We recently completed a job that required some other professional services. I sent the company a scope of work and got back an estimate, I added that amount to my proposal. We got the job so I told the sub to get to work. There was no change in the scope, none. There was no misunderstanding conveyed to me about the scope. There were no questions asked about the scope after the estimate was given. The reason I bring this up is I got a bill over 3 times the estimate. Although it's besides the point, we came out in the hole on this job and there is no money in the project to pay that bill. I did however, get the client to agree to reimburse us enough to pay almost double the original estimate.
Has anyone else ever run into something like this, and if so, what did you do?
By the way, there was no signed contract.
Without a contract it sounds like a tough situation to deal with. The last time I had to have a sub on a project, I included their estimate up front and told the client that the sub's charges would be added directly to my bill regardless of how much they were. I couldn't make any profit from the sub, but it kept anything like this from happening.
No contract is a big problem. We always get a contract with subs.
What did they say when you reminded them of the quote?
Have you had an ongoing relationship with them?
It wasn't a quote, it was an estimate. Not a very good one at that.
No, I've never worked with this outfit before. It has definitely been a learning experience. The next time, I'm going to make the next sub put something in writing, then I'll double their price and add that to my contract.
I always use a contract with subs, and I usually mark them up 15%.
Shysters!
It should be legal to shoot them. At least during a special hunting season, if no other time. They exist in every profession and trade.
Shysters!
Send them a check for the estimate amount and tell them to hire an attorney if they want to get the rest.
Shysters!
Well, we've told them we'd give them the estimate, PLUS the amount extra I was able to get from the client, the total of which is nearly double the estimate, IF they will send us a revised invoice. We got paid on the job last week. I've been waiting two months for that revised invoice. I'm tempted to send them a check and tell them to hire a lawyer if they want the rest. The unpaid amount wouldn't get you a day of a good lawyer.
Get a signed contract is what I did.
What was their reason for being 3x over? Problems? Poor estimating? Did they give ANY indication of why?
Shysters!
first off always get a signed contract. second send them a check for the estimate and a letter stating that by accepting the payment, they are paid in full.
Shysters!
There's an engineering firm nearby notorious for such practices.
A few years ago I provided a proposal for the surveying, engineering and permitting for a 12-lot subdivision. Their proposal was 1/10th mine. I advised my client to get an ironclad agreement with the other firm.
He returned when they had Change-Work-Ordered him up to 1.5 times my proposal or 15 times their original estimate. He asked how much for us to complete the work and I responded with the original estimate.
> We recently completed a job that required some other professional services. I sent the company a scope of work and got back an estimate, I added that amount to my proposal. We got the job so I told the sub to get to work. There was no change in the scope, none. There was no misunderstanding conveyed to me about the scope. There were no questions asked about the scope after the estimate was given. The reason I bring this up is I got a bill over 3 times the estimate. Although it's besides the point, we came out in the hole on this job and there is no money in the project to pay that bill. I did however, get the client to agree to reimburse us enough to pay almost double the original estimate.
>
> Has anyone else ever run into something like this, and if so, what did you do?
>
> By the way, there was no signed contract.
Let's look at this from a couple of points of view.
First, from Tommy's side of things. He probably feels like the sub has screwed him. How could they not know ahead of time what the work would cost? Hold their feet to the fire and make them do what they said... right?
Ok, what about from the sub's side of things. "We gave the client an estimate. Now they want to treat the job like it was a fixed price deal. If we had been below the estimated price you can bet your backside they would not have paid the estimate.
I hope everyone saying to pay the estimate and call it a day always provide their clients with lump sum prices. If not, what is the difference in what you do and what these guys have done?
Finally, pay attention to how Tommy and most of the responders feel about this. Now ask how your clients feel when you proclaim that the best you can do is provide an estimate and not a fixed price.
Larry P
PS: Tommy, won't help this time but next time and every time, contract man, contract.
Larry,
> Ok, what about from the sub's side of things. "We gave the client an estimate. Now they want to treat the job like it was a fixed price deal. If we had been below the estimated price you can bet your backside they would not have paid the estimate.
>
This is what they call "time and material not to exceed" which is the losers bet. All the risk of a lump sum without the carrot. Unfortunately these seems to be the norm in providing services to the engineering community, booth private and public.
Bottom line, get a contract that forces them to justify additional funds over the estimate before they do the work.
> >
>
> I hope everyone saying to pay the estimate and call it a day always provide their clients with lump sum prices. If not, what is the difference in what you do and what these guys have done?
>
> Finally, pay attention to how Tommy and most of the responders feel about this. Now ask how your clients feel when you proclaim that the best you can do is provide an estimate and not a fixed price.
>
> Larry P
>
> PS: Tommy, won't help this time but next time and every time, contract man, contract.
Yeah, but 3 times the estimate with no warning?
Yeah Larry, this was certainly a learning experience. My opinion is that they lowballed the estimate to get the job. I had never dealt with this type of service before, but I suspected that their estimate was low. However, knowing nothing about their work, I certainly wasn't going to question their methods.
My problem is if you triple an estimate and there is no issue with the scope, either you don't know what you're doing, or you're dishonest. I was there when they showed up. If they had gotten out of the truck and said, "Holy crap, this isn't what we were expecting" the situation would have been entirely different. However, no such sentiment was ever conveyed to me. If I pulled up to a mechanic shop and asked, "how much to change the oil in this truck" and he tells me about $40, I have every right to be outraged if I get a bill for $130.
I suspect they won't be in business too long.
"I sent the company a scope of work and got back an estimate" and that wasn't in writing? Did you take notes during your phone call? (Normal course of business)
I agree, pay the estimate and make them prove what was different from the scope you provided and what they produced.
If it comes to court and you're standing there with an email estimate or your phone records I think a judge will be hard pressed to enforce the invoice price over the estimate!
It's worse, all contact was via email, and I never delete email.
Next time tell them you want an estimate with an upset price.
X hours at $Y rate up to a limit as submitted in the quote. Any work beyond the upset price must be negotiated and agreed to by all parties, usually at the same rates.
