Deconstructing my mistakes. How should Joe Blow hire excavating/hauling/dozer work?

[jcims]

Hi Folks,

A day or so ago I had this feeling of vulnerability that was confirmed by the invoice i received today. A local hauling company charged us basically twice what our discussions to date had led me to believe we would be paying for some hauling and dozer work. I don't have anything in writing , but this is more a question of what's fair...not what can be put down on paper.

What would you recommend to Joe Homeowner when he determines he needs to hire help to accomplish a task? In particular, it seems that the entire risk of 'variables' (weather, stumps, long lines at the loader) is typically pushed upon the buyer...but when the buyer is ignorant of these risks, it becomes hard to defend against them. In this latest instance, i had some dirt hauled to my location, and the hauler asked for an hourly rate. Given the proximity of the source site (~8 miles), he verbally estimated it would take about an hour per load. Then when i get the invoice, it seems he stacked four trucks up and claimed 'wait times' were the culprit for an average of almost two hours per load. So i basically get half of the dirt hauled for the money and he makes a profit on the wait times he seems to have created. (There were some undisclosed fees as well, but that's another issue)

In previous situations with other local contractors, we had invoices for driveways go over because of bad estimates, excavation work go several thousand over because nobody took the time to factor in the existing grade and a stump that was sticking three feet out of the ground. Septic work went over, well, just because it went over i guess.

I'm a small business owner myself, and have no interest in being unfair to anyone. All i want is an honest assessment of the effort and a reasonable disclosure and shared responsibility of the risks. Unfortunately it seems like that is too much to ask around here (with so far only one exception), and folks just walk away from the table.

For the folks on the other side of the tracks (har har), am i an annoying customer or a foolish one? (Most probably both...) Obviously paperwork is part of the answer, but just how well defined can these projects be with all of the real variables that you do encounter. Again in this last case, all i really needed was someone to drive a dump truck all day between two local sites, and it still took a month of phone calls and disinterested dead ends to get it done.

Any suggestions are appreciated. I have a feeling this is going to end up being an expensive lesson.

 

[hoeman600]

sounds like yer contractor was just milkin ya . most of us on here would never do this but unfourtanatly this is a sign of the times. 2 hours 8 miles . was their a parade that day? was George Bush in town. Or was he simply loading with a mini excavator?:cool2 his 1 hour cycle times sound about right . allthow I dont know the haul route. 45 min sounds better. I would say lack of experience makes theise lessons hurt the most. Next time ask us first. ya never know one of us might just be near enough to help. good luck my friend with this hope it turns out well for you.

 

[pushcat]

Well, sometimes that's what you get when you hire the "low bidder". Just get the word out how bad he screwed you.

 

[jcims]

Thanks guys... The Good Lord had me take pictures of the material prior to any dozer work for other reasons, so I at least have a rough record of what was delivered.

hoeman600, he told my wife and i that cycle times could be as low as 45 minutes, but i threw that away as optimism and figured on the full hour. The rotten part is this dirt was provided by a local project (including the top loading) for free, but we ended up getting charged more for it (and waiting a month in the process) than if we would have just paid $150/load from just about anyone around here.

As an aside, he mentioned a 15% fuel surcharge but invoiced 20%. What are you guys seeing in general? With 20% we paid for about 110 gallons of diesel at yesterday's market price, ~24 of them to run a JD 450 dozer for ~4 hrs. I'm a numbers nerd, so i looked up fuel consumption on the 450 and it states 1-2.3gph (probably like my '20mpg' Expedition...harhar, jokes on me), but paying for 6gph to grade ~100 yards of dirt seems a little steep...maybe not. I'm sure the trucks could eat the rest up.

 

[landrvrnut22]

I never ever, do work on T&M. It is only advantageous for the contractor, the other person always gets screwed.

In the future, get a written agreement with a lump sum bid. Meaning, he is going to perform this work (ie trucking in topsoil, and spreading it 6" thick over an area of 100x200, with grading, seeding) for this price. Then if he botched the quantities, or wait/travel times, then its on his dime. You know the price, and know what you are going to pay. If you make changes, then your contract amount could change also. But discuss it when the change comes up.

I dont care if its your brother, or a stranger, always get it in writing. Take photos, before, during and after. This will help document the job, and gives visual proof of what occurred.

I would mark the bill up, and say you are only going to pay this much. Example 15% fuel charge and this many hours. He is the one that choose to run 4 trucks, and they could not dump fast enough, so they had to wait. I have also found that truck drivers tend to run in packs, and not evenly spread out. If you made a change that cost him time and money, he should be paid for that change. Be fair, but stand up for yourself. You can come to an agreement, if you sit down, face to face, and work it out.

 

[ForsytheBros.]

Jcims-

I read your post with interest. Our firm would consider you neither foolish nor annoying.

