Am I off base?

[rossaroni]

I'm doing a new home for a long term customer of mine. No quote on it, and he knows what my rates are from years of working with the guys.
The basement is 50 x 30, with 9 ft of excavated depth, and they wanted 3' of overdig on all sides. I figured that it should take a day and a half with my equipment to dig, and about a day to backfill it to existing grade, sight unseen, but no quotes or figures given.
The fun starts...there was an old home that was demolished, and the fill was thrown in, nothing compacted, and completely saturated. What a mess. We hit solid rock from 3 foot on, and had water in the hole the whole time. Spent 4 days on it between hammering, loading trucks to export the rock immediately, and cleaning up the spoils piles. Luckily I found a guy that would take all of the rock about 3 miles up the road.

Concrete guy came in and poured footers, and then we got 3 feet of snow. Contractor calls, says plow the lot, dig out the footers, and get it piped up and stoned in...we're putting up walls in 3 days...
so I dig out all the snow, clear the footers, and put 80 tons of stone in it....

walls go up, and he says we have 3 weeks until framing...until he calls me the next day to say framers are now starting monday. Well, that was friday. So I drop another 22 tons around the perimeter, install separation fabric, and I peeled off all the frost from the spoils piles, stuck it to the side, and got the job done on this weekend. It was 18 on Saturday, 10 degrees on Sunday.
That to me is a milestone. The basement is done, so send a bill.
Well wouldnt you know it, my email pops up with the "are you kidding me on this price?" email at 9 am this morning. His thoughts are that the job is worth about $6500. I'm, um, a bit north of there.
Most of my work is commercial pipe, and its almost all bid, and apparently I'm competitive, or I guess I wouldn't be working. Tell me the truth, guys, which one of us is wrong? And if its me, how can I get it right? And yes, shame on me for not having a contract up front:Banghead

 

[Jim D]

No, you are not 'off base'.

Long term customers and handshake deals are valuable. This guy is no longer one of them. Too bad for him.

 

[Delmer]

Well Jim, doesn't that depend on whether he pays the full bill or $6,500? It seems like he was looking for a quality contractor at a cut rate price, but he "knew the rates" so he pays or it really gets ugly.

I'm curious, are you more than double the $6,500?

 

[rossaroni]

Not quite. Just a few dollars over 12k, but that has some generosities built in. I wish it werent the case, but rock is a game changer, and most are shocked at what it usually costs. With fills of .6 and rock that was over 3', I really didnt have a choice on the export, either.

 

[Tracklayer]

At this point, I would try to work with him to justify the price due to the unanticipated rock that you encountered. How did he come up with the idea that it should be $6,500? A handshake deal is fine if you know what you are agreeing to. It sounds like there was some lack of understanding about that. The best you can hope for is to show him your time and material and get him to understand that his idea of price is too low for what had to be done.

 

[Twisted]

Handshake deals are fine. I do all of my work that way. Heck I've never even met some of the guys I've done work for. That said, one of you knew the job was going south and not going to be a regular job. It should have been mentioned especially if you're friends. Lack of communication causes these issues. Not laying the blame on you but did you give the owner fair warning of the problems you were encountering? Did he see it wasn't going as planned? Surprises never are well accepted. We have them with equipment dealers and owners have them with us contractors.

In situations like this I tell them the costs of materials plus my expenses then negotiate my profit from there. Some get the raw deal but repeat customers will get a better cut to keep business. Win some, lose some. It's tricky weather you work by the hour or bid your jobs.

Good luck however it goes for you.

 

[Jim D]

Delmer, what I meant was when it gets tough, you will find out who is loyal to you. It sounds like rossaroni did very good for his customer.

rossaroni, I hope it ends well. Lots of talking, humble talking, probably will help you. 'Rock clauses' in contracts are good....

PS: Your price, to me, seems very fair for the customer.

 

[rossaroni]

Gentlemen, Thank you for your responses so far.

Tracklayer, the customer claims to have done two of the same homes that both had a "boatload" (his words, but can't tell me if it was a Carolina Skiff or a Viking) of rock removed for that price. The invoice for the job was line item and very detailed. Last night, I wrote a respectful letter for him and his boss that I will be delivering in person to them today which spells out each change that would be required to achieve his price request, like removing all profit from materials and the reduction that would generate, and how hauling, snow removal, stoning in, etc, would have to be "complementary" and "absorbed". I hope that when he sees that I would have to work for no markup, eat all of the fuel and trucking, and reduce the billing labor rate to $12 per hour, he might realize something is wrong on his end. With all due respect, I wouldn't show up for work for that, I'd be too broke to afford the gas to get there.

Twisted,
I follow a gentleman by the name of Dave Ramsey, and in his book Entreleadership, he recommends that in times of trouble or uncertainty, it is necessary to "over share". I heed that advice. First sign of rock and water he got a phone call. He didn't answer, so I left him a message. When I got done leaving the message, I snapped a picture and sent it to him with a text description of the situation. Heavy rain...heres the job conditions pic, snow..here's the job conditions..I'm done for the day...heres the condition of the job. Am I a pain in the butt? Some guys absolutely love it because they don't have to check in on me, some hate it because they don't want to be bothered by doing their job. I guess it depends on your personality, but my reasoning is three fold - 1) If he's in a meeting, and cant check his voicemail, he can look at the pic and offer an immediate response on how to proceed without excusing himself to call me back, since I am hourly, my time is money...2) A picture can save him and / or his boss a drive to the job...it truly is worth a thousand words, and...their time is money, too...and 3) Unfortunately I've been on the defensive end of things before. You might be able to delete a voicemail and say that you never got it, and I really have no way to prove what I said, either, but if push comes to shove, its awful hard to disavow not receiving a text / pic message or being unaware of the situation when I have copies of them on my phone of the pic and description with their response to it.

