here (finally) is my question. Would you write a note with the CO telling them this is costing them because of their compulsive behavior, or wait for the feedback? You can tell I overexplain stuff, but I'm thinking to just send the CO and see what happens. I wrote the note a month ago but haven't sent it. I want them to decide faster but maybe they can't. Hubby and wife disagree about how perfect this job should be.
Thanks, Jim
 

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I would just send the CO with a description of what it covers. I would NOT state in the CO that it is because of "their compulsive behavior". But if they come back questioning the CO then I would explain the compulsive behavior part. No need to stir the pot unless it is needed.
 

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Write a very simple note.......

Dear Mr. & Mrs. Jones:

Enclosed, is a copy of our labor charges for additional work. We are currently processing the extra charges, and I will forward the statement for the additional costs by January, 10, 2010.

If you have any questions, regarding these costs, please contact me as soon as possible.

Thank you very much.

Sincerely,


John Smith
Big General Contractor


Send a copy of your additional charges. Keep the letter short, simple, and don't mention psycho problems.
 

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People aren't stupid. They know they are indecisive and a pain in the ass.

Hopefully they appreciate you for dealing with them and just pay the bill.

One the other hand i do think you dropped the ball a bit sending one bill of that size right before christmas. Had it been split up into a few payment you probably would have never heard anything about it.
 

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People aren't stupid. They know they are indecisive and a pain in the ass.

Hopefully they appreciate you for dealing with them and just pay the bill.

One the other hand i do think you dropped the ball a bit sending one bill of that size right before christmas. Had it been split up into a few payment you probably would have never heard anything about it.
I think he might have already 'taught' his customers that meetings and his time spent figuring out all these changes was already included :

This is a fixed price architected job
I spend lots of time drawing out built-ins that weren't just what they wanted when they signed the contract. Trim, floors, tile, kitchen cabs, siding, roofing, windows - everything has been changed since the beginning. My COs have not included the meeting time, just costs directly associated with the change, since meetings cover so much territory.
 

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I'm on a boat!
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This advice comes hijacked from David Gerstel who wrote "Running a successful construction company." In my contract I have a clause that there is a 1 hour allowance for change orders weekly that includes drawings, meetings, or anything else that involves work outside of the contract. After that 1 hour, you will be billed at XX dollars per hour. On my change order form, I have a line item for "change order preparation charges". I rarely need to charge for change order preparation, but for clients as described by the OP, that's where it comes in handy. It also seems to help them make up their minds quicker.
 

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I think he might have already 'taught' his customers that meetings and his time spent figuring out all these changes was already included :
10000% agreed. I'm guilty too. I try to go above and beyond all the time, but it has bitten me more times than not. Once you give an inch, many people will take a few miles.

On one job when I was young (er):laughing:, we were roughing in the electric on a house, and one of the laborers asked me for a cigarette. I gave him one. An hour later same thing. After a couple weeks, I cut him off and guess what..."I was an a$$h0le. I wish I would have just saved the smokes I gave him and became an a$$ ... earlier.
 

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This advice comes hijacked from David Gerstel who wrote "Running a successful construction company." In my contract I have a clause that there is a 1 hour allowance for change orders weekly that includes drawings, meetings, or anything else that involves work outside of the contract. After that 1 hour, you will be billed at XX dollars per hour. On my change order form, I have a line item for "change order preparation charges". I rarely need to charge for change order preparation, but for clients as described by the OP, that's where it comes in handy. It also seems to help them make up their minds quicker.
This and:
These budget allowances will supersede the plan specification.
Each budget includes installation and sales tax.
Prices may vary; particularly those associated with wood products.
We will assist Purchaser in any way we can, but it must be the Purchaser's responsibility to allow adequate Budgets to meeet their expectations.
Any Budget overages or credits will be assessed XXX State Sales Tax and the total will include Builder overhead and profit at XX% of the total of the change order.
The costs associated with said change orders will be billed to Purchaser on a monthly basis and will be due in full by the date indicated on monthly invoice.

You have to let them know up front how the process is going to go down.
It is important to have a strict selection schedule in witch if the selections aren't made on time there is a change order, for days lost.
All change orders should address the change to the schedule as well so it doesn't bite you at the end of the job.
 

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assuming you have both a both a conventional builder contract and 3rd party architect - document, document document, keep it current and on the desk of the architect, and use that architect to manage the client's decisiveness. make that person your buffer and proceed on the basis of sign-offs to submittals or mockups and fully executed change orders. everything in writing.

we recover our home office management time in extended overheads which are tied to the schedule. we do not bill hourly for what amounts to customer relations gone-wild.
 

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This advice comes hijacked from David Gerstel who wrote "Running a successful construction company." In my contract I have a clause that there is a 1 hour allowance for change orders weekly that includes drawings, meetings, or anything else that involves work outside of the contract. After that 1 hour, you will be billed at XX dollars per hour. On my change order form, I have a line item for "change order preparation charges". I rarely need to charge for change order preparation, but for clients as described by the OP, that's where it comes in handy. It also seems to help them make up their minds quicker.

I really like this! I too try to go above and beyond when it comes to changes/modifications but some clients can get extremely obsessive/compulsive about changes. Normally I do not have a fee associated with a change order but I think this will added to our contract asap.
 

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JimmyS
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Discussion Starter · #13 ·
I think he might have already 'taught' his customers that meetings and his time spent figuring out all these changes was already included :
Mike you might be right. I do try to be accommodating. As I said, the COs charge for the work, O + P for each item, and for pricing the CO itself. That's not the problem. What bothers me is the time and effort it takes them to get to decide something. They crave info, and use me and the web and suppliers. I need a clause for this situation in my contract. Especially with all the online "advice" there is around.

Everyone, thanks for the help. I've sent the CO, and we'll discuss it at our next meeting - I don't think they're too happy. I'll report the results.
I hope everyone else has a good Christmas.
Jim
 

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Maybe you should encourage them to enlist an architect or designer. I'm not always a huge fan of architects, I have interesting stories about dealing with some of them. But, in this situation an architect would certainly be a god send.
 

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JimmyS
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Discussion Starter · #15 ·
got one, no help

The architect is a college friend of theirs. He doesn't stop them from wanting to change most of his planning. I guess I'm glad I'm not him last year, or the year before, when they were starting to figure this out!
We'll get through this.
Jim
 

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JimmyS
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Discussion Starter · #16 ·
update

"People aren't stupid. They know they are indecisive and a pain in the ass.

Hopefully they appreciate you for dealing with them and just pay the bill."

So, they agreed to pay for the extra meeting time. They don't think they're indecisive (they'll get back to me on that). I have plenty of documentation and meeting minutes. They just define "decide" different from anyone I've ever worked for before. Peace is restored for now. Thanks for the advice, and Happy New Year.
Jim
 
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