We are a small civil engineering construction company, performing both subcontract and prime work. To begin, i agree with all above posts and suggestions presented.

I've found,in my limited experience, that the following are valuable assets to us when teaming with other firms (or owners) on a project:

At the preconstruction/bid stage ,ensure an apples to apples comparison of bids. For example: we need to construct a driveway out of concrete. This opens up a myriad of variables that would make one's head spin: how thick will the concrete be, wire mesh, fibers, reinforcing bars, how many, what size spacing? What type of concrete, etc., etc. Is the subgrade compacted, and if so, with what? Roller, truck tires, somebody's boots? You get the drift.

Obvious considerations here, but spelling out the specifics of the project on paper will make sure that everybody considering the honor of working for and with you is of like mind. Those firms which can and will make recommendations on how to improve your finished project might prove especially valuable at this stage, as opposed to the "bid it low, and watch it grow" mentality, which occassionally rears its head later in the project.

Even mundane details such as using the house hose spigot for water supply or using the bathroom inside the house are important (especially if somebody is tracking mud through the house!)

Spell out details as early as possible, so everybody doesn't get sideways during/after the job.

I actually prefer public works contracts to some extent because of the level of effort employed to produce sets of plans and specifications that "levels the playing field"

I have found that unit item pricing and maximum lump sum contracts sometimes require me to have my ducks especially in a row. The smarter i am in planning and harder i work in execution, the greater the probability of profitability for our firm. Possibly your trucker (experienced i presume) could have given greater consideration to off peak times to make runs to the pit? Easy for me to suggest as i type on a computer, i understand.


Sounds like your trucker, in winning this battle ( immediate gratification of more cash now), may lose a small war later ( bad word of mouth reference for future work) This brings to mind the value of a good reference. A solid firm should never hesitate to offer past work references. Additionally, those references should be prepared to discuss of the bottom line of the past work, ie, over/under budget...

I enjoy it when those that we work with truly "partner" with us. If that involves our firm accepting some risk, fine. We also expect our partners to accept some risk as well. In my opinion, it sounded like your experience was not truly give-give, but more give on your part, take on the part of the truckers?

 

[digger242j]

There are two sides to every story, and the truth usually lies somewhere in between. That having been said, you're the one here telling your side, so, for the sake of discussion, we'll assume that it's exactly as you've related.

Personally, my suggestion (if you haven't paid the bill yet), is that you try to beat the guy up on his price a little bit. Suggest that scheduling 4 trucks was either incompetence (he falied to account for "the wait time", which he should have forseen), or dishonesty (he knew darn well that they spend half their time waiting, and he got you for twice what you'd have normally paid).

And, in all honesty, a truck sitting and waiting doesn't cost as much as one running up and down the road. Sure, the driver's wages and the owner's fixed costs are the same, but things like fuel consumption and wear and tear on the truck are negligable for a truck sitting still for extended periods. Had there been no "wait time" he'd have incurred more costs in that respect, so in asking for an adjustment, you're really not cheating him out of anything, are you?

(Also, in all honesty, if we were on the other side of the arguement, I'm sure most of us would tell you that "it is what it is, and you agreed to the rate, so pay up.")

I'd have to say too, that the whole "fuel surcharge" seems sort of bait and switch-ish. If he quoted an hourly rate, why not just adjust his rate for what fuel is costing these days? I'm curious--what was the base rate, and what did the surcharge total up to, dollars and cents wise? Am I reading correctly that you essentially paid for all the fuel, in the form of a surcharge?

Bottom line is that you may have just gotten an expensive lesson, but you have nothing to lose by attempting to ge him to lower the bill.

 

[jcims]

Hi again folks,

I appreciate the discussion and suggestions for improving my chances for a better experience next time.

Clearly there are two sides to this story. What i see as a misrepresentation the contractor sees as just one of those variables. All i know is we walked away from an offer to do this work for $55 per 5-6 yard load because, based on this gentleman's suggestion, we'd be getting 10-12 yard loads for $87 (based on his suggestion of ~1 hour per load). What we ended up paying was closer to $150/load to haul the material 8 miles...7 of which were freeway or country road. That's just trucking...the loader and material was free of charge.

I'm sure we'll come to an agreement, and both sides will feel burned. It just sucks that we spent a good bit of time and effort, found a great opportunity extended to us by some generous folks, waited a month for the timing to work, and still somehow let a spoiler swoop in and suck all of the good out of it. It's not all bad though, the yard turned out great, we just got some seed down today, and for the first time in my life i'm looking forward to mowing.

