Time & materials

Thanks for the replies.

I was thinking about using the lump sum bid as the top end cap for the job even if it was done t&m. Also figured I would have developer sign time slips @ end of each day. Of course I will include qualifications in contract for unforeseen things ie pumping, blasting etc.

I really think the guy is doing this as a way to see what the material costs vs. labor. He won't save much money buying material himself because he won't get my discount on pipe & structures.

What is the highest amount you guys would do t&m job assuming signed contract. A big job to me may be small job to you or vice versa. BTW, I would never work for anyone w/o signed contract.

T&M work can be difficult.

The only time I ever engage in something like that is when the scope of the work is so difficult to nail down, that it would be nearly impossible to quote a fixed price.

The way you described it the customer is hoping to be able to save himself money on T&M while taking it out of your profit margin on the fixed sum contract, I don't like these kind of shenanigans. How you handle it is up to you.

As far as markup of supplies and materials, if you have to handle the ordering, getting and paying, you need to be getting a percentage. If they are handling all that, then obviously you would not be due any markup, but you should get paid if they screw up, and your crew is standing around waiting on supplies.

When working T&M you must charge for everything. Tools and equipment that you normally have available for your use have to be taken into account.

Need a chain saw or cut off saw to keep things moving, maybe only used it for a few minutes or an hour....you must charge for it.

There are a lot of other things to think through and you must have a good agreement if you plan on doing T&M work.

Upchuck said:

Thanks for the replies.

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What is the highest amount you guys would do t&m job assuming signed contract. A big job to me may be small job to you or vice versa. BTW, I would never work for anyone w/o signed contract.

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I did one T&M job that snow balled from what I thought would be 6 weeks, to over 6 months. But this customer was excellent to work for and we had no billing issues. Not one. I was fair and honest with them and they paid fully and on time.

It was a very rare situation.

Thanks tgeb

I hate the way construction has headed. Unfortunately, with the lack of work in our area I'm trying to work with clients any way I can. I doubt that this job will be done t&m. In the past I would have told developer straight out I wouldn't even price t&m. As long as I don't have to sacrifice quality of work or desired profit I will put up with a lot that I wouldn't before.

tgeb said:

I did one T&M job that snow balled from what I thought would be 6 weeks, to over 6 months. But this customer was excellent to work for and we had no billing issues. Not one. I was fair and honest with them and they paid fully and on time.

It was a very rare situation.

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signed contract it the way to go... like tom said, t&m jobs that go smothly are very rare at best... and when they go bad they tend to be really bad. God fobid a problem that throws you out of wack in a bad way... if you need the work... be slightly conservative on what your throwing on top for yourself... trust in your number has gotten me farther than all the time and material jobs in the world.

I tend to agree with the others here. Hourly is very appealing because it looks very secure but it can lead to problems.

If you go on a contract lump sum its clear cut. Of course its based on what you percieve the work to be in hours against your rates but it always seems to blow a head gasket when you charge someone a seperate line item for plate compactor use. Most of the time they think your trying to nickel and dime them.