Archive for the ‘Contractors’ Category
|Don’t divorce your contractor!
Thursday, March 4th, 2010
Firing a c
ontractor in the middle of a project is like getting a divorce: it’s ugly, and it’s expensive. Dishonest contractors know something you might not: once work commences, your project is no longer desirable for any other contractor. If you’ve been talking to contractors, just ask them how they would feel about taking over a contract that was stopped in the middle of work from which the previous contractor was fired. You might be surprised to hear—EVEN IN THIS ECONOMY—what the answers are. Add to it that most likely if you fire a contractor that you will not feel like paying them as much as they feel is owed to them at that point, so they will likely slap you with a mechanic’s lien and law suit, and you’ll want whoever takes over the project to help your counter-suit by acting as an expert witness for you. You’re now asking for them to volunteer to be embroiled in a law suit. Thanks, can I get a side of kick-in-the-teeth with that? (more…)
Tags: Construction, Contractors, contracts, homebuilding, law suits, negotiating, residential, termination
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Time, Tide, and Loyal Clients
Thursday, February 25th, 2010
There is a saying, (well, it’s more than a “saying” but anyway…) that every Plebe learns at the U.S. Naval Academy, and it goes, “Time, Tide, and Formation wait for no one….” It’s something that I learned when I was a Plebe, and it has stuck with me throughout my professional life. Time and tide (or weather) wait for no one; that is self-evident. Similarly, clients, if they are to be loyal clients, will not wait for slow contractors. When forced to wait, loyal clients become angry clients. Here is some general advice on how to approach the important question of time with a contractor. (more…)
Tags: bid, builders, building, Construction, Contractors, contracts, estimate, homebuilding, negotiating, remodeling, residential, scope, time
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Avoid Change Orders
Tuesday, February 16th, 2010
Most contractors can have a reasonable idea of what a typical customer expects, so why do they spec it lower and give you an unreasonably low price? Two words: Change Order. Change orders, while a perfectly legitimate instrument of contract modification, are the dishonest contractors’ tool to bring his profitability up and turn a loss for him into a gain. I think back to a contractor some friends of mine had used to put an addition onto their home, and how they were shocked when, after the rough-in phase (so, bear studs, wiring, heating ducts, and plumbing, no insulation or drywall), the contractor said, “I’m done.” Steve (name changed) was beside himself because the work was not done to his expectations, but sure enough, there wasn’t a clearly defined set of specs stipulating where the project ended. The contractor knew that, so he played him. You can imagine what Steve’s bargaining power was with that contractor when they sat down to discuss that change order and heard the pricey new cost involved… pretty dirty trick. Why the change order tactic works for the dishonest contractor is because there is a legitimate additional cost associated with changing things mid-stream compared to doing it differently from the start. Changes require re-work, ordering new material, slowing down other phases, bringing in different workers, or having to re-do any of the previous work, which translates into legitimate higher costs to the contractor, so you can’t simply use the change order practice or relative steepness in price as a means of spotting a dishonest contractor. The fact is, change orders are expensive, so avoid them by planning and choosing well before work begins. And have the discipline not to change things once work is underway. If you have done enough planning and specified the job right, any changes you make mid-stream should not result in a significant enough gain for your project. Be confident! Guard against buyer’s remorse and stick to your original plan.
Tags: bid, Contractors, estimate, negotiating, price, scope, specs, undercut
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Buyer, Beware!
Friday, September 18th, 2009
Why do some contractors bid work under their cost? What dishonest contractors aren’t telling you is sometimes more important than what they ARE telling you. It’s a negotiation, and their bid was just round one. If you don’t dig into what their bid represents and go a few more rounds, you will lose. Ask what their estimate includes exactly! How much time approximately will it take, what is the price of each component, what kind of quality of materials and labor does this involve?
When bidding out the work, the ultimate goal is to get the project done for the least amount of money in the right amount of time—for both parties. But what are we naturally inclined to do as consumers? We look at the price tag first. How many times have I heard someone tell me that some guy will do the work for $5,000 less than some other guy? To that I always say, “And?” Without a specific Scope of Work, (a.k.a. “Specs”), the comparison between two bids is almost meaningless.
Time and time again I’ve heard contractors say that they undercut other bids to get the work. This occurs often at or under the project’s cost. In other words, they know that they can’t do a good job AND make money on the project unless something changes! I used to ask myself why those contractors did that, and how they could possibly stay afloat. Being a straight-shooter, I had a hard time understanding their reasoning, but over time I’ve come to figure it out. There are a few factors that play in favor of a dishonest contractor that make this practice work for them:
• Unlike honest contractors, dishonest contractors aren’t interested in doing the best job they can in the first place, so the lost profit in pricing a job at-or-below the cost for an honest contractor doesn’t really affect them, because they will use cheaper materials, less skilled workers, and band-aid solutions instead of good craftsmanship. When it comes to bidding, the more important part of a bid is the less clear aspect: the Scope of Work.
• Dishonest contractors count on you to notice sometime after work begins that you want them to do something different, so they know you will have to sign a Change Order.
• If you are solely price-motivated, dishonest contractors know you won’t think to ask about time. They might use your project as a “get around to it” time-filler which allows them to keep their workers and subcontractors busy instead of sending them home for the week. That means unless the contract includes a Project Deadline, you really don’t know when it will get done, and your contractor will not be in any hurry to get it done quickly. What’s worse, they will feel justified because you wanted it done on-the-cheap. Should they be worried that their lack of speed might cause you to fire them or take them to court? No, because of the next secret they know that you might not:
• Once work begins, the tables have turned. If you decide to switch contractors, your project will become a Tainted Project. Dishonest contractors know that there is very little you can do to help yourself once they begin work, no matter how long it takes or how poor a job they do. You will undoubtedly cost yourself more money, time, and stress if you decide to fire or sue them, so dishonest contractors aren’t afraid of law suits or of being fired.
Matt Morse
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Tags: bid, Contractors, estimate, low, price, subcontractor, undercut
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