 

[LowBoy]

I had a negative experience years ago that led me to file a suit in small claims court twice in 1 year on 2 different homeowners that I sensed in the beginning to be "fair, stable individuals"...Turned out neither were anywhere near that assumption when it came time to pay me for my work. Fortunately for me, I was awarded full compensation in both cases by the courts, due to a simple concept...I did a good job based on the facts, and the defendants just didn't feel like paying for the work performed upon completion. (I had photos of the work to help me prove my case as well, very important.)

I did not have a written contract with either of those 2 individuals. Before filing the claims I consulted with my attorney and explained that there wasn't any formal contract, just a verbal agreement and handshake. His reply still rings in my ears to this very day. He said "Son...unfortunately verbal agreements and handshake business deals went out with high-buttoned shoes"...

From that last court session, I entered into paper contracts with every job I did thereafter. You barely get paid to do a job once as it is, let alone go through all that grief, lost time, bad references, etc.

Both those lessons were valuable, but hard to justify. The first issue was the result of me giving a guy a "substantially good deal" on a small 60' X 60' pond he wanted built in a swampy marsh. I had a 40 year retired veteran operator (and retired Veteran of the Korean war,) running the machine and the job by himself as I was elsewhere, and all it was that triggered the problem was the homeowner and the operator were two strongheaded men that disliked each other, resulting in my problem.
The second one was a supposedly reputable modular home dealer that I did a weeks worth of work around his personal house that the previous contractor abandoned (should've been a clue, huh?) and upon completion he requested an itemized bill for the job which was T&M. He disagreed with every item, citing he wasn't paying me for the first 15 minutes of time each morning to "warm up and grease machines"...and a bunch of other penny-anty stupidity. I lost my cool a little and stuffed my pickup in reverse and burned 2 ruts into that freshly graded shale driveway I just finished, and made a bee-line to the town clerks office to file a claim on that nut. Turned out they knew him on a first name basis...
Live and learn.

 

[greywynd]

I never ever, do work on T&M. It is only advantageous for the contractor, the other person always gets screwed.

Guess that depends on the contractor.

With the mini excavating that I do (going on 8 years of it now) I generally will give a ballpark price of "x dollars/hour, and about x number of hours". I also explain that I try to estimate the hours on the upper end of the scale, in case I run into unforseens...the huge rocks, the unknown stump buried just below grade, etc.

I would say 95% of the time I end up under in hours, and price. Which the customer is happy with of course. The other 5%...well...those are the ones where the unknowns were worse than anyone thought.....and generally what I will do is document the times/costs, and then if I can, I will try to get it down as close to what I had estimated as I can and still not lose money. (Sometimes break even is all I need......) Of course if I can I try not to lose money.

Of course, with the customer seeing you struggle with an issue rarely do I have any arguments even when I do have to charge slightly higher than the estimate, and rarely (I think maybe once or twice?) has it been a big markup, and before that happens, I explain to the customer what the problem is, and what solutions there may be to resolve it, and as best guess as to the costs involved.

I've even had customers give me tips, because I came in under price, and they said they were so happy I was honest with them about it.

 

[eRay]

Good references on the contractor is more important to me than cost estimates. I recently needed an excavator to repair a washed out lake bank which took about a week. I asked several people who I should get and got good feedback from 3 different people on a local operator. I had him look at the job and verify he could do it and got a price by the hour. I made several changes along the way and made sure he knew that I intended to pay for every extra hour I added to his work.He did an excellent job and I made sure he knew I appreciated his work and made sure I was there to pay him the minute he was finished. He was happy and I was very pleased with his work. Next time I won't even need to ask what he charges. He is worth it. Leave every customer feeling like you are worth your money and they usually won't mind paying for your services.

 

[SKOAL]

hmm i agree this could be a one sided story and for those who never bid time and material iam sure some have put the boots to joe public the other way to. I see your always the victim of overun costs and methinks possible change orders or you didnt read the contract or hear the verbal agreement for not being responsible for crap you dont know about without a ground survey or maybe more pipe for the leech field. I cant be the only guy thats gone to the pit and waited and hour to be loaded behind 30 or so trucks that being said if he had sizeable material he should of had it delivered at a set price and not have charged you time while not running the equipment.I have no problem having set prices but there almost always more then t and m. You may or may not have got a reputable contractor or maybe your a pain in the ass either way my mom always said its everybody else john it couldnt possibly be you!!!

 

[buddy605]

this is quite common I see alot of this type of work. Especially cost plus jobs, I swear they park the equipment and use buket and shovel.

 

[joispoi]

Hi. What´s the total dollar figure that is in dispute? Are we talking about a few hundred dollars or thousands?

 

[landrvrnut22]

I guess I need to clarify. I am a general contractor, and have subs that work for me. When my sub needs paid for an extra, change etc, I never do it on T&M, unless I know it will be less than an hour of work. Otherwise, I make them give me a price for the work ahead of time. Otherwise you end up hit with a bill for $5000 which you didnt budget on. While there may be a bit more time involved, the cost savings is ussually greater.

