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What Do Leaders Do?
On the jobsite, your crew hits an underground water line not shown on the plans. With water now spraying over excavated and open footings, should you wait for a signed change order to fix the broken line, or take immediate steps to mitigate the damages?
Why I didn’t get changes approved in writing
#1: “I’m too busy right now to get the signature.”
#2: “I trust my customer, he seems fair!”
#3: “Don’t worry, I’m friends with my customer.”
#4: “We’ve got to keep the job moving, I’ll get it later.”
#5: “I don’t want to rock the boat this early in the job.”
#6: “My customer told me we’ll work out all the extras at the end of the job.”
Field Change Memo
Re: Broken Water Line
Additional Cost: Cost Plus Work to be submitted and approved within 5 days.
Additional Time: 2 extra days
Charge the right price
The owner or contractor can require the subcontractor to perform the work lump sum” or fixed price for extra work agreed on prior to starting the work. With a detailed cost breakdown approach, the subcontractor can be required to present the detailed estimate with backup. If the general contractor or owner isn’t satisfied with either the lump sum quote or the detailed cost breakdown price, he can usually force the subcontractor to perform the work on a cost-plus basis.
Many contractors only like to work on a lump sum basis. I’ve been in business a long time, and I know what things should cost. If a subcontractor forwards an extra charge to me in the amount of $750 for a $200 item, and I submit the bill to my customer for approval, my customer will think I’m either trying to gouge him, or I don’t know what things cost. I then have to go back to my subcontractor and tell him to give me a fair price. I now don’t trust my subcontractor, and he doesn’t like dealing with me. When a lump sum estimate is rejected, negotiating over price ensues using the detailed cost breakdown method. Agreements begin and enemies are made at this level. Charge the right price the first time!
Extra work takes extra time
Get paid for what you do by putting it in writing, every time. Start using this Field Change Memo system and you’ll improve your collection ratio.
|Last Updated on Friday, 04 June 2010 11:17|