Masonry Magazine June 2010 Page. 37
CONSTRUCTION
AMERICA'S #1 ACCOUNTING SOFTWARE
• Cost Plus - Actual costs of the work plus markup
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. In every change order request, always include additional time required to perform the work, even if it doesn't affect the critical path of the project. No exceptions!
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. IMAS
Best-selling author and professional speaker George Hedley the author of "Get Your Business To Work" and "The Business Success Blueprint Series," available on his website at www.hardhatpresentations.com. His proven system to earn more, work less, build profits, lead people, and generate customers has helped thousands of companies in multiple industries. To receive his free e-newsletter and Profit 101 report, attend a two-day Profit-Builder Circle boot camp, or hire George to speak at your next event, email gh@hardhatpresentations.com, or call 800-851-8553.
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June 2010
MASONRY 35