Same thing here, you want to know your costs up front, and make sure you are getting what you paid for. There is much less risk for the owner, and more risk for the contractor on a hard bid. On T&M, all the risk is on the owner, and none on the contractor. While this holds up in court, it is not ethical business practice.

 

[Boophoenix]

Ouch!!! I am totally against courts when possible but sounds like you got taken around the corner for a mugging.

If I'm reading this right and forgive my guessing here I'm not an estimator, but 100 yards of material is 5 tri axle trucks uncompacted dirt ruffly. Lets be genurous and say 8 loads after compaction ( being 4 trucks loaded light ).

An 8 mile haul threw a school zone all 8 loads is ( 60mins/15mph = 4 minutes a mile, 4 mins a mile * 8 miles = 32 minutes )

I can load my Tri in 10 minutes ( this is me driving and loading so has added get to machine start it and get first bucket time built in ) running over the side boards with a backhoe digging in packed dirt pile or straight of the field. My backup driver has never ran a backhoe or anything to speak of for that matter and he loads in 15 minutes. Lets add some time to get onto load site and dump site another 10 minutes. Lets round up and a total time of an 1.5 Hrs a load a couple of people turned infront of ya along the way and ya had to stop.

I'm not familar with the JD personally and don't beleave it requires looking up the specs, oh heck did it any way shows "Fuel tank with lockable cap: 36 gal. (136 L)" in the specs. If it's using that much fuel ( or even a 1/4 of a tank on the job you spec'd ) he needs to rob ya to cover his over head.


Just googled one of my runs this week and said "Driving directions to Indian Lake Blvd 21.0 mi – about 25 mins" this is one way. I ran this run for 10.5 hours and got 9 loads. Factoring in lights and traffic threw two rush hours. Picked a friend up, got food twice, and stopped at a store twice. I normally won't stop but once a day. Had to pick the friend up and she had to stop once for girl products before I get jumped on for milking the clock. Also wait times to be loaded with 20 trucks hauling out of this site and only one loader.

http://maps.google.com/maps?f=d&saddr=Clifton+Ave&daddr=36.324565,-86.598358&hl=en&geocode=Fa65JwId9mPT-g%3B&mra=mi&mrsp=1,0&sz=15&sll=36.328403,-86.59883&sspn=0.018048,0.028281&ie=UTF8&ll=36.164626,-86.776028&spn=0.072342,0.113125&z=13


By the sounds of your side of things this kind of stuff is what gives us all a bad name!!!!

 

[jcims]

Thanks for the ongoing discussion folks. The trucker and i settled on a figure a bit over half-way in my favor. On the downside, the overage on my end could have rented a mini-excavator for a weekend to do some much-needed drainage work, on the upside we both acted like grownups and life is moving on...quite literally. I can see the little patches of green stubble that will ultimately be my front yard.

I do have a quick question for the experts. The soil is kind of, uh, loose...in that a pickup truck driven across even the driest parts would probably leave a 1/2" rut...i can even feel it give a little under my feet.

Should i try to roll this (probably too late with seed down) or just let mother nature do her thing and just keep the toys off of it

 

[digger242j]

Same thing here, you want to know your costs up front, and make sure you are getting what you paid for. There is much less risk for the owner, and more risk for the contractor on a hard bid. On T&M, all the risk is on the owner, and none on the contractor. While this holds up in court, it is not ethical business practice.

I have to disagree that it's not ethical.

If there's risk involved, the contractor is going to build an amount into his price to cover that risk, which is only fair. We all know it as the "CYA factor".

Ideally, over the long run, things will balance out for the contractor, because sometimes he'll wind up ahead, which will offset the times he'll lose. On T & M jobs, the owner pays only for the work done on his job. He's relieved of the possibility that he'll be paying for (in the form of the contrator's CYA factor), the risks that accompany some other customer's job.

As long as everyone is on the same page in that regard, I don't see an ethics problem.

 

[SKOAL]

hey blow joe the other side of it

blah blah blah honest abes escavating cause i went into business to make a paycheck? or did i get in to kill it whenever possible?union = paycheck maybe 200,000 house umm diesel truck ,iam on top of the world ma or maybe make 700 to 5000 or more a day bangin work out???? If you want to make it take what the market will give. do a good job dont cause the customer hertache but buy all means get the money.

 

[joispoi]

blah blah blah honest abes escavating cause i went into business to make a paycheck? or did i get in to kill it whenever possible?union = paycheck maybe 200,000 house umm diesel truck ,iam on top of the world ma or maybe make 700 to 5000 or more a day bangin work out???? If you want to make it take what the market will give. do a good job dont cause the customer hertache but buy all means get the money.

Err...what´s your native language?