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Hourly rate or "contract"?

Scrub Puller

Senior Member
Joined
Mar 29, 2009
Messages
3,481
Location
Gladstone Queensland Australia
From reading these pages over the past few years it seems to me that most dirt jobs in the US...even small ones are done against a quote. Times may well be changing and it could be the same here in the cities but, around here in the sticks it’s still generally hourly rate work as it was back in the ‘sixty’s.

The problem is there are some slack ass “contractors” who have no idea of how to run a business. I have hired a couple of excavators and dozers during the past few years and none of them have been satisfactory when it comes to time keeping and invoicing...I query everything unless I receive an itemised account.

One bloke reckoned he worked on engine hour meter hours...and on the first day the twenty five ton Hitachi started in the morning and ran until half past five that night. I asked him for the hours and he read it from the meter...and at $130 an hour you’d think he’d mention tenths. He got a little agro when I pointed out that on half a dozen occasions he’d been wandering around the paddock with his ear stuck to a phone...plus a short lunch break and smoko with an idling machine. I gave him a cheque and told him he was finished and he’d better phone in for the float.

With a one man operation it is a pain in the butt to be taking time out estimating...far better if you can just hook into it and get the bugger done. The thing is any job takes what it takes...if you have good machinery suited to the job, a competent operator and a fair hourly rate there is no way to do it better. In most cases the client is the “winner” because if I’m quoting I’ll add a contingency factor.

For instance I would fly over a block of scrub (or ride it) with the client and would maybe estimate that it should cost around two dollars fifty an acre... but would point out that I would quote three bucks if he wanted it pulled “contract”. I should add that in those days D9G’s hired at fifty to sixty bucks an hour and we threw the chain in free.

To work this way you have to know your costs and work at the high end of the rate scale...this allows some “wriggle room” if things go a little pear shaped. You need to be impeccable with your record keeping and bookwork. All our machines had a specially printed log book. The operators were obliged to have a decent watch. If we were pulling (with two or three tractors) start times and stop times for each run were recorded with notations with the reason for stopping such as “broken chain”, “broken blade rope”, “smoko” or what all...the client was charged by the minute for the actual hours that the machines worked.

For a while we also ran we also ran Kienzle clockwork vibration card recorders but they were unable to cope with the dust and vibration. At the finish of the job the often grimy dog eared originals from the logbooks (and the recorder cards if available) were supplied to the client with the invoice showing a breakdown of the individual jobs, the machine number, the hourly rate and hours and minutes worked.

With this strategy we were able to build up a reputation as honest brokers in a huge area of Queensland and apart from Government work we were rarely asked to quote.

On the smaller scale it realy bugs me to see folks getting duded by blokes quoting exorbitant prices for straight forward painting, house yard fencing and roofing jobs...and then hear them skiting later that they’d “killed it” putting up a fence for some little old lady...I suppose it’s lack of competition, probably a condition that doesn’t apply so much in the US?

Any comments?
 

mitch504

Senior Member
Joined
Feb 27, 2010
Messages
5,776
Location
Andrews SC
I rather work by the hour, but there are very few customers here who will go for it, so, like you said I put more on when I quote a set price for the job.

I have actually had quite a few customers get mad when I wouldn't let them have their cake and eat it too, by doing the job for the lesser of the two, by the hour or my quote price, whichever is cheaper.
 
Last edited:

Monte1255

Senior Member
Joined
May 6, 2008
Messages
317
Location
Minnesota USA
Occupation
Farming/forestry/TSI
With me it's strictly by the hour, but also it's strictly time on the job not with phone stuck in my ear or lunch break. Never had any complaints and I intend to keep it that way.
 

Pops15

Member
Joined
Jun 7, 2011
Messages
9
Location
IL
I'm a residential remodeling contractor. Not only is nearly all of my work done on a quoted price, its done only after I have a signed contract. My subs all give me firm prices in writing.
 

Randy88

Senior Member
Joined
Feb 2, 2009
Messages
2,149
Location
iowa
I do most of mine hourly off the meter, some around me do hourly from the shop and back again it starts at the shop and quits when they get back and thats including lunch and coffee breaks, idling, cell phone time travel you name it, others do it off a wrist watch time, it all depends on what it is and who's doing it. Bidding isn't a big deal around me, most have it figured out its cheaper by the hour for them in the end, I'd love to bid everything but thats not the case, and one guy bids jobs and has a clause in his bid that if it exceeds the amount bid he charges extra, so tell me how he gets by with that.

It also changes in neighborhoods, one area will accept to the tenth of an hour others want it rounded to the half hour, don't ask me why but I've been confronted about billing for tenths and not to the half hour so in those neighborhoods we bill to the half hour even if its more, which I've never understood but makes them happy and me more money.
 

BostonBender

New Member
Joined
Aug 5, 2011
Messages
4
Location
Boston, MA
<snip> ...when I pointed out that on half a dozen occasions he’d been wandering around the paddock with his ear stuck to a phone...plus a short lunch break and smoko with an idling machine.

<snip>

Any comments?

Hi Scrub Puller,

Your comment resonated with me. One of the main reasons why I'm here is to investigate buying some machinery for an incident almost identical to the one you described.
 

mr.follin

Member
Joined
Aug 16, 2011
Messages
8
Location
Mississippi
I'm a plumbing/electrical contractor. For the most part I work by the hour. I charge by the hour meter for the machines plus charge for time on job for personnel.
 