Jim D,
Thanks for the vote of confidence on the pricing. I called a site contractor friend of mine, and without telling him the politics or my costs, showed him pics, gave him size and quantities, and lo and behold...his number is +=TADAH+= ...12k on the low side.
I'm hoping for a good response from them on this today. I'm not a "we"ll make it up on the next one" guy, because you never do. Handshake dealings may have to become a thing of the past here.

 

[DIYDAVE]

Stick to your guns, he is trying to use you. I operate a lawn service, with some light excavation on the side. Last year, I had a guy get about $1200 behind in his grass cutting bill. I cut off service, and he finally paid me cash when his grass was about a foot tall. After getting paid in full, cash, I left a little note in his mailbox, saying I can no longer service the account, due to past payment history. I left him in no worse shape than when I first met him...

Thing you should have done, is to communicate better, as others have said, and you need to set up, so you collect, as you work, so you have some leverage. Good luck, education always costs money...

 

[Tags]

Hitting rock is a game changer weather you've worked for someone for years or it's the first job. When I hit rock and it needs to be hammered weather I gave a price originally or not, it turns into a time and material thing. Day rate for hammer equipped machine and day rate to remove the spoils with another machine, plus hauling fees. When it happens I always have a job meeting with the contractor/ homeowner and make sure we are all on the same page before any work continues.. If he's a reasonable contractor he should pay you and pass the cost onto his client.

 

[DoyleX]

When the all the bads started showing up did you get in contact and tell him of thre unforeseen conditions and ballpark pricing? Next action is a change order form. I think your pricing is really fair. That situation in this area would be double.

 

[Jonas302]

Sounds like you did communicated very well only mistake was not a bid and contract, your letter to him is his last chance of redemption as a customer after that put a lien on the house and make sure the new homeowner knows whats going on

Honestly you should have walked when receiving the ridiculous changes in scheduling that is not how a good contractor does business

 

[Delmer]

Sorry Jim, I was kinda getting the mistaken impression this was a long time commercial customer who was building his own home and was out of touch and maybe in over his head.

From everything you've said, this sounds like maybe he's been getting too good a deal in the past, if he thinks he's able to take free advantage of your flexibility, etc. etc. without paying extra. He's every bit as responsible for not having a contract as you are, you and he have a history of working without a written contract and a history of payments for that work, that will be worth something in court. What does he have as a defense "it shouldn't cost this much"???

 

[kshansen]

In post #8 it does sound like you kept him informed of what was going on and the ground conditions you ran into. I'd be very careful to save a copy of those voice mails and pictures attached to them.

Your communications sound like what I would like to have from a contractor, some of the ones I've dealt with can't seem to understand the importance of that. A simple call to say "Hey, the dog got sick need to run him to the vet, I'll be a bit late today!"

Hope this guy understands where you are coming from and makes good on this deal. I can't see how you can even get out of bed and drive to the site for $12.00 an hour.

 

[movindirt]

With no quotes or figures given up front I don't see where he has room to argue, you are not at fault, he is, if he only wanted to pay $6,500 for the job he should have bid it out and taken the bid closest to that.

 

[apetad]

$12500 is ridiculously cheap

 

[td25c]

Handshake deals are fine. I do all of my work that way. Heck I've never even met some of the guys I've done work for. That said, one of you knew the job was going south and not going to be a regular job. It should have been mentioned especially if you're friends. Lack of communication causes these issues. Not laying the blame on you but did you give the owner fair warning of the problems you were encountering? Did he see it wasn't going as planned? Surprises never are well accepted. We have them with equipment dealers and owners have them with us contractors.

In situations like this I tell them the costs of materials plus my expenses then negotiate my profit from there. Some get the raw deal but repeat customers will get a better cut to keep business. Win some, lose some. It's tricky weather you work by the hour or bid your jobs.

Good luck however it goes for you.

Well said .

Keep customer in the loop at all times good and bad . Let them make the decision as it's there money getting spent .

Side note on working in the winter ...... It's about the worst time to start a project like that with snow , wet weather & so on .

At certain times of year it's going to cost more due to site conditions . Average joe that wants to build something wont know or appreciate this until they get the bill on it .

Part of the job is informing them up front on this . Do you want to proceed now in January come Hell or high water ? Or wait until April or May when site conditions are better ?

 

[Welder Dave]

Tell him to pay or you'll undo the work YOU did. I had a pole shed put up last year and although it wasn't an issue, the fine print mentioned that if rock were encountered when drilling the holes it would charged extra by the hour. That's just common sense. This guy is trying to use you. Pay the $25 or whatever it is and file a lawsuit if he continues to be an azz. If he thinks you charged too much, he'll like it even less when he pays a lawyer $500 to tell him he owes the money and thousands more if he takes a lawyer to court. You don't need a lawyer, you've got everything detailed. You can put a contractors lean on the property that could make him see the light.

 

[thepumpguysc]

Personally, I think the contractor should be held liable for most of it..
Changing a dead line from 3 weeks to the next Monday is crazy.. and... in pizz poor conditions..
What if you had another job to do and needed that 3 weeks??
Hope it works out in your favor.. Good luck..

 

[CM1995]

First of all situations such as these suck, I've been there before. It sounds like you communicated the changing conditions well. Pics are worth a thousand words sometimes.

$12K is a very reasonable price for the contractor and not a large profit maker for you. Stick to your guns, this guy is probably setting the table to beat you down on your price - the old go in very low in order to "meet" in the middle tactic.

As far as court goes, try to stay away from that route. Lawyers are expensive and the court system does not work like most think it does. That comes from bought and paid for advice.

If it comes down to it a lien will get you paid quicker as the builder can't close the house with a lien hanging out there.