CM1995

Administrator
Joined
Jan 21, 2007
Messages
13,466
Location
Alabama
Occupation
Running what I brung and taking what I win
I rather work by the hour, but there are very few customers here who will go for it, so, like you said I put more on when I quote a set price for the job.

That's the same way around here. Everyone wants a firm price, what they don't understand is by the hour is 9 times out of 10 cheaper. So give the customer what they want.

It's really all about the risk of the job and what that risk is worth. The client is willing (whether they understand it or not) to pay more for you to take the risk involved with the job when they want a "bid" price. That risk has value in our industry and should have a $ figure attached to it. The projects I bid always have a contingency factor added to it.

Problem is there are still jacklegs out there that are bidding jobs for way less than what it costs to do it, much less make a profit. I would've thought they were all gone by now.:cool:
 

Randy88

Senior Member
Joined
Feb 2, 2009
Messages
2,149
Location
iowa
Bankers want no surprises, thats what it gets down to for some I've found, they want hard numbers to go by even if its a higher price.
 

mitch504

Senior Member
Joined
Feb 27, 2010
Messages
5,776
Location
Andrews SC
It's really all about the risk of the job and what that risk is worth. ... That risk has value in our industry and should have a $ figure attached to it.

CM, that was the point of my second paragraph. When people ask me to do the job hourly but with a maximum charge cap; they are really just asking me to take the risk without compensation for it.


Problem is there are still jacklegs out there that are bidding jobs for way less than what it costs to do it, much less make a profit. I would've thought they were all gone by now.:cool:

All the jacklegs that were there 3 yrs ago when the economy died ARE all gone. The problem though is the same that we've always had: There is an endless supply of jacklegs waiting in the wings to buy the equipment the others just lost.:pointhead
 

AT&SW

Well-Known Member
Joined
Apr 16, 2011
Messages
60
Location
central Fl
Occupation
equipment owner/operator
The only clients we do hourly are clients we have worked with in the past. I agree I am about sick and tired of the jacklegs that continually pop up underbidding everything.
 

dayexco

Senior Member
Joined
May 21, 2005
Messages
1,224
Location
south dakota
i'll only work per contract...i can typically outproduce money wise by a BUNCH those who bid strictly hourly. they want $130 hr/for a 210 sized excavator...i can throw at least 100 yds an hour...at $3.75 a yard.....keep on charging by the hour...i'll go by what i'm capable of producing
 

Randy88

Senior Member
Joined
Feb 2, 2009
Messages
2,149
Location
iowa
Dayexco, I have a question for you using your figures, your basically charging or bidding that machine at 375 per hour then and your bidding against those that are charging 130 per hour, if your winning the bids then they are figuring on even more than 375 per hour or if they were less they'd get the jobs instead of you? Seems to me your cheaper then they actually end up being in the end so I"m not seeing how they are only charging 130 per hour? Not to be smart just asking if there's something I missed or didn't understand in your post.
 

Scrub Puller

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Joined
Mar 29, 2009
Messages
3,481
Location
Gladstone Queensland Australia
Yair...I don't quite get it either dayexco...you'll throw a hundred yards an hour into trucks at three bucks seventy five or is that dig to spoil/baling out a hole...and what sort of digging, shot rock or sand?....and how do you work it out if there's a hold up with the trucks...I never used to mind waiting with a full bucket. Not much was wearing out and the dollar clock was ticking...and the way I see it provided you get fair and reasonable rate there is not that constant need to push the jigger hard.
 

dayexco

Senior Member
Joined
May 21, 2005
Messages
1,224
Location
south dakota
you have to be a pretty bad operator not to cycle 2 times a min. average, right? less than that, i'd park it and ask for meals on wheels....1 yd bucket that's 120 yds. an hr.....i went down to 100....shop your area, most 45k lb. machines..you'll rent w/operator for $130 an hr...i get $3.75 a yd. do the math.
 

dayexco

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Joined
May 21, 2005
Messages
1,224
Location
south dakota
Dayexco, I have a question for you using your figures, your basically charging or bidding that machine at 375 per hour then and your bidding against those that are charging 130 per hour, if your winning the bids then they are figuring on even more than 375 per hour or if they were less they'd get the jobs instead of you? Seems to me your cheaper then they actually end up being in the end so I"m not seeing how they are only charging 130 per hour? Not to be smart just asking if there's something I missed or didn't understand in your post.

what i'm giving them, is a completed cost price...i don't care what their hourly rate is. hrly bidders worry more about the time they have stuck in the job...i'm worried more on how many yds i have in the job, and how quick i can move it
 

dayexco

Senior Member
Joined
May 21, 2005
Messages
1,224
Location
south dakota
either way your bidding it on time... time on the job or what you feel you can bail in an hour. Sounds like an easy way to confuse your customers.


and how would that be confusing? customer has 100 yds to move, i charge him $375..he knows up front...some hourly clown comes along, tells him it'll be $130 an hour...well, i would think the customer would wonder....gee, this take 1 hr...or 6 hrs?
 

Scrub Puller

Senior Member
Joined
Mar 29, 2009
Messages
3,481
Location
Gladstone Queensland Australia
Yair...dayexco, this is interesting. You quote three hundred and seventy five bucks and yet you're saying that an average hand on a similar jigger on hourly rate will bail the hundred yards for a hundred and thirty?

You're doing good mate, I think you need a bit of competition though, those numbers don't add up at all...it wouldn't work round here.